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.

  • Charles Dunstone

    Charles Dunstone at LSE Entrepreneurs Group

    On February 27, 2006 Charles Dunstone founder and CEO of Carphone Warehouse spoke at the London School of Economics Entrepreneurs Group.We posted Charles Dunstone’s main speech here straight after the meeting, but didn’t have time to type up some of the interesting responses that came out of the Q&A session afterwards. Commentary by Charles Dunstone is in italics.

    On funding…

    Funding Carphone Warehouse was partly luck because of being in an amazingly fast-growing marketplace. Probably the most amazing part of it was that I put my 6,000 GBP of savings into the business; from 1989 to 2000 there was never any other investment in the company and we never borrowed any money.

    We just used our working capital and what became part of our DNA was ‘make sure you’ve sold before you’ve got to pay for it’ and we funded the whole business from our suppliers. Erm, I’ve no shame about that at all their money is the cheapest and least questioning money you’ll ever get. So, the great thing is to get supplier funding in whatever you do, they’re much less likely to throw you to the wolves like the banks or a venture capital company or someone are. And I guess the second part of that is, however tempting it is at the time, equity is priceless. I see lots of people who are trying to raise a bit of money and they feel like they’re giving away the equity to raise the money. They’ll rue that when the business is successful and is worth a lot of money. Do everything you can not to give equity away.

    On Vodafone…

    In reality at the time, everyone says they paid an awful lot of money for Mannesman, by buying it with overinflated paper. It was a ludicrous exchange rate with over-inflated share prices and I think that thing that people should be ever respectful of what Chris Gent managed to achieve was a very, very simple rule if you look at every transaction that he made: he bought for paper and sold for cash.He never exposed, if he was over paying for a business it was because the stock market was too high, he was just as high as the business that he was acquiring in the long term he made sure that he got cash in the bank. That is why when we come to 2001 or so Vodafone was the only telco that didn’t have massive amounts of debt; BT had to demerge Cellnet or O2 as it is now, France Telecom and Deutsche Telekom had to sell assets they had run up enormous debt.

    On maintaining a strong internal culture…

    Passion is difficult and I kind of refer to the point that I didn’t, wasn’t really sure how we created the culture. Part of it was my personal involvement. I think that a lot of it is consistent leadership. Leadership may not get everything right, but the bigger the organisation the greater the need for a sense of consistency, a sense of orientation and the values of that organisation.

    And if I look at the people that supply us, its very interesting to see how their fortunes have changed. Originally you had Vodafone with very consistent leadership under Jerry Went and then Chris Gent, then you had Orange with very consistent leadership under Hans Snook at the same time you had One-2-One and Cellnet had different CEOs every two years business all over the place: absolute chaos.

    Then you get a change: Orange gets sold, France Telecom changes the leadership of Orange constantly: Orange becomes a complete mess. O2 gets consistent leadership, O2 becomes a successful business: sold to Telefonica for enormous sums of money and through all of this I don’t think that you can underestimate the value of having really consistent leadership. This has an impact on passion and people.

    On VoIP (voice over Internet Protocol)…

    I think that the difference between Europe (particularly the UK) and the US is that VoIP will be very big in businesses, in residential homes you can’t have broadband without having an exchange line: that’s the way the regulator has decided it wanted to make sure that BT can make a living. If you’ve got broadband, if if you don’t want it, if you pick your phone up you’re going to get a dial tone that you can make a phone call from. Once you’ve got broadband unbundling, once you’ve got a connection from the exchange to the home it doesn’t cost you anything to connect a call whether its over broadband or you pick the normal phone up.

    So suddenly a normal phone has the exact same economics as Skype, so I think what will happen, what you will see people like us do is offer VoIP-priced services on your normal phone at home without you having to put a headset in your PC or mess around and do all that kind of stuff. There are some people who will find reasons to do it and things that they want to do within it. The majority of people with a fixed-line are people with a family, over 30 years old, 50 per cent of it is there home alarm and ring people, 50 per cent of it is that they want to be able to ring the fire brigade if the house catches fire in the middle of the night. You won’t get them to use their mobile or use VoIP as they want to sit by their bed, get a dial tone and dial 999.

    So I think in residential its not going to have a massive impact, in businesses its a different thing, with VoIP you can have multiple lines over one exchange line and that’s going to completely revolutionise business telephony.

    Vonage is already more expensive than we are for your phone service and we’re not even using an unbundled broadband line on it. The economic difference is very different here than it is in the US.

    On where mobile phones are going…

    I don’t have a clue where things will be in ten years. A few predictions on mobile phones, it is a unique device because the last 15 years have changed the world, more than it had changed for 500 years before that. 15 years ago, no one left their home without their money and their keys, now no one leaves home without their keys money and mobile phone and its taken a part in peoples lives that no other product has for hundreds and hundreds of years.

    That relationship is so powerful that if a producer wants to gets content to you, they can guarantee if if they can get it to a mobile phone, so that’s why we see cameras, now everyone carries a camera and a mobile phone. Soon everyone will be an iPod and a camera and they’ll keep getting better and better. By next Christmas you’ll be able to buy cameras with flashes, zoom all this kind of stuff. I think that video is going on mobile phones, I think that payment is coming, payment systems is coming onto them and Carphone Warehouse is the largest retailer of digital cameras in the UK by accident. We didn’t mean to sell one of them, they just come in the products that we sell as standard and its just that everyone else’s business is morphing into ours because of the unique relationship the product has.

    My final prediction on phones on the next year to two is that fashion is about to become a big thing in phones, at the moment they are driven by technology. We had an extraordinary experience this Christmas with a pink(Motorola RAZR) V3 we brought out. We’ve done some analysis that absolutely blew us a way, you’re starting to see the manufacturers talk to the big brands about putting things into phones and people spend stupid money on pens and watches and shoes and clothes. I think that all that madness is also going to end up in mobile phones as its such a public personal accessory.

    On the competiton…

    I’ve basically got two types of competition: people like Phones4U and The Link who are trying to do what we do and we just get up early and try and do it better and try and beat them up every day. And we have a team, we meet at 8 am every single morning and look at everybody else’s prices and reprice based on what happened that day its that brutal. We fight, fight, fight.

    My other competition is the network stores which is a combination of wanting to have some direct impact with customers and a certain amount of vanity about wanting their brand on the hight street. They don’t compete with us in terms of the volumes of sales that they do, as the market gets more fragmented I think that its less likely that the customer is going to say I just want to go and see the world according to Orange today, rather than even going to one of my normal competitors. In reality it will be let me go and compare Orange with everybody. I think that its going to change but there’s not a very strong economic rationale for them in the first place.

    On handsets…

    The networks are kind of frightened by handsets, as its the handsets that drive churn in the marketplace, the networks would like to just to have a dozen hand handsets across the world. We know when we talk to customers that handsets are the only reason that they’ve come in the first place. People love handsets, they hate networks; so they want to see the widest possible range of handsets available.

    On the role of technology in solving world poverty…

    I have no idea, but I have my doubts and I don’t stand here saying that the mobile phone is a fantastic thing that has improved the world, you can easily argue that actually the mobile phone and Blackberry and these kind of devices are doing are polarising the world and are allowing certain people to have even more power and faster decision making and disenfranscishing a huge proportion of the population. So I am no defendant of the mobile phone, people want to buy them, they feel that they can’t live without them; then its my job to help them with that.

    The developing world has made the leap absolutely and it may well be that they never feel the need to go and dig the street, dig the roads up and put copper in. However, I am skeptical as to the mobile phone as those peoples communications needs develop will ever give them the access speeds that they will really want to run fast broadband-type services. At some stage someone is going to have to do something: maybe its four G, WiMax whatever to bring high-speed bandwidth into those areas. McNicholas aren’t going to dig the road up to put in more copper wire. We use it in countries like this because its there and why wouldn’t you? If you were rolling it out here again you probably wouldn’t do the same thing.

    On the transition of phones to computers…

    Absolutely they’re changing into computers, they start to have bugs, they start to have all kinds of usability issues. Our job is very simple and I think the worst thing that could have happened for me is that there could have been one mobile phone network and one really simple phone and the people understand it so that they did not need anyone to help them set it up and work out which one to buy. So we absolutely love complex markets as this gives us something to offer and something to do we have to keep changing. I just watch in delight as Microsoft come into the marketplace because that’s not going to work is it? Its going to have lots of bugs and crash and do all these sorts of things that needs tons of support. Lots of competing systems Symbian and others, so its another level of complexity alongside all the complexity of the operators, all the complexity of the tarrifs – Bring it on.

    On suppliers...

    We have a guy at one of our suppliers who we’ve named Del Amitri from that song ‘nothing happens, nothing ever happens at all’.

    About Charles Dunstone

    Charles Dunstone is the founder of Carphone Warehouse. Dunstone had been working at NEC as a sales man after dropping out of university. NEC was an early cellphone manufacturer and saw the opportunity. Charles Dunstone and two partners started the business out of Dunstone’s flat on Marylebone Road in 1989. This was back when mobile phone contracts were sold by companies over the phone and by fax. The average tabloid newspaper back then would have had a good readership from self employed tradesmen, and the pages between sports and TV were covered in adverts for companies like his. As Carphone Warehouse grew, Charles Dunstone expanded its retail footprint to most high streets.

    Over time Charles Dunstone branched out into consumer electronics sales with Best Buy. Eventually, Charles Dunstone merged Carphone Warehouse with the Dixons Group. More business related content here.

  • Palm for sale

    The Good Morning Silicon Valley newsletter carried a story about Palm’s largest shareholders asking the company to sell out to another player while its fortunes are still on the rise. This raises concerns about Palm’s roadmap and vision if even their largest shareholders don’t believe them.

    Why sell out?

    Palm has a number of challenges to overcome:

    • Maintaining relationships with distribution channels which are different and distinct for both the Treo and PDA ranges
    • Palm needs a new OS that will have it ready for the next ten years. It could have done with that new OS in the year 2000
    • Innovation and localisation: in order to keep its head above water in the PDA market Palm needs to innovate, Pocket PC manufacturers can leverage reference designs and even sell devices at a loss to support service businesses in the enterprise. In the cell phone market, Palm needs to localise the device to meet each carriers needs.
    • Make like Dell: Palm not only needs to get better at innovation and localisation, it needs to innovate operationally; something that had a positive transformative effect on Apple. Dell is a by-word for a slick logistics chain that keeps cost down and allows for user customisation at the order stage
    • One-trick pony: when HP goes into business it is looking to sell everything from a HP9000 Superdome high-end computer to an iPaq and the services to support it. When Nokia speaks to carriers it can sell them everything from all the kit to run a network to budget phones for PAYG (Pay-As-You-Go) customers
    • Convergence: cell phones now have PDA functionality and so do iPods, Palm has unsuccessfully tried to make a convergence play with the LifeDrive and seems to have a crisis of ideas
    • Get big or get out: As can be seen from the MP3 player market, where there is a hot, competitive sector size wins because it can bring economies of scale to bear. Palm could not have taken the gamble that Apple did in terms its forward contracts for flash memory to role out a flash-based LifeDrive even if it had the vision to do so.

    Who should buy?

    A lot of the heat in this discussion centres on Research In Motion, Nokia and Apple.

    Research in Motion has never had the best product design and user experience, Palm could help them.

    Palm’s pen computing experience could be invaluable to Nokia.

    Apple is the collectively the player considered by technology pundits the people who can make a market work and has the expertise and chutzpah to make change the game devices work. Palm could bring carrier relationships and expertise.

    Why buy?

    Palm has a strong brand its name has been a by-word for PDAs for a long time. The Treo has made a name for itself amongst early adopters and has proven itself to be more adaptable than the Blackberry. Its product design has made it a success that has saved Palm up to now. However, much of the crown jewels within Palm (its distinctive look and feel) marched off with PalmSource acquisition by Access and even then there was a lot of work to be done to assure the future of the PalmOS as a modern platform.

    • If Apple wanted to build a Palm-like device it already has much of the expertise needed, arguably the best product design team in the world and it could license or buy the PalmOS software from Access. It even has the talent to build its own OS over Darwin. However, this would necessitate a hell of a lot of work during the time that the company is migrating its hardware and software to the Intel platform and rolling out new entertainment services. This means that a Palm-like Apple device is probably not likely
    • Research in Motion could poach a few of the Palm design team and licence the PalmOS software, but it has bigger issues as competitors are using the NTP case as an excuse to eat the companies lunch. In addition, services and software are more lucrative so there is already some industry signs that RIM are looking to move away from being a hardware player
    • Nokia has some of the best mobile phone designers in the world, the user experience of its Symbian phones rivals Palm. It makes sense only as a way to eliminate competition, but it would be more profitable to tempt key staff away and watch Palm nose-dive into wherever dead companies go

    Conclusion

    OK, first of all there is the question of whether Palm needs to be sold: probably not, but a shot of energy, vision and cajones in the management team wouldn’t go a miss and this shareholder action may be the boot in the backside that they need. Bottom line is that this question can get kicked back and forth for a long time to come, what’s more its an emotive area so don’t expect a consensus soon.

    If a ‘for sale’ sign went up, Palm may get a buyer, but I would expect the purchaser to come from the Far East rather than the established tech players named. I would also expect them to buy if or when the company is on its knees. Ningbo Bird, Haier, Lenovo, BenQ or HTC for example already know how to make phones, if they want cute industrial design they can buy it in as necessary from IDEO, frog design or their ilk. If the company did tout around for a buyer, you could expect the business to drop as carriers and enterprise look for alternative ‘safer’ suppliers. If the business isn’t on its knees when the for sale sign goes up, it may be by the time the deal is signed.

    The crown jewels: the PalmOS software is already available to whoever wants to licence it at a discount to Windows Mobile, the value would be in the carrier relationships and the brand recognition of the Palm name.

    UPDATE: Palm Addicts ran this piece in full, you can find it here. More related posts here.

  • Day pass media model

    I first came across the day pass concept with Salon.com, its an interesting compromise between subscription content and ‘free content’. First of all, with the possible exception of consumer homepages there’s little free content on the web. Content that you don’t have to pay for has advertisements around the sides of the pages and in the text, these are often paid for on a ‘per click’ basis.

    Self described ‘premium’ publications like the Financial Times and The Wall Street Journal go for a walled-garden approach where you have a paid for subscription and they vend the content out.

    I consider this to be going after short-term gains and sacrificing their future.

    The day pass says my content is valuable; however if you engage with my sponsor, they will pay for your access to my content over the next 24-hours. It means I have a moral contract with them to listen to their sponsor (and actually Aviva the insurance company did a smart bit of work by tailoring their content to deliver their message to an Economist reader whilst at the same time getting over their positioning as a progressive innovative company), I understand the ‘real value’ of the content that I get to look at AND the publisher remains relevant to a modern net audience rather than trapped in the dead forest business.

    As Oscar Wilde said it is better to be talked about than not be talked about; in the online world, getting talked about means that you have to be accessible. Bloggers will tend not to blog about sites were people cannot go and see the content in context, for instance I have reduced the number of links I have to New York Times stories because of their part-way subscription model.

    During my day pass tour of the Economist, I came across a series of trend articles and a number of interesting podcasts for download touching on some of the editorial teams hot topics for 2005: economic change

    More related content here.

  • Boxman online retail

    Boxman


    My first transaction online was registering and paying for a piece of shareware software at Kagi.com for my Mac whilst I was still in college. I can’t remember what it did now, but I remember that the author was a student at a Scottish university. The first physical item was bought from Boxman a few years later.

    e-dancer

    The first thing I purchased online in what most people would understand as e-commerce was a Kevin ‘Reese Saunderson CD under the name e-dancer from Boxman.com. I can remember why I loved Boxman.I had read about them in an article in the Sunday Times, it was a way of getting CDs from all over Europe in one place, Boxman would buy at the lowest price, consolidate their stock in one warehouse in Holland and pass on much of the savings to the consumer.

    (CDWOW have a similar approach and have incurred the wraith of the record industry who like to have keep up market barriers to maximise profit margins.)I picked up an import copy of the Troubleman soundtrack by Marvin Gaye, when I couldn’t get a UK copy on back order from HMV. The mix of choice and price the e-commerce killer application for me.

    Unfortunately Boxman.com unraveled for a number of reasons. Usability experts put it down the search function on the site being the only way for finding what you were looking for (although I had no trouble). Tony Salter, one of the directors in the business laid the fault at the foot of the software which controlled the supply chain of the site. In order to fulfill on its promise, Boxman needed to:

    • Track wholesale prices and cost of delivery across Europe, including comparison pricing for the same product with different national catalogue numbers
    • Organise shipping in the most effective and efficient manner
    • Track customer orders and trends
    • Calculate the most effective and efficient ways to ship goods

    This was on top of the complex website functions visible to the consumer. The system would be much more complex than your typical JD Edwards ERP set-up, so Boxman got some of the brightest names in IT to help out: IBM. The project seems to have been a learning experience for IBM as the software failed to deliver on its promise. Anyway, Slate.com have a timely reminder on the importance of logistics management, before we all get lost in reverie around web services revolutionising the online world. More related content here. 

  • Chinese eyes on Korea

    From romantic Korean drams to hard boiled films like Old Boy and Silmido are making waves amongst arthouse cinema fans and movie industry talent-spotters throughout the western world. It now seems that its not only Hollywood that is turning its eyes eastwards to follow the latest cultural carrying-ons in Korea, but Chinese eyes are too.

    The New York Times China’s Youth Look to Seoul for Inspiration by Norimitsu Onishi (January 2, 2006) has an interesting article on how young Chinese eyes Korea as tastemakers in fashion, beauty and  popular culture.

    The country’s cultural exports are cutting-edge tempered with the Confucian-based culture familiar to Chinese audiences. American culture is too ‘post-modern’ to be absorbed directly. At least some of the time, China sees Japan in a way reminiscent of Basil Fawlty and  is still beyond the pale because of the War. Although the Chinese consistent appetite for Japanese AV content is well documented elsewhere. Taste making goes beyond pop singers and movies to hip brands such the must-have mobile phone from Samsung and Hyundai cars.

    Rather like Eric Clapton adapting the blues for white audiences in the UK; so Korea is adapting western idioms from hip-hop culture and sit-coms like Sex in the City. It is then making them palatable for East Asian audiences. Free trade and intellectual property protection is likely to not be as beneficial to Hollywood in tapping the Chinese market as the media moguls had hoped. More Korea related posts here.