• Robocalls...that could be from your high school friend...

    CNN piece on increased robocalls

    "Spoofing" is a new twist on robocalls. The telemarketing call is routed so that it looks as though it originates from the town in which you grew up. So, instead of ignoring it, you might answer it, hoping that it is an old friend. Because robocalls are internet-based, and the calling is mechanized, the calls are cheap. Moreover, hundreds of calls can be placed at the same time. There is not really a disincentive for marketers with regard to these calls--if they get any leads resulting in sales at all. So you may be duped into answering. 

    I often call back the numbers that I have ignored...and get the classic message that the number I have dialed "has been disconnected or is no longer in service." As it turns out, this is a violation of FCC regulations, which require that a telemarketer:

    • "Transmit or display its telephone number or the telephone number on whose behalf the call is being made, and, if possible, its name or the name of the company for which it is selling products or services.
    • Display a telephone number you can call during regular business hours to ask to no longer be called. This rule applies even to companies that already have an established business relationship with you."

    The problem in this day and age is that these regulations are unlikely to be enforced. Nevertheless, one can file a complaint with the FCC. 

    Source: "Episode 789: Robocall Invasion," by Sally Helm and Kenny Malone, NPR: Planet Money, August 18, 2017.

    Follow up:

    • What are three reasons for increased robocalls?
    • What is your personal experience with robocalls on your landline and on your mobile phone? How has this changed over the last 2 or 3 years?
    • If you are the recipient of unwanted robocalls, file a complaint. Explain how you have been affected.
    • How does cost/benefit play into this type of marketing? How have robocalls and telemarketing overlapped?


  • Hurricane Harvey, the economy, and the broad impact of this disaster

     Brian Brenberg, of King's College on Fox News; other views below

    The historically unprecedented rainfall and storm damage of Hurricane Harvey has had massive human and economic costs. Some of the impacts include:

    • exacerbation of construction labor shortages in Texas caused by disappearing immigrant labor, in the face of an increased need
    • $190 billion in estimated damage, which cannot yet be fully assessed
    • energy supply shortages, since about 1/3 of domestic oil production is centered around Houston; this is already resulting in increased gas prices, though 4 million barrel/day production are expected to be back by the end of September
    • loss of functionality in a major U.S. port, having an economic effect across Texas and the South
    • the number of people affected, since Houston is the 4th most populous city in the U.S.
    • extended timeline for repair of infrastructure

    One new response to this disaster--supplementing the FEMA, Red Cross, and other established non-profit aid--has been crowdfunding. Individuals have set up GoFundMe and other accounts to benefit specific disaster victims 

    Source: "How Crowdfunding is Changing Disaster Relief," by Sabri Ben-Achour and David Brancaccio, with input from Diane Swonk and Amy Scott,  Marketplace American Public Media, August 31, 2017.

    Follow up

    • What are the pros and cons of crowdfunding as a response to disaster? 
    • Discuss businesses' possible attitudes toward government aid after a natural disaster. What are the pros and cons? 
    • Do some research. How is the Harvey infrastructure situation in Houston different from Katrina in New Orleans? 
  • Management templates: Agile, Scrum, Gantt, Kanban...

     scrum vs kanban

    Management systems seem to have a life cycle. This is not surprising, since they are a product--especially if they utilize software or hardware. In any event, a person seeking a middle-management-track position would benefit from being aware of systems currently in vogue, and the ones they are replacing. 

    Here is a short list of systems with a brief description of each:

    • Gantt charts: "A Gantt chart is a type of bar chart, devised by Henry Gantt in the 1910s, that illustrates a project schedule. Gantt charts illustrate the start and finish dates of the terminal elements and summary elements of a project."
    • Scrum: "Scrum is a framework for managing software development. Scrum is designed for teams of three to nine developers who break their work into one-week to maximum four-week cycles, called 'sprints'.check progress daily in 15-minute stand-up meetings, and deliver workable software at the end of every sprint."
    • Agile teams: This term can apply to any management system that composed of "a cross-functional group of people that have everything, and everyone, necessary to produce a working, tested increment of product. These people are dedicated to the team, and as a rule, do not move between or across teams as demand ebbs and flows."
    • Waterfall management systems: In contrast to an agile team system, waterfall management is a top-down system where decisions flow in one direction "through the phases of conception, initiation, analysis, design, construction, testing, production/implementation, and maintenance.
    • Kanban: This is primarily an "inventory-control system to control the supply chain. Taiichi Ohno, an industrial engineer at Toyota, developed kanban to improve manufacturing efficiency," and it is on way to achieve Just In Time Inventory control (JIT).

    Software development is a good project to apply any management system to, as it:

    • is long-term,
    • requires a co-ordinated team effort,
    • is expensive,
    • relies on clear communication between the client and the developer, which is difficult when one is dealing with a product that does not yet exist.


    Follow up:

    • Imagine you are applying to five different publicly traded companies. Find out what management strategies they have formally adopted. Prepare some examples that can show how one system is different from another, as though you were being asked in an interview.
    • Which management systems suits your personality best? Explain why.

  • Entrepreneurism, Opportunism, the American Spirit, and the Eclipse

    Above: Ace Hardware sells Eclipse glasses. Photo by Doug Strickland/Chattanooga Times Free Press, via Associated Press and the linked source article

    The positive side of the American spirit came alive during the eclipse. Entrepreneurs sold products to protect enthusiastic viewers. Printers were busy with clever and non-so clever eclipse memorabilia. New entities were formed to take advantage of the phenomenon. Some were sole proprietorship operations devoted only to this project. Others were established businesses. Many were non-profits. Scientists, both amateur and professional, rented, purchased, and/or developed telescopes, lenses, sensor boards, light meters and other equipment to document eclipse phenomena.

    Intellectual property relating to the eclipse includes websites with copyrighted photos and videos, as well as information both prior to the eclipse and aggregating information after the eclipse. Many (like Wikipedia) ask for donations, which may or may not be tax-deductible, depending on the form of business organization the information provider has set up beforehand. Here are some sites to explore:

    Here are some eclipse highlights in case you missed it, courtesy of Tech Insider:

    By the way, huge traffic tie-ups DID materialize within a few hours after the eclipse, along the state and interstate highways leading away from the eclipse centerline. It seems that, while viewers arrived on various days at various times, when the event was over, most people wanted to leave at the same time. I took a detour to the only U.S. Post Office in Idaho Falls that had a special eclipse hand-cancellation stamp (I'd already bought my eclipse Forever Stamps). At the Post Office, there was a different kind of line-up--quite festive--to get souvenir mail hand-stamped FOR FREE. 

    Scientists and non-profit institutions will be working on eclipse data for many weeks and months to come. Many who were gathering data (scientific and entrepreneurial) have learned what they would do differently next time. Most of us who experienced the eclipse first hand are still recovering from the surreal, humbling and wondrous quality of the event. And, of course, we are making plans for April 2024, when the next major viewing opportunity occurs in the continental U.S. 

    Source: "Can't Eclipse the American Spirit," by Frank Bruni, New York Times, August 16, 2017.

    Follow up

    • Check out several of the sites above. Share and discuss the business aspects with your colleagues. What are four lessons entrepreneurs can learn from the eclipse?
    • What is happening to the price of eclipse glasses?  Craigslist  Lifehacker Research and make a graph.
    • Make plans for the 2024 eclipse. Where might you like to view it? Would you consider taking advantage of any business opportunities?

  • The Eclipse is Coming! Small town U.S.A. edition

    from CBS News, 2 months before the eclipse

    Makanda, Illinois is a town of less that 600 people. But because it is located where the total eclipse will be visible for the longest period of time, it is a destination for many who want to view the total eclipse on August 21, 2017. Across the United States, many small towns are expecting crowds they almost never experience--which creates business opportunities for many. Hotel and motel rooms at all levels are fully booked. New hosts are offering Airbnb bookings for the first time. Restaurants and retail stores that usually close Sunday and/or Monday are opening for business. Every type of customizable trinket, T-shirt and mug has been manufactured and offered for sale. 

    Full disclosure: I am viewing the eclipse close to the centerline, near Rexburg, Idaho. Our group is doing astrophotography and some science experiments, but the rural family who is hosting the space for viewing has contributed to the Business of the Eclipse by customizing T-shirts and mugs.  We booked middle-range motel rooms more than two years ago (@$134/ night) but as of today the only available room for miles (at the very edge of the totality area) is asking $750 for a room that usually rents for $49. 

    Nevertheless, the anticipated Carmageddon has not materialized, and the weather might not co-operate. Stay tuned for a full report locally, nationally and financially.  

    Source: "This tiny town is the best place to catch the solar eclipse," by Aidan Kelly, AOL News, June 21, 2017. 

    Follow up

    • Why would a town NOT want this business? How might a town like Makanda prepare for 2024? How might an entrepreneur take advantage of the next eclipse?
    • Business meets science: Who will see the eclipse first? How will it move across the U.S.? Where in the U.S. might the best marketing opportunities exist, based on when totality will hit? How much money per minute-of-totality is being spent on the eclipse?  

  • Warning: those partial-eclipse glasses might be fakes!

     from CBS News, Los Angeles

    Amazon did not require vendors selling eye protection for viewing the partial solar eclipse to prove they were selling "certified" wares prior to posting on the retail site. But it turns out SOME of the glasses sold were fakes. In order to avoid lawsuits and the harm that may be caused by inadequate eye protection when viewing the eclipse, Amazon issued a broad warning and recall. This has been very confusing to consumers.  The American Astronomical Society recommends that only glasses made  by reputable vendors be used.  Those glasses carry the international safety standard number “ISO 12312-2”....but of course anyone can print that on their product. Real eclipse glasses block 100,000 times more light than regular sunglasses. Looking at the sun directly can cause eye damage and blindness.

    I have looked at an overhead light  through some of these fake eclipse glasses, and was able to see the shape of the bulb. This means these glasses are definitely fake!  Even welder's glasses aren't all good enough. Number 14 or 15 welder's glasses should be OK. When looking at the sun, it is important to stay safe. 

    Source: "Amazon recalls potentially hazardous solar eclipse glasses," by Nissan Akpan, PBS NewsHour, August 14, 2017.

    Follow up

    • If you have purchased solar eclipse glasses, be sure to check to make sure they are certified. The manufacturer Rainbow Symphony is trustable and their glasses are widely available. Check the reputable vendors link above as well. 
    • What are the plusses and minuses of not pre-vetting retailers, but letting the after-the-fact review process handle bad products? Should the policy differ from product to product? Explain.
    • If you are in the "Path of Totality" for the 2 minutes plus or minus that the sun is in COMPLETE totality, a viewer can look in the sun's direction without eye damage, because the sun cannot be seen. Read up on the procedures if you are unclear of how to proceed (The AAS link above)


  • Cows and controversy on Kauai

     Hawaii Dairy Farm proposal near Poipu, Kauai 

    Those of us who buy milk in the continental U.S. have the experience of checking dates on milk cartons, and knowing that fresh dairy products are stocked multiple times a day in many supermarkets. But dairy products (as well as 90% of all of its food products) have to be imported to Hawaii, which has become a favorite getaway spot for Silicon Valley entrepreneurs. And one tech billionaire, Pierre Omidyar of eBay, wants to make a difference. He wants to build and operate a 699-cow, sustainably-pastured, dairy farm in the Maha’ulepu Valley on Kauai. I imagine that this would be similar to the beautiful dairies on the peninsula at Point Reyes, California.

    But local businesspeople are mostly opposed to the idea. The farm would be about a mile away from Poipu Beach on Kauai's south coast. And with each cow producing 90.8 pounds of manure per day, an impact on air quality and ground water are definitely possible. But the proposed dairy claims that there would be little or no impact, partly due to the planting of special grasses to "filter" the manure. 

    The president of the group Friends of Maha'ulepu claims that the dairy "would be a serious threat to Kauai’s biggest source of revenue, tourism, to the environment and to our quality of life." A judge has required Hawaii Dairy Farms to do an environmental assessment before proceeding with plans. 

    Meanwhile, some residents are driving around with bumper stickers that say "No Moo Poo in Maha’ulepu.” I wonder what effect that has on tourism...

    Source: "EBay's founder has a new idea: Build a dairy in Hawaii," by Stephanie Strom, New York Times, August 13, 2017.

    Follow up

    • Comment on the controversy. What are the pros and cons for various stakeholders? Take into account the agriculture history of the island.
    • Read up on the dairy farms in Point Reyes, California. Discuss the business history and its positive and negative (if any) impacts on the local economy. 
    • How do the Hawaii Dairy Farm's plans comply with current laws and regulations in form...but maybe not in substance? What event could tip the scales?


  • The "Eddie Murphy Rule" and commodities futures trading

     excerpt from the movie Trading Places YouTube

    How did the characters played by Eddie Murphy (Billy Ray) and Dan Ackroyd (Lewis) get rich (at the expense of The Duke Brothers and others) in the movie Trading Places? (They are getting revenge for Lewis having been unfairly treated.) Dan Ackroyd reminisces about his understanding of the financial process in this clip: 

     Bloomberg news, August 6, 2013

    As Ackroyd notes, this is a movie about commodities trading--and the commodity being traded is orange juice. In the commodities market, traders bet on what a commodity will sell for in the future--at the end of the growing season. In the film, The Duke Brothers are buying orange juice contracts at higher and higher prices, based on insider information from the USDA that the season will be terrible and there will be orange shortages.  Ackroyd and Murphy are selling these orange juice contracts "short"--that means they sell contracts for oranges that they don't own the rights to...yet.

    Elaine Schwartz, writing in Econ Life, explains the situation concisely: "The problem for the Duke Brothers is that their USDA report was a fake. Created by Eddie Murphy and Dan Aykroyd, the fake report contains bad news about the crop. Expecting orange shortages, the Dukes and traders who copy them propel prices skyward. At a high of $1.42, Murphy and Aykroyd start selling contracts. When the real report is released, prices plunge, and at 29 cents they buy."

    This means that Murphy and Ackroyd can buy the real contracts at 29 cents, then turn around and immediately sell them for the price the Duke Brothers promised to pay, $1.42, making a profit of $1.13 per contract. 

    The Eddie Murphy rule, by the way, is in Section 786 of the Dodd-Frank Act. It makes trading on insider information in the commodities market illegal for the first time. Even though insider trading in stock transactions has been forbidden since 1934, it was not illegal to use insider information in the commodities market until 2010, when Dodd-Frank was signed into law. 

    Source: "Episode 471: The Eddie Murphy Rule," by Robert Smith and Roman Mars, NPR: Planet Money, originally aired ; updated August 2, 2017. 

    Follow up

    • What is the bet that an investor is making in a normal, straight-ahead stock purchase?  How does that differ from commodities trading?
    • How is commodities trading done today, in 2017?  How does it differ from what is pictured in the film? What are the positives and negatives of the way commodities trading is done today?

  • Globalization winners and losers

    image from LinkedIn SlideShare, Matt Bentley

    One of the axioms of capitalism (just like in Vegas) is that when there are winners, there are going to be losers. Even globalization--which appeared to be a welcome expansion to new markets, allowing for continued growth--has had some unforeseen consequences. It seemed like a good idea twenty years ago, when Scott Tong and his buddies were going to Georgetown. Here are Scott (in the center, peeking out from the second row) and his classmates: 

     image from the article linked below

    Scott and his friends discussed how everyone thought that the dawn of globalization would mean big opportunities for all.  From President George H. W. Bush : "A new world order can emerge. A new era. An era in which the nations of the world can prosper and live in harmony." And, from another sector, columnist Thomas L. Friedman (NYT 12/08/1996) theorized that "globalization was so powerful that no two countries with McDonald's would ever go to war." 

    But the manufacturing sector in the United States has suffered, and workers in those sectors have felt the most economic pain. Georgetown Professor Jennifer Tobin said, "By focusing on the winners from trade and ignoring the losers, I think we created the situation we’re in today.

    Although the idea arose that globalization was not necessarily good--nor was it necessarily here to stay--no one was really prepared to predict where we will go from here.  

    Source: "What went wrong with globalization?" by Scott Tong, Marketplace: American Public Media, August 7, 2017.

    Follow up

    • What did Scott's friend Michael Panzera get teased about...but what turned out to be a good idea, business-wise? What do you wish you (or your parents or older siblings) had studied, knowing what you know now?
    • Do you think that anything "needs to be done" about the unequal effects of globalization on different segments of American workers? What do you see happening in the long run?
    • What, if anything, is wrong with that picture of from Georgetown, class of 1991?


  • Making an affordable sneaker: The Starbury

     Starbury Shoes story by Complex News

    "Giving back to the community" is sometimes a goal of successful individuals who have succeeded financially even though born into poverty. Stephon Marbury is an NBA star who longed for expensive Air Jordan shoes as a kid. He decided to create quality shoes at the lowest price possible once he hit the big-time. 

    However, it was not as easy as he thought it would be. Listen to the podcast and draw your own conclusions about Marbury's project.

    Source: "Episode 785: The  Starbury," by Kenny Malone, NPR: Planet Money, July 21, 2017.

    Follow up:

    • What were the challenges Marbury faced, and continues to face? What has he done to overcome those challenges?
    • Discuss the relationship between price and perceived value. 
    • What marketing techniques can be employed to help ethical motivations succeed in a economic space where profit motives are the norm? 

  • Accounting trick makes PayPal financial statements look good

    PwC tries to justify using non-GAAP acct'g measures YouTube

    PayPal's second-quarter earnings "beat the numbers": its revenues of $3.14 billion were higher than analysts predicted "Beating the numbers" is helpful in maintaining or increases the corporate stock price. 

    But PayPal used a non-GAAP way of recording the stock portion of employee compensation. According to the FASB rules regarding Generally Accepted Accounting Principles (GAAP), stock compensation is an employee expense.  Expenses decrease net income. PayPal is required to report the lesser amount...but it opts to also report--and highlight--the earnings report that does not include the stock-based compensation expense. 

    Not all tech companies do this, which makes earnings results harder to compare. For example, from the NYT

    "Dave Wehner, Facebook’s chief financial officer, told investors on a May conference call that the company would report results that include share-based compensation because it’s a true cost of running the business.

    Ruth Porat, chief financial officer of Alphabet, which is Google’s parent company, said the same thing on a conference call in January."

    Source: "The Accounting Tack That Makes PayPal's Numbers Look So Good," by Gretchen Morgenson, New York Times, August 4, 2017.

    Follow up:

    • What is the downside over the long term that would create the opposite effect on PayPal's financials? Is a reversal likely to occur? How might this be mitigated? (Hint: compare it to LIFO inventory evaluations).
    • What does "non-GAAP" mean? How is is possible to use this method? Why is it an important factor in analysis?


  • Clean and not-so-clean energy and electric vehicles

     cartoon about the full energy cost of electric cars YouTube

    Full disclosure: I am an electric-vehicle owner with solar roof panels living in sunnier-than-normal Southern California. So I am pretty much in the booster section for alternative energy sources. NEVERTHELESS, I recognize that driving an electric vehicle is not always a net "win" for the environment. 

    A major factor in energy expenditure is the cost to mine the raw materials, then manufacture each new car. Electric batteries have rare metal components. Another factor is the source of energy for the power plants that will be charging the electric car batteries. Is there a coal power plant? Local solar panels? Other renewable sources of energy? 

    The acronym "EEV"--"Elsewhere Emissions Vehicles”--is used by Kevin Book, managing director of ClearView Energy Partners, as a more accurate term than "Electric Vehicle" (EV). "Different states have different generation mixes,” said Book. “Different local sources of power create different impacts.” This is one of many factors to consider in making sustainable vehicle decisions.

    Source: "Do electric vehicles reduce emissions when the electricity comes from coal?" by Jed Kim, Marketplace: American Public Media, August 4, 2017. 

    Follow up

    • Contact your electricity provider. What natural resource is used to power your home? How about your school or office? Does your utility bill give you a way to calculate your carbon footprint? How many gallons of gasoline do you burn per year? Add that to your total.
    • What are the other environmental impacts of electric vehicles? What is the BIGGEST contributor in to hurting the environment according to the video above?


  • Google fined by European Commission

     Bloomberg report on various EU investigations into Google  

    After a seven-year investigation, the European Commission (EC) has imposed an antitrust fine against Google (Alphabet) of 2.4 billion Euros (~$2.826 billion U.S.). The issue involved consumer searches for products to buy. The EC determined that Google had too much power over the information that was provided in those searches. In other words, Google directed consumers to advertisers and basically controlled which companies would be considered for purchases. 

    Whether Google's choices are directed by ad revenue or another reason, the EC determined that the search engine had too much power. In addition to the fine, the EC is requiring Google to change some of its business practices.

    Source: "Episode 787: Google is Big: Is That Bad?" by Jacob Goldstein and Noel King, NPR Planet Money, August 4, 2017.

    Follow up

    • If you use Google, Facebook and/or Amazon...do you ever worry about them becoming too big?  If the cost to use each of them went up by $50 a month would you seek another alternative? Why or why not? Do you think this fine is fair?
    • What is the European Commission? If there is a comparable entity controlling commerce in the United States, what is it? What action, if any, has been taken against Google in the U.S.? 


  • Banana logistics

    Dole video above of what occurs BEFORE bananas arrive in NYC

    Logistics is a major factor in management and profit. Amazon, UPS and FedEx are a consumer-end supply chain giants. But all products need to find a way to get to market. Fresh food that needs to be ripened poses particular challenges. Bananas are one example.

    Joe Palumbo, founder and manager at Top Banana, has first hand knowledge of how 20 million bananas per week are distributed in New York City, where local entrepreneurs remain a major player in this process. The steps include:

    • arrival by container ship
    • radiation detection (apparently, bananas can be slightly radioactive)
    • Customs inspection of random portions of the shipment
    • shipment to ripening warehouses
    • delivery to restaurant supplies, wholesalers and grocery stores. 

    The history of the banana business includes ruthless competition, a continuing fight against diseases that effect banana plants, and diminishing profits. Nevertheless, it remains a versatile fruit with continuing demand that is far from the areas in which bananas can be grown. Logistics management will always be part of the U.S. banana business. 

    Source: "The Secret Life of the City Banana," by Annie Correal, New York Times, August 4, 2017.

    Follow up

    • What is one of Joe Palumbo's biggest complaints about the banana business? What are some of the other problems (and dangers) in the banana business that are mentioned in the article or comments?
    • Research the links in the article to the businesses involved in the banana supply chain once it gets to the city. Comment on how the system differs from other cities in the U.S.