The Pit - IMI Trust

…actually, no.

1318 days and counting… there must have been a lot of bugs …

You are seeing the world of business revolutionise right before your eyes!

Business is not about building databases anymore, it is now about building networks or communities. It is taking what is so powerful offline and utilising the technology available to create networks online.

It is no longer about selling your customers, it is about educating them and providing them with a platform to contribute to your business.. The more you educate and inform, the more loyalty you attract. It is about involving them in the community which you are developing, and allowing them to be active within it.

Advertising platforms allow marketers to target their customers, in ways which 10 years ago… were not even thought of. The way consumers think is now in terms of ‘keywords’. Companies like Google, take an approach to advertising which I have never seen before. That is… the better you are at targeting your customer, and the better you are at relating your text to your customers desires… the cheaper your advertising rates.

For business, sites like LinkedIn have gone from strength to strength. Facebook is now evolving at an amazing rate and astonished the business world when Microsoft invested US$240 into the company for a minor stake. This investment valued the company at US$15 Billion.

Google is on the verge of cracking $700 a share, and it’s aquisition of Youtube has proved wise, with it now being the platform of expression for the new generation. Politics has seen a rapid change, with a strong focus on capturing Youtube’s audience to promote their message.

Now we are seeing Australian politicians John Howard and Kevin Rudd go toe to toe, utilising Youtube and Myspace as their platform.

Promoting your business is now more complex and strategic than ever. Those companies that don’t advance with the changes, will be left behind by the companies that adopt the Web 2.0 and Social Networking models.

How are you utilising Web 2.0 and Social Networking in the growth of your business?

It seems like each month we are hearing announcements that companies will be outsourcing support and IT functions to India.

Companies are finding that they can no longer get the depth of experience they seek in Australia. Companies are finding that they can outcomes achieved for cents in the dollar and in less time then they can in Australia.

In Australia, this has caused a lot of controversy! The interesting thing about this is, if you ask people who have dealt with Indian IT companies, more often then not they will rave about their standard of service and their responsiveness.

An Australian based company recently tendered a job to both Australian and Indian companies. The response highlighted a strong difference in the hunger to do business, and the reason why companies are using outsourced services.

By the time the company received a reply from an Australian service provider, the job had been completed in India, and they were going through a testing phase.

Many corporate organisations are outsourcing to India, whether it be there call centre or the IT departments. Globally, the largest companies on the planet are also outsourcing these departments. In the UK, the have companies which have established European shop front, and then they outsource the business to India. The companies are generally… none the wiser.

It is great to see these developing nations thrive. It is refreshing to see the professionalism in their approach to business. Their hunger to succeed and thrive will make news announcements about the outsourcing of jobs increasingly common.

The business of going green and becoming community and humanity focused has become increasingly popular amongst listed companies around the world.

Businesses have discovered it adds to their bottom line, governments have discovered they can secure votes with it and consumers are doing their bit to contribute to the planet. In fact, ethical investment funds is the fastest growing sector in Australia at the moment.

You know that it has become popular when Rupert Murdoch comes out and promotes that his company will be carbon neutral by 2012. Google are utilising alternative energy sources to power their server farms and Virgin Blue are offering heir passengers the opportunity to help them become carbon neutral.

Capital Raising is an important arm of the IMI Trust service and we are fortunate to come across some amazing companies, who’s innovation is quite astonishing.

Inventors out on their farms in the middle of nowhere, are coming through with breakthrough innovations that will go along way to contributing to the empowerment of our planet. They are quite possibly tomorrows billionaires and millionaires. Overnight success stories that are 10 years in the making and out of the spotlight.

What has been even more amazing is the amount of assistance the Federal and State Governments are providing to assist these technologies and innovations. Australia is often accuse for not ratifying Kyoto, and yet they are continuously sponsoring and investing in companies which can benefit the world. There are a multitude of programs, and people in place to advise and guide companies on the path to commercialisation.

With a strong economy, a surging stock market and business confidence high, more and more companies are raising capital or seeking venture capital funding.

Every day we are speaking with business owners who are seeking investor funds for the business. To be honest, some of the ways in which people seeks to raise funds is attrocious and really it is embarrassing.

So here is some basic things to think about before you speak to anyone who can assist you with raising capital.

1) Establish what your core business is, and your competitive advantage. You need to be able to isolate exactly what it is which makes you unique. Saying that you have something which nobody else has (in a developed industry) is pathetic! You may have a unique aspect, but not something which nobody else has.

2) Establish how much money you need to raise in the short term and in the long term. I can not tell you how frustrating it is, when we meet with businesses and the answer to this question is “I dont know.”

3) Establish how the investors can potentially benefit financially from the growth of your company. In other words… how are they going to make money? Is it going to be through a stock exchange listing in the future, a sale to a larger establish firm (for example the sale of Youtube to Google) or are you looking to pay healthy dividends to the investors.

They are 3 key points to think about before you meet with anyone. Ideally, have a business plan outlining the vision for the company, the product range and how you plan to accelerate the growth of your business. This will demonstrate that you are serious about moving forward in this path.

In this industry, people have minimal time and they don’t believe in initial consultations where the client walks in with no clear idea about their business, the direction of it, how much money they require… and why!

As technology advances, it feels like the world is becoming smaller and smaller. Simply go back just 10 years and the idea of trading stocks on the NASDAQ or on the New York stock Exchange, was only for the elite traders. In fact go back 10 years and no one in Australia has ever heard of CFD’s.

Now… Online Trading has broken down all barriers and given Australian traders an all access pass to the world’s leading markets. Whether you are trading Stocks, CFD’s, Currency or Futures, if there is a market open… you can trade it.

Previously companies which has seen phenomonal growth in the US or UK were unable for Australian traders. Imagine if you were able to place trades on Microsoft, Dell, Yahoo, Ebay and Amazon at the beginning of the tech boom.

Now companies that we associate with on a daily basis are available for trading. Whether it be clothes, shoes, food, software, internet, electronics or cars from international companies… we can now trade them.

You dont have to go through the hassle of researching US brokers, placing your money in a US account, having currency risk (on placing your money in US dollars in an account) and having to stay awake at all sorts of strange hours to make trades.

Now, you just go on your computer, click on an icon to open your trading platform, and within seconds the world’s stock exchanges are ready for trading. You can also trade internationally, with your money in an Australian account. Another example of technology making life easier.

What is interesting is the CFD phenomenon. Australian can trade CFD’s over American stocks, but American’s can’t. it has been estimated that over 50% of trades on the London Stock Exchange are CFD’s.

This is what Australia Stock Exchange potentially has to look forward to. It is no wonder, that you can now trade ASX CFD’s on the top 50 stocks and a few major currencies.

I was studying some charts recently, and the above equation is so obvious when you look at the charts.

Now, this isn’t a political post, this is an observation which is clear to anyone who looks. More importantly there was an announcement in the US recently, which gave me an insight into the short to mid term direction of the markets.

Look at the chart below…..

So far the US alone has invested over $430 Billion into funding the war in Iraq. No, when you think about how war stimulates economic growth, some other factors come to mind. Firstly, in economic you are taught the ‘residual value of a dollar.’ For example, every $1 spent, a portion goes into someone else’s pocket, then they spend that money, and then it goesinto someone else’s pocket and the cycle continues.

So $1 spent, can have a total value to the economy of over $3 - $4. Why is this important? A few months ago the US Congress approved an additional $100 Billion in funding for the Iraq. The trend of the markets over the last few years in response to war, is a good indicator of future funding of the war and its impact on the markets.

A trip to the dentist was in order. It has been some time and a cracked tooth made up my mind to visit. I was not that concerned as I already had root canal work done on this culprit.

This was the first time I had been to this dentist. It met the mandatory criteria - looked clean, close to where I live, attractive looking people inside and I had heard some good things from friends of mine.

The girl at reception were very welcoming and asked me to fill out a questionnaire. One of the questions was interesting. “Do you feel nervous when you go to the dentist?” Not being afraid to admit it… I ticked ‘YES’. Not long after my name is called. As we go up the stairs, the dentist gave my form a quick read.

Within seconds of sitting down, he starts stabbing inside my mouth *OWWWWW!!* was my first thought. ‘Thanks for helping me to settle my nerves!’ was my second thought.

After my yelp he decides that it is not able to be fixed and he needs to take out half the tooth to have a look. But just to make sure, he does an x-ray. Red flags and alarm bells. A course of action decided before full information is gathered. Is that usual?

So he then explains that what he can do is…

1) Take out half the tooth and see if it can be fixed. He thinks it is ‘unlikely’ and a ’small possibility’ that it can be fixed. If it can, he will fix it and set a crown on it.

2) “If it cant be fixed, we take the tooth out, shave down the teeth next to them, place caps on them and then put a bridge in.

and the last option, which he didn’t favour at all…

3) Extract the tooth and leave a gap.

I have only been sat in the room 5 minutes. By this stage, I am thinking “what the %$&*?”

I am feeling pain, visualising gaps in my mouth and thinking about eating without a tooth, or the damage it will do to the teeth on either side. Also I am thinking, neither of the ‘preferred’ options sound cheap.

Nerves have turned into flat out fear.

Then he says, ok… now I am going to take out this side of the tooth and see if it can be fixed. I am thinking by this stage I am being rail roaded down a path in which I have minimal information of cost, procedure or other options.

I stop the dentist and ask him can he outline my options and the cost of them. I explain I have meetings today and I need my mouth for those meetings. Not those kind of meetings. He says it’s OK it will only take 30 minutes max.

“I am happy to book another appointment”, I tell him.

The dentist kindly starts outlining the options he was trying to take me down today with no information, very minimal explanation and providing me with the feeling he is selling me and not serving me. In other words, I was getting the feeling it was ‘not’ the best path for ‘me’, but the best path for ‘him’.

The two options were $2,000 and $5,000 for a tooth I had already had root canal on. No information, no explanation, no rapport established and no time to think about different options and a form clearly stating that I am nervous. This hard-selling dentist has turned me right off going to this practice. It certainly didn’t provide any assistance in calming my nerves next time I see a new dentist.

In fact, I will be flying to Sydney next week on business and have booked to see a dentist I do trust.

Maybe dentists are being trained on sales these days. If they are, they should definitely invest time in understanding trust, rapport and ability to explain information in terms normal people can understand. Also, the should become aware, that if someone clearly states they are nervous, railroading them into an expensive path is not the best course of action.

From a business perspective, it highlighted how important trust is, and giving people the time to think. That trust can easily be developed through balanced information, and an understanding of someones personality. If you need to hard sell and railroad people into your product, then get a new product.

Also in listening to my own thoughts, I started to notice how I began generalising an industry because of one persons actions, and by the end of the day 5 other people knew about my experience.

And now I write about this experience in this post which will be read by over 1,000 people. This the impact we can have each day in our business. Positive or negative.

The old tradition of political marketing was all about direct media advertising, with carefully designed ad placement and a whole lot of kissing babies. TV, Radio, and Newspaper photo ops. Media organisations love nothing more than an election year for marketing budgets to open up.

Whilst this platform is still very relevant, there is an entirely new landscape that has opened up and both parties are feeling their way through new media.

The new platforms being adopted are Social Networking sites, Wiki’s, Online Video and Blogs. The main sites the politicians are looking to utilise are Myspace (which now has it’s own political section), YouTube, and Wikipedia.

This new media offer more power and opportunity then ever before to sell their promises… but on the flipside it makes the public acutely aware of the potential pitfalls.

TV, Radio and Newspaper have all the same features. They are expensive, can only provide short messages, and only provide generic messages.

New media is different. Inexpensive, gets instant media coverage, can provide long or short messages, can target specific groups, they can provide interaction with voters and it allows the parties to respond to comments from their opponents.

This is Political Marketing the Web 2.0 way. In the US, YouTube created national Online debates, where Youtube users ask the questions, and viewers can watch the debates live. Australia is looking to follow this lead.

It is now common in the US for candidates to spend more time with influential bloggers, than with journalists. If you look at the websites of Hilary Clinton and Barack Obama, the have embraced the Web 2.0 medium completely. The have blogs, online videos, user profiles and offers to ability for supporters to unite and communicate their message.

Whilst elections can be won this way, they can also be very quickly lost. Just ask John Edwards. The Democrat politician was doing what he called “The Poverty Tour.” His entire campaign was about helping people out of poverty and getting back to basics.
His campaign was ruined when footage of him appeared on YouTube, getting a US$400 haircut. The YouTube footage, made its way to all the blogs, other video sites and then into the mainstream media. His popularity has never been the same since.

It will be interesting to see how John Howard, Kevin Rudd and fringe parties like the Greens use this new media when the election date is announced.

Macquarie Bank is down 20% from it’s all time highs a fortnight ago.  This was mainly caused by concerns on the creditworthiness of consumers taking out Sub Prime loans in the US.  However, you shouldn’t cry for the bank here.  This is the reaction from Jim Cramer on CNBC about the market in the US at the moment.  Armageddon!