The Pit - IMI Trust

When companies choose to have nauseatingly redundant Flash intro pages is having a Skip Intro button signifyng that the content on the page is worthless and not worth seeing?  

Well…Yes!  

Does a kettle have more value because it displays a pretty, neon light show before it starts boiling water? Well…No!  

Redundant design is bad.  There is a lot more to say about this subject so….*****permission to skip blog post enabled*****

Now when you use Mozilla and have Skype installed, a Skype icon appears next to phone numbers on browsers. You simply click on the icon and the call is placed. 

For those not in the know, Skype is the most popular global internet telephone system.  Calls can be placed through your internet connection as if you were making calls on a landline.

What makes this simple addition so remarkable is that Skype have accessed the second most popular browser on the net.  Approximately 18% of all web users use Mozilla.  This means millions and millions and millions of people will have this functionality available to them.  No amount of advertising and sponsorship can match that reach. 

By creating a simple, yet powerful joint venture, Skype will boost their revenues by millions overnight.  You too could do the same thing.  Maybe not to the same scale but by choosing your joint venture partners carefully you could effectively double or triple your business.  If you do, you may need to use this number…

- Say Hello to the Australian Tax Office.  HELLO!!

Notice how Cisco Systems has been trying to protect its trademark of iPhone from usage by Apple?

Notice how Apple Computers and the Beatles record company Apple have been in a legal feud for decades because of usage of the word Apple?

Notice how Microsoft’s Vista operating system has been launched to huge fanfare, meanwhile failing search engine, Alta Vista has not put up a fight?

Will Alta Vista’s usage increase during this period of Microsoft marketing?  They have a lot of ground to catch up on Google but any ground is good ground.

This blogging thing seems relatively easy.  Every once in a while you post some commentary about what you want, the news of the day, some story you want to re-tell or just shoot the breeze about something banal. 

However, many companies that are adopting blogging are struggling to post.  They are getting writer’s block.  Is the subject worthy of commentary? Will readers laugh at my attempts at communicating?  Is there even anyone out there?

‘Blogophobia’ seems so prevalent that major corporates are paying bloggers thousands of dollars a month to write 3 or 4 posts.  To the average blogger that seems like a dream.  To a company, that seems scary that the going rate for a blogger is so high.  Well, there is an alternative…

PayPerPost is a start-up based in the US that is connecting writers with companies that need content.  Bloggers can get paid and companies can pay for content.  Blogger purists are turning there nose up at the idea that you can outsource such a personal form of communication.

For us, this is further evidence that you are able to outsource even the most minor of functions to free up time for yourself and the people at your company.  Many companies in Australia are still doing accounting, archiving, book-keeping, word-processing and other support functions all in-house. 

Companies choose not outsource these functions because they like maintaining control, however, by outsourcing these functions you can give each action a unit price.  A cost-per-word, the price per pdf, the record keeping costs all have unit value.  If you know that it costs $20 to process a document and you can be certain what you need to do to make the process profitable. 

And everyone likes profit…even bloggers.  Well most of them, anyway

Unless you have been hiding with the weapons of mass destruction this week, you would have noticed that Microsoft have released Windows Vista.

You have to love the hard sell. Not many corporates really do it to consumers anymore. Not Apple, not Google, not the oil companies, not the car manufacturers. They are all into the brand.  Microsoft have allocated US$500million to marketing their new operating system and it shows.  Come back Crazy Frog all is forgiven.

Actually, Microsoft, well done for bringing back blanket coverage in marketing and sticking it in my face everywhere I look. It is a good reminder as to why you are a $300 billion company.

The truth is the only companies persistantly doing the hard sell is the credit card companies and the banks. Can’t understand why they keep on announcing record profits.  Probably because if you put a product in front of a consumer that services a need then they consume it…

When I checked out the Microsoft site to read the Vista marketing, i was stunned to see 100 reasons as to why Vista is so great. If you were absolutely insane… that is perfect for you to discover all of Vista’s benefits. if you are a bit more human, they had the highlighted benefits. From a marketing perpective, this warmed my heart.

The truth of the matter is I am going to Harvey Norman, or similar electrical retailer, and ask for a PC that is loaded with XP.  I know for a fact they will be fire-sale-ing that stock so I can get one or seven really cheap.  That is only one reason but better than the 100 reasons Bill gave me for getting Vista. 

Experts have come out of the their holes to comment on Vista.  Us included. The reality is in 2 to 3 years time, we all know we are going to be using it. This should impact their share price of (MSFT) Microsoft significantly. Will its recent bull run continue until then?  Maybe.

PS. Bill, I dont care that you have copied Apple, nor do I care that they will release something even more impressive with Leopard. Which they won’t because I’m over operating systems named after big cats.  Just please be taking notes when they do. Look forward to my Wow beginning Now!

Henry Paulson, former CEO of investment banking giant Goldman Sachs and now US Treasury Secretary is the man that the US financial markets are pinning their hopes on to stimulate the market for US exports to China.  The US is in a massive hole to China in its balance of payments.  Consider…

• Most junk found in street markets is ’Made in China’. 
• Most middle-order and high-end, manufactured items that are commonly known as ‘US Brands’ are Made in China
• In the US market alone, Chinese investors have around $1trillion in US Currency

The US is not happy with this and want to redress this imbalance.   They believe in ‘Hank’, as he is known, that Ben Bernanke, Chairman of the US Federal Reserve has deployed a dedicated to team to facilitate this ‘mission’.  If Hank can’t do it, no-one can. 

Henry Paulson is known for his ties in China. His relationship with the Government and Corporate Enterprise, is seen as the fundamental reason Goldman Sachs has strong credibility in China. But there is more to it than that.  John Thornton, his second in command while at GS, was the first western business leader to take up a full-time teaching role in China.  Tsinghua University is China’s leading business university and is producing 1200 MBA’s per year.  These link led GS to be Lead Manager in the ICBC IPO and numerous other domestic listings. 

Goldman Sachs, is one of the only US companies freely doing deals in China. Obviously, George Bush noticed the respect he received with his Chinese dealings, all this without the rigmarole of actually having to go to war. 

The US want him to make the US position in China stronger.  The first step is to encourage China to float their currency, the Chinese Yuan, to enable the massive trade deficit to close.  China’s approach is ”We will… eventually!”.  Without Hank on the case, it would have been a definite ‘No’. 

Hank Paulson is a faciliator of business.  He realised long ago you can’t just ‘take’.  There has to be a balance.  In order to receive you have to give. Funnily enough, as the US consumer ‘gave’ for Christmas, the Chinese manufacturers ‘received’.

There are some huge tech success stories around the world.  Many that started with a few people with vision and now household names.

Steve Jobs with Apple Computer, Larry Ellison with Oracle, Sandy Lerner and Len Bozack were the brains behind Cisco Systems and Jerry Yang & David Filo made Yahoo! stratospheric.  More recently, Larry Page and Sergey Brin made Google synonymous with search, Chad Hurley and Steve Chen did the same with YouTube and Online Video.

All these companies have been helped along by the capital corporation with the midas touch, Sequoia Capital.  Without Sequoia Capital it is likely that Google and YouTube may have fallen to oblivion. They needed help to get off the ground.  Genius only gets you so far.  Money takes you to the next level. Not just money, but business acumen and experience in finding ‘the next big thing’.

Sequoia Capital have sunk money into many companies that have become hugely successful.  After searching on Google, you discover that 10% of the value of the NASDAQ is made up of companies which have had some sort of business involvement with Sequoia Capital.

They promote themselves as the entrepreneurs behind the entrepreneurs.

The world of capital raising can be highly lucrative and very risky. And many capital raising companies raise capital for the sake of taking a cut.  Sequoia Capital have backed their deep pockets up with great results.  They have ensured that entrepreneurs are able to grow their dreams.

How many Google’s have we not seen?  How many other tech nerds with a passion have missed out on a multi-billion fortune?  Without the seed funding, and without the business guidance, where are these guys today with Page and Brin and Hurley and Chen?

Behind every great success story there is a depth that is rarely explained or mentioned.  We see the end result, nothing else. Companies like Sequoia Capital make it happen.

The reason they are successful is because they are passionate and have a believe in the value of ‘The Idea’ and ‘The Culture’ underpinning the idea.  In business, the support is what you need to succeed.  That and billions of dollars.

Corporations spend billions a year promoting themselves. Advertising on billboards, TV, radio, online banner ads, nearly everywhere you look. On your television, on buses, painted on football fields and even on the skin of boxers, there is brand placement everywhere.

Companies focus on the promotion of their brand as a means of communicating with their clients. They do this through their logo, their slogan, their colours and the types of people that appear in their advertisements.  On the other hand, some companies use the ‘Celebrity CEO’ to push the brand through.  Richard Branson and Donald Trump are known for their amazing abilities for self-promotion.

Web 2.0 has capitalised on this theme. The principles of Web 2.0 are that there are open channels of communication.  Consumers can connect with the company. On the flip side, a CEO can present themselves to be human. This allows consumers to move beyond the brand and create a connection with another human.

This connection creates loyalty.

A good example of this is Jonathan Schwarz. A recent blog post headlined 5 things highlights 5 things you may not know about him.Why does he do this?

The answer is simple.  To break down barriers and create trust and loyalty. It breaks down the myth of the superhuman or the egotist at the head of the company. It allows him to connect.

Branding is an important aspect to the growth of any company. Introducing your clients to a personality within your business builds loyalty.

Steve Jobs at Apple has done an amazing job in pushing forward Apple’s growth. The personality has become an integral part of the Apple Brand where he garners unwavering loyalty from users of his products.  The downside to this is that there is concern about the future of company when Jobs steps down.  It is clear there are benefits to showing personality but there are issues too.  These themes are relevant to your business too.

• How do you build loyalty with your client?
• What personality shines through your business?
• Does that personality appeal to your target audience? 
• What is the impact on your company if that personality disappears?

The answers are different to different companies and their particular situation.  What is crucial is that you should explore these themes and how they can impact your business.  Don’t be scared to try something new.

Approximately 4 years ago I was looking at Corus Steel shares on the London Stock Exchange.  They were at the very low price point of 9p per share.  Earlier in the year they had been down to 5.5p.  Analysts believed then the company was going to go bust because there was little demand for steel in the market.

As Corus was the new identity of the formerly government-owned British Steel I believed that it was unlikely to go bust as the government would step in at some point if the situation got really bad.

I then moved house, moved country, started up in a different industry, spent some time with my wife and forgot all about the stock.  I was planning on a Buy and Hold strategy especially for stocks who have been affected by bad news.

I was browsing the newspaper today and lo-and-behold, Corus caught my eye.  As at close of trading 10 January 2007 it sat at 536p.  A 59.5x appreciation or a 5950% rise in that time.  My ‘dipping-the-toes’ investment of approximately $12,000 would have been worth around $800,000.

March 21 2003 - Corus Group - 9p. 
January 10 2007 - Corus Group - 536p.

I really should have bought shouldn’t I?

“Microsoft is the only company in the world that removes features to create a great new product”

- Anon