Dobber was correct in a comment that he made about my immigration post last week. I should have been more specific about the problems with the current system and the necessary reforms.
Broadly, governments should allow any activity that people want to pursue as long as it does not infringe on the rights of others. In the case of immigration, the activity that government is wrongly trying to prevent is moving to this country to contribute to the economy. One may argue that the presence of immigrants lowers wages and increases unemployment for US natives, but this argument assumes a static economy, which is dubious in light of the empirical data.
The reforms necessary to bring government policy in line with reality are: 1. Grant any citizen of a friendly country a temporary work permit upon request so that anyone who wishes can contribute to the US economy; 2. Grant some kind of temporary legal status to the 11 million undocumented workers currently in the US; 3. Allow temporary workers to earn permanent legal status and US citizenship.
This is essentially the same immigration policy that the United States employed in the late nineteenth and early twentieth centuries. This policy worked then to create the country that we know today and it will work in the future to continually reinvigorate our country’s fabric.
Friday, April 21, 2006
Wednesday, April 12, 2006
Gmail Note to Self Feature
I just submitted the following suggestion to Gmail. If you think it is a good idea please let them know.
It would be really great if I could take notes in Gmail and have them associated with a conversation. Quite often I have additional information associated with a conversation that I need to keep for myself, but do not necessarily want to share with my email correspondents. The feature that I envision would add an action or a button to take a note when viewing an email. By clicking on this button, the editor window would open so that the user could type the notes. The user could then save the note so that it would appear as a “Note to Self” immediately following the previous email in the conversation. The user could in effect comment on each message received.
Here is an example of how I would use this feature. About a month and a half ago, some friends and I organized a ski trip. The conversation view made it really easy to organize all the communications (so thanks for that). My job was to make the hotel reservations. By doing this, I had some information that I wanted to share, like the price, but some information that I didn’t want or need to share, like confirmation number, the sales person’s name and direct extension, and the credit card that I used. What I actually did was to save all this information in a text file, which was ok, but it was completely unassociated with the rest of the context.
Other applications could include noting that a user called the contact to discuss an email, summarizing poll/vote responses, and noting that a user plans to follow-up or take some action based on an email.
Finally on the left hand menu there could be a “Notes” box that would show all current, or archived, or time dated (not sure what would be best here) notes.
There are a couple of ways get some of this functionality currently in Gmail like creating a draft email or sending an email to oneself. The problem with the drafts is that they show up in red in the drafts folder, which is a little confusing and not really what I want. Sending an email to oneself works a little better, but the user can never go back to edit the note once sent and the message automatically goes to the end of the conversation.
It would be really great if I could take notes in Gmail and have them associated with a conversation. Quite often I have additional information associated with a conversation that I need to keep for myself, but do not necessarily want to share with my email correspondents. The feature that I envision would add an action or a button to take a note when viewing an email. By clicking on this button, the editor window would open so that the user could type the notes. The user could then save the note so that it would appear as a “Note to Self” immediately following the previous email in the conversation. The user could in effect comment on each message received.
Here is an example of how I would use this feature. About a month and a half ago, some friends and I organized a ski trip. The conversation view made it really easy to organize all the communications (so thanks for that). My job was to make the hotel reservations. By doing this, I had some information that I wanted to share, like the price, but some information that I didn’t want or need to share, like confirmation number, the sales person’s name and direct extension, and the credit card that I used. What I actually did was to save all this information in a text file, which was ok, but it was completely unassociated with the rest of the context.
Other applications could include noting that a user called the contact to discuss an email, summarizing poll/vote responses, and noting that a user plans to follow-up or take some action based on an email.
Finally on the left hand menu there could be a “Notes” box that would show all current, or archived, or time dated (not sure what would be best here) notes.
There are a couple of ways get some of this functionality currently in Gmail like creating a draft email or sending an email to oneself. The problem with the drafts is that they show up in red in the drafts folder, which is a little confusing and not really what I want. Sending an email to oneself works a little better, but the user can never go back to edit the note once sent and the message automatically goes to the end of the conversation.
Tuesday, April 11, 2006
Wright Amendment?
Over the weekend, my friend Becca, who recently began her career as a flight attendant with Southwest Airlines, brought the dispute over the Wright Amendment to my attention. The Wright Amendment is a federal law that limits flights departing from Dallas’ Love Field to a select number of states bordering or near Texas.For those new to the debate, Dallas has two major airports, the older and smaller Love Field and the newer and larger Dallas Fort Worth International Airport. Southwest is the primary airline operating out of Love Field, while American Airlines has the largest presences at DFW along with many other major airlines.
I am not sure about the details of how this whole situation came into being, but it seems that when Dallas decided to build DFW, they convinced the major airlines to go along with the relocation by telling them that the city would close Love Field. Unfortunately for that plan some of the smaller airlines wanted to keep Love Field open and a federal court agreed with them. In response to that, city and major airline interests lobbied for the Wright Amendment to limit competition from the airlines operating out of Love Field.
Below I briefly describe some of the principle stakeholders in this situation and their interests. Southwest wants to get rid of the Wright Amendment so that they can compete with American to destinations throughout the US. By operating at the larger DFW, American has to pay higher gate and landing fees than Southwest does at Love Field, so American is concerned about allowing Southwest to compete with a lower cost basis (I have not been able to find out how much higher the fees are at DFW than at Love Field). The Cities of Dallas and Fort Worth, who together own DFW, are concerned because DFW apparently has lots of debt due to recent expansions so they want to make sure that DFW can continue to service its debt. The traveling public just wants convenient and inexpensive air transit to and from Dallas and not to have to pick up the tab on DFW’s debt.
To solve this situation, the federal government should repeal the Wright Amendment and the Cities of Dallas and Fort Worth should privatize both Love Field and DFW. Privatization of Love Field and DFW would allow private sector airlines to negotiate the terms of their landing and gate fees with competing private sector airports. This would help equalize the fees at both airports as other low cost carriers, such as Jet Blue, have indicated that they would want to operate out of Love Field if the Wright Amendment was repealed thus bidding up fees. We saw recently in the Indiana Toll Road Deal that private companies are interested in owning infrastructure. So private capital can retire any DFW debt. Finally removing the political conflict of interest can allow market mechanisms and creativity to drive innovation at both DFW and Love Field, which will result in increased value for the consumers.
Other than the narrow interests of the involved politicians, why can’t this work?
For background information look here, here, here, and here.
Labor Shortage in China
Labor Shortage in China May Lead to Trade Shift - New York Times
I am not sure if this article represents a trend or an outlyer. If it is indeed a trend, we may see China represent less of a deflationary force in the world economy.
I am not sure if this article represents a trend or an outlyer. If it is indeed a trend, we may see China represent less of a deflationary force in the world economy.
Thank You Immigrants!
Yesterday, I attended a rally for immigration policy reform in Boston. Similar rallies took place in over one hundred cities across the country in an effort to focus attention on our ridiculous immigration policy that has lead to up to eleven million undocumented people contributing their efforts to the economy outside the law.
I say thank you to the immigrants for having the courage to move to a new country to make a better life for themselves and their families. I also say thank you to the contributions that they have made to our economy by providing the manpower for many of the necessary functions in our economy – in many cases outside legal protection and in jeopardy of being deported by the government of what should be a grateful nation.
Most of all I say thank you to the immigrants for providing me with an opportunity to take part in this kind of rally. Unfortunately there are not very many rallies in support of the policies that I support such as lowering taxes, reducing the size and scope of the federal government, federalism, using American power to topple dictatorships, and reducing trade barriers and distortions. On immigration, I have finally found policy alignment with a group of people who have the desire an ability to hold this kind of rally. So, thank you for that!
I really enjoyed seeing all of the hardworking people rallying so that they can enjoy the freedom to just keep doing what they are doing. At one point, I struck up a conversation with an immigrant carpenter because I couldn’t remember what the chant “Si Se Puede” meant. At first he was a little confused because he thought that I looked Spanish. He really appreciated it when I told him that I am a forth, fifth, and sixth generation immigrant and that I supported their cause. This guy and millions like him are just here to make a buck like the rest of us. They deserve the chance. They contribute. This country needs them.
On a side note, here is an amusing anecdote: While I was listening to one of the speakers, who were generally pretty good the woman handing out the revolutionary communist newspaper did not even bother to ask me if I wanted one. She asked the woman to my left if she wanted a copy, looked at me for a moment, and then moved on to ask some other guy if he wanted a copy. I guess that I did not look enough like a member of the proletariat in my business attire. Unfortunately, I failed to realize quickly enough what was happening or I would have asked her why she was discriminating against me. I guess I had better watch my back when the revolution begins…
I say thank you to the immigrants for having the courage to move to a new country to make a better life for themselves and their families. I also say thank you to the contributions that they have made to our economy by providing the manpower for many of the necessary functions in our economy – in many cases outside legal protection and in jeopardy of being deported by the government of what should be a grateful nation.
Most of all I say thank you to the immigrants for providing me with an opportunity to take part in this kind of rally. Unfortunately there are not very many rallies in support of the policies that I support such as lowering taxes, reducing the size and scope of the federal government, federalism, using American power to topple dictatorships, and reducing trade barriers and distortions. On immigration, I have finally found policy alignment with a group of people who have the desire an ability to hold this kind of rally. So, thank you for that!
I really enjoyed seeing all of the hardworking people rallying so that they can enjoy the freedom to just keep doing what they are doing. At one point, I struck up a conversation with an immigrant carpenter because I couldn’t remember what the chant “Si Se Puede” meant. At first he was a little confused because he thought that I looked Spanish. He really appreciated it when I told him that I am a forth, fifth, and sixth generation immigrant and that I supported their cause. This guy and millions like him are just here to make a buck like the rest of us. They deserve the chance. They contribute. This country needs them.
On a side note, here is an amusing anecdote: While I was listening to one of the speakers, who were generally pretty good the woman handing out the revolutionary communist newspaper did not even bother to ask me if I wanted one. She asked the woman to my left if she wanted a copy, looked at me for a moment, and then moved on to ask some other guy if he wanted a copy. I guess that I did not look enough like a member of the proletariat in my business attire. Unfortunately, I failed to realize quickly enough what was happening or I would have asked her why she was discriminating against me. I guess I had better watch my back when the revolution begins…
Monday, April 10, 2006
Ethanol in Brazil
Yesterday's New York Times reported on the increased use of ethanol in Brazil as a substitute for gasoline. Apparently the Brazilian are greatly increasing their use of ethanol and are nearly energy independent as a country. Good for them.
The key technology here is flex fuel vehicles, which allow the vehicle to operate on either gasoline, an ethanol blend, or some mixture of the two. From the picture in the article, it appears that the ethanol blend sells for approximately 30% less than gasoline, so obviously people are eager to use it. What I am not sure about in this situation is how much of this progress is attributable to private innovation in the presence of a monopoly and how much of this is attributable to government intervention. Brazil has been one of the leaders in "Latin American State Capitalism", so the later would not surprise me at all.
Unfortunately, here in the United States, we are not really doing a good job of following in Brazil's lead:
The key technology here is flex fuel vehicles, which allow the vehicle to operate on either gasoline, an ethanol blend, or some mixture of the two. From the picture in the article, it appears that the ethanol blend sells for approximately 30% less than gasoline, so obviously people are eager to use it. What I am not sure about in this situation is how much of this progress is attributable to private innovation in the presence of a monopoly and how much of this is attributable to government intervention. Brazil has been one of the leaders in "Latin American State Capitalism", so the later would not surprise me at all.
Unfortunately, here in the United States, we are not really doing a good job of following in Brazil's lead:
But Brazilian officials and business executives say the ethanol industry would develop even faster if the United States did not levy a tax of 54 cents a gallon on all imports of Brazilian cane-based ethanol.
The farm belt sees corn based ethanol as a new market to exploit, but only if they can protect it from lower cost imports. How is that good for the US consumer? What we really need to do is drop the tax on ethanol imports and let the market develop. Since Brazil will not be able to supply all of the demand in the near term or any term, there will be a place for corn based ethanol along side the cheaper imports. We need to get smarter about energy policy and by that I mean let the market figure it out.
Wednesday, March 22, 2006
Looking for a Good Cause?
Support my friend Jon Hilton and The Leukemia and Lymphoma Society. Jon is currently raising money through Team in Training and is currently training for a Triathlon in Philadelphia.
Torture Revisited
Andrew Sullivan seems somewhat baffled by the latest poll showing that the majority of Americans favor torturing our enemies in some circumstances. This poll would seem to indicate that the majority of Americans would agree with me that Charles Krauthammer got the better of Sullivan in the torture argument. Most Americans are probably comfortable employing torture if it means maintaining order and security even though it is unquestionably evil.
Although torture is evil, it is evil in a very human kind of way. In fact it is exactly the evil that Jesus came into the world to illustrate, to make explicit. Maybe this is even why Christians seem to be more comfortable with torture than agnostics or atheists. Jesus accepted torture from Cesar but He did not attempt to become the Cesar who did not torture. He explicitly rejected that.
This seems like an interesting irony to the Christianits philosophy that Sullivan rightly calls the administration on. While Christianists want the government to act morally except in the case of torture, Sullivan wants the government to refrain from being a moral actor, except in the case of torture. My own view is that it is not possible for the government to ever be a moral actor, but to only act from self-interest, which is why it is so hard for a Christian to become a Cesar.
A couple of other foot notes: First another way of looking at the Christian vs. atheist/agnostic divide on torture is that if one believes that a person is more than just a body it might be easier to torture that body, but that if one believes that a person is just a body that body becomes more sacred. Second, although it seems to me that the government should the ability to torture in limited circumstances, evidence (pointed out in many cases by Andrew Sullivan) suggests that torture is much more wide spread than I could ever justify. If we are going to do evil, we should make it a conscious decision in every case. It should never become policy.
Although torture is evil, it is evil in a very human kind of way. In fact it is exactly the evil that Jesus came into the world to illustrate, to make explicit. Maybe this is even why Christians seem to be more comfortable with torture than agnostics or atheists. Jesus accepted torture from Cesar but He did not attempt to become the Cesar who did not torture. He explicitly rejected that.
This seems like an interesting irony to the Christianits philosophy that Sullivan rightly calls the administration on. While Christianists want the government to act morally except in the case of torture, Sullivan wants the government to refrain from being a moral actor, except in the case of torture. My own view is that it is not possible for the government to ever be a moral actor, but to only act from self-interest, which is why it is so hard for a Christian to become a Cesar.
A couple of other foot notes: First another way of looking at the Christian vs. atheist/agnostic divide on torture is that if one believes that a person is more than just a body it might be easier to torture that body, but that if one believes that a person is just a body that body becomes more sacred. Second, although it seems to me that the government should the ability to torture in limited circumstances, evidence (pointed out in many cases by Andrew Sullivan) suggests that torture is much more wide spread than I could ever justify. If we are going to do evil, we should make it a conscious decision in every case. It should never become policy.
Tuesday, March 21, 2006
Skiing: Days 10 and 11
As I rode the lift at Killington on Sunday, I realized that I should have blogged this entire ski season so that I would have a record of fun. Well I am starting now better late than never…
I skied Saturday and Sunday at Killington in Vermont. This was my third trip to Killington of the year, and contrary to my expectations it was the most fun. Saturday was pretty rough with cold weather and lots of ice, frozen after a week of 60-degree weather. On Sunday, however, the resort had great conditions after about 4 inches of snow on Saturday night. I spent the morning lapping the mogul run Outer Limits. They were making snow the entire day so the bumps stayed soft, although some parts got a little icy due to the number of people who had the same idea that I had.
In the afternoon I took a couple of runs with my family on the greens that my mom likes and then on a couple of blues for my dad before returning to Outer Limits for the low point of the day. That occurred at about 3:15 when I decided to take a couple of last runs for the day. I bombed down about 85% of the hill before I had a spectacular crash. I tweaked my MCL a little bit (ok a lot) and that pretty much ended my day and maybe my season.
So, unless I am able to squeeze in another day on the slopes before the snow goes away, I am looking at 11 days of skiing this year: 5 at Whistler; 4 at Killington, and 2 at Stowe. I also had two days of snowboarding at Jay Peak, which is a great resort that I am defiantly going to return to next year.
I skied Saturday and Sunday at Killington in Vermont. This was my third trip to Killington of the year, and contrary to my expectations it was the most fun. Saturday was pretty rough with cold weather and lots of ice, frozen after a week of 60-degree weather. On Sunday, however, the resort had great conditions after about 4 inches of snow on Saturday night. I spent the morning lapping the mogul run Outer Limits. They were making snow the entire day so the bumps stayed soft, although some parts got a little icy due to the number of people who had the same idea that I had.
In the afternoon I took a couple of runs with my family on the greens that my mom likes and then on a couple of blues for my dad before returning to Outer Limits for the low point of the day. That occurred at about 3:15 when I decided to take a couple of last runs for the day. I bombed down about 85% of the hill before I had a spectacular crash. I tweaked my MCL a little bit (ok a lot) and that pretty much ended my day and maybe my season.
So, unless I am able to squeeze in another day on the slopes before the snow goes away, I am looking at 11 days of skiing this year: 5 at Whistler; 4 at Killington, and 2 at Stowe. I also had two days of snowboarding at Jay Peak, which is a great resort that I am defiantly going to return to next year.
Indiana Toll Road Deal
I seem to have missed this story last week. In a very positive development, it turns out that the State of Indiana plans to lease the Indiana Toll Road to a private company for a term of 75 years. Macquarie-Cintra, an Australian-Spanish consortium will pay the state $3.8B for the lease and will have management control over the toll road including maintenance and collecting toll revenue. Apparently, Indiana plans to spend the lease money to finance other road improvements in other parts of the state.
I have previously written about the potential of privatizing much of our transportation infrastructure. We need many more of these kinds of deals where government turns over operational responsibility of public assets to private firms. (In fact I would go farther and assert the Indiana should simply sell the toll road to Macquarie-Cintra.)
I found a pretty good financial analysis of the Indiana Toll Road that Crowe Chizek Financial prepared for the state. Currently the tool road has annual revenues of about $95M and annual operating expenses of about $70M. The financial analysis projects these revenues and expenses out for the next 75 years based on a variety of assumptions to reach the conclusion that if the state continued to operate the toll road it would be the equivalent of a public company worth $1.92B. That Macquarie-Cintra is willing to pay $3.8B shows how optimistic the consortium is about its ability increase cash flow!
It will be interesting to see how this deal unfolds. Macquarie-Cintra is clearly paying a fairly dear price for the toll road based not only on the financial analysis, but also on the fact that there are not too many public companies with $100M in sales, 20% net operating margins, and $3.8B market capitalizations. To make this work out, Macquarie-Cintra are going to have to move quickly to implement cost reducing technology, such as EZ-Pass, and find ways to increase revenues. Hopefully, this deal and others like it will show the benefits to private profit seeking firms operating a larger share of what was once considered public property.
I have previously written about the potential of privatizing much of our transportation infrastructure. We need many more of these kinds of deals where government turns over operational responsibility of public assets to private firms. (In fact I would go farther and assert the Indiana should simply sell the toll road to Macquarie-Cintra.)
I found a pretty good financial analysis of the Indiana Toll Road that Crowe Chizek Financial prepared for the state. Currently the tool road has annual revenues of about $95M and annual operating expenses of about $70M. The financial analysis projects these revenues and expenses out for the next 75 years based on a variety of assumptions to reach the conclusion that if the state continued to operate the toll road it would be the equivalent of a public company worth $1.92B. That Macquarie-Cintra is willing to pay $3.8B shows how optimistic the consortium is about its ability increase cash flow!
It will be interesting to see how this deal unfolds. Macquarie-Cintra is clearly paying a fairly dear price for the toll road based not only on the financial analysis, but also on the fact that there are not too many public companies with $100M in sales, 20% net operating margins, and $3.8B market capitalizations. To make this work out, Macquarie-Cintra are going to have to move quickly to implement cost reducing technology, such as EZ-Pass, and find ways to increase revenues. Hopefully, this deal and others like it will show the benefits to private profit seeking firms operating a larger share of what was once considered public property.
Friday, March 17, 2006
Pandora Stations
I just added a box at the bottom right with links to my Pandora stations. Pandora is a really cool internet radio station that chooses songs based on which artists or songs a user says that they like. I am still trying to tune the stations to my liking, but it is a really fun way to discover music. Enjoy!!
If you would like to add Pandora stations to your blog, step by step instructions are here.
If you would like to add Pandora stations to your blog, step by step instructions are here.
Thursday, March 16, 2006
Breath of Freedom
Tamar Jacoby had an interesting opinion piece in yesterday’s Wall Street Journal detailing the ongoing debate on immigration reform in the US Senate. At issue is the fate of the eleven million undocumented workers currently in this country. We simply have to find a legal framework so that these people can continue to contribute to our country’s economy. We currently have a 4.8% unemployment rate and in the worst times of the last downturn, unemployment never went much above 6%. That is a spectacular performance even with 11 million undocumented workers who supposedly steal Americans’ jobs.
Undocumented workers do not threaten America’s prosperity. They increasingly form the backbone of many labor-intensive industries. I can only describe plans that call for undocumented workers to return to their home country before applying for legal status as ridiculous. Are we really going to disrupt entire sector of our economy so that people can go through the motions of visiting their home country and then returning. The same goes for any so called amnesty. The problem is not that people have broken this country’s laws in order to try to improve their lot in life. The problem is that our current immigration laws are ridiculous.
Passing laws and building fences to try to keep people from realizing economic prosperity can never work. The resourcefulness of our undocumented workers in bypassing our border patrol and evading our INS agents proves that. It also proves these undocumented workers have the stuff to make a positive impact in our society if given the chance.
Here is a proposal: lets truly liberalize our immigration policy so that anyone who wants to move to this country to work can do so. That solves the current problem as well as the problem going forward. If our system cannot handle all that at once then lets phase it in over five years, but by all means give these masses a breath of freedom.
Undocumented workers do not threaten America’s prosperity. They increasingly form the backbone of many labor-intensive industries. I can only describe plans that call for undocumented workers to return to their home country before applying for legal status as ridiculous. Are we really going to disrupt entire sector of our economy so that people can go through the motions of visiting their home country and then returning. The same goes for any so called amnesty. The problem is not that people have broken this country’s laws in order to try to improve their lot in life. The problem is that our current immigration laws are ridiculous.
Passing laws and building fences to try to keep people from realizing economic prosperity can never work. The resourcefulness of our undocumented workers in bypassing our border patrol and evading our INS agents proves that. It also proves these undocumented workers have the stuff to make a positive impact in our society if given the chance.
Here is a proposal: lets truly liberalize our immigration policy so that anyone who wants to move to this country to work can do so. That solves the current problem as well as the problem going forward. If our system cannot handle all that at once then lets phase it in over five years, but by all means give these masses a breath of freedom.
Wednesday, March 15, 2006
The Road to Serfdom
Although it is a bit simplistic in its reasoning and over dramatic in result, I like this cartoon, which illustrates the dangers of ceding too much control to government planners. Defeating Fascism and Communism abroad took the better part of last century. Defeating Islamic Totalitarianism abroad will likely require the better part of this century. We must remain vigilant against the specter of totalitarianism at home.
Friday, March 10, 2006
Wednesday, March 08, 2006
Sales Philosophy
Sales is the process of creating value for your customer in order to capture a piece of that value for your company and yourself.
A few years back I heard a non-sales executive say that sales is the process of overcoming objections. This seemed wrong to me, but at the time I could not exactly say why. Now that I have formulated my own definition I know exactly why that executive was wrong.
The sales process actually consists of two separate but interrelated processes: creating value and capturing value. Because creating and capturing value is what business is all about this clearly makes sense, but lets look at how these two processes influence sales.
When people talk about creating value, often they mean creating value for their company’s shareholder, but in sales creating value means creating value for your customer and your customer’s shareholders. Creating value can take a number of different forms. Maybe the product is so fantastic that its value is obvious to the customer. In that case sales just got a lot easier!
More often, creating value takes the form of explaining the product and more importantly how the customer can utilize the product to improve some business metric. When the underlying products are nearly identical, creating value may take the form of improved delivery, better terms, or easier business process interactions. Alternatively the salesperson could have such a pleasant personality that the customer just loves to do business her; that’s also creating value.
Notice that in the discussion about creating value, I did not mention price. As the sales process progresses, your customer will place a certain value on your total sales offering. The price that the customer pays for that value is the mechanism that your firms use to capture a portion of the value that the customer sees. If your sales offering can deliver much greater value to your customer than your competition then you will have the ability to command a higher price.
It is really that simple. Unfortunately many people do not seem to understand that sales is a two way street. If the customer does not see the value, you either have not done a good enough job of articulating the value or you are deluding yourself about the value that your company can provide to your customers. Likewise, just because one customer thinks that a particular product is the best thing in the world does not mean that another customer will recognize that the product brings the same value to them. Value is customer specific, so creating value is a separate, often personal process with every customer.
So that is my sales philosophy. I try to make sure that it permeates every aspect of my sales engagements. If you like it, make it the framework for your sales engagements too. That is of course unless you are calling on my customers!
A few years back I heard a non-sales executive say that sales is the process of overcoming objections. This seemed wrong to me, but at the time I could not exactly say why. Now that I have formulated my own definition I know exactly why that executive was wrong.
The sales process actually consists of two separate but interrelated processes: creating value and capturing value. Because creating and capturing value is what business is all about this clearly makes sense, but lets look at how these two processes influence sales.
When people talk about creating value, often they mean creating value for their company’s shareholder, but in sales creating value means creating value for your customer and your customer’s shareholders. Creating value can take a number of different forms. Maybe the product is so fantastic that its value is obvious to the customer. In that case sales just got a lot easier!
More often, creating value takes the form of explaining the product and more importantly how the customer can utilize the product to improve some business metric. When the underlying products are nearly identical, creating value may take the form of improved delivery, better terms, or easier business process interactions. Alternatively the salesperson could have such a pleasant personality that the customer just loves to do business her; that’s also creating value.
Notice that in the discussion about creating value, I did not mention price. As the sales process progresses, your customer will place a certain value on your total sales offering. The price that the customer pays for that value is the mechanism that your firms use to capture a portion of the value that the customer sees. If your sales offering can deliver much greater value to your customer than your competition then you will have the ability to command a higher price.
It is really that simple. Unfortunately many people do not seem to understand that sales is a two way street. If the customer does not see the value, you either have not done a good enough job of articulating the value or you are deluding yourself about the value that your company can provide to your customers. Likewise, just because one customer thinks that a particular product is the best thing in the world does not mean that another customer will recognize that the product brings the same value to them. Value is customer specific, so creating value is a separate, often personal process with every customer.
So that is my sales philosophy. I try to make sure that it permeates every aspect of my sales engagements. If you like it, make it the framework for your sales engagements too. That is of course unless you are calling on my customers!
South Dakota and Abortion
So, South Dakota just passed a law prohibiting all abortions except to save the mother’s life. My response to this is, “Oh brother…”
I have wanted to write a longer post on my position on abortion, but that never materialized. So here is the short version.
I believe that abortion is morally wrong. It is morally wrong not because of its similarity to murder, but because the action represents an active rejection of God’s invitation to love. It seems very difficult to reconcile the act of abortion with Jesus’ urging that we love our neighbors as ourselves.
So what about the legality of abortion? Abortion is not like murder. While I reject murder on the same moral grounds, of failing to love, as abortion, the reason that we need a law against murder stems from the state’s obligation to enforce order. Society would simply cease to exist if individuals could murder one another with impunity. The parallel for abortion simply does not hold.
In fact not only is society not threatened by abortion, but laws designed to prohibit abortion actually threaten society’s morality. I firmly believe that the state should not have the power legislate morality. Travis keeps using a Janice Rodgers Brown quote, “Where government moves in community retreats…” I think this is true. I also think that where government moves in morality retreats. Although we may fail to actively sin when the state (read men with guns) prevents us from sinning, we also fail to actively love.
I have wanted to write a longer post on my position on abortion, but that never materialized. So here is the short version.
I believe that abortion is morally wrong. It is morally wrong not because of its similarity to murder, but because the action represents an active rejection of God’s invitation to love. It seems very difficult to reconcile the act of abortion with Jesus’ urging that we love our neighbors as ourselves.
So what about the legality of abortion? Abortion is not like murder. While I reject murder on the same moral grounds, of failing to love, as abortion, the reason that we need a law against murder stems from the state’s obligation to enforce order. Society would simply cease to exist if individuals could murder one another with impunity. The parallel for abortion simply does not hold.
In fact not only is society not threatened by abortion, but laws designed to prohibit abortion actually threaten society’s morality. I firmly believe that the state should not have the power legislate morality. Travis keeps using a Janice Rodgers Brown quote, “Where government moves in community retreats…” I think this is true. I also think that where government moves in morality retreats. Although we may fail to actively sin when the state (read men with guns) prevents us from sinning, we also fail to actively love.
Tuesday, March 07, 2006
Monopoly Power
On 3/4/06, Travis links to an article written by Allan Greenspan in the 1960’s to assert that monopolistic behavior does not exist. Travis misreads Greenspan if he thinks the article disproves the notion of a monopoly. Greenspan states:
Therefore, the existence of a free capital market does not guarantee that a monopolist who enjoys high profits will necessarily and immediately find himself confronted by competition. What it does guarantee is that a monopolist whose high profits are caused by high prices, rather than low costs, will soon meet competition originated by the capital market.
Monopolistic behavior exists. Greenspan’s point is that if a monopolist holds his prices too high for too long he risks allowing a competitor to profitably enter his market. In the presence of free capital markets, monopolies, like glory, are fleeting. Here is where I actually have an issue with Greenspan’s article.
Greenspan uses the nineteenth century western railroad industry as an example of how flawed government policy aided in creating monopolies, which other flawed government policies tried to eradicate. However, Greenspan’s analysis hinges on “the existence of free capital markets.” However one of the notable characteristics US economy of the nineteenth century was the lack of liquidity in the capital markets. Without free capital markets, competitors would not be able to generate capital to challenge firms charging monopoly rents. In fact of the reasons that many people wanted to move to a silver standard was to increase liquidity so that competition could emerge in the railroad industry. The nineteenth century railroad industry is a poor example because the mechanisms that Greenspan advocates to regulate monopolies did function well at the time.
In addition, while there may be some truth to the fact that Standard Oil gained important efficiencies by being an integrated monopoly oil supplier, Standard Oil is also a poor example of a good monopoly because of the well documented cases of corruption and thuggery that protected it’s monopoly status.
Nonetheless, I did like the thesis of Greenspan’s piece in that it illustrates that monopoly power can be regulated by the threat of competition posed by the capital markets funding new market entrants. However, this regulation can only be viewed as a kind of delayed regulation in that it takes time for other firms to enter monopoly markets and become competitive. Unfortunately, this type of regulation cannot remove the dead weight loss caused by monopoly.
So are we ready to dispense with the Justice Department’s regulation of monopolies? Certainly our capital markets are extremely liquid and persistently low long-term interest rates ensure that firms should have no trouble finding capital for new investments. In fact, one of the bigger concerns about today’s economy is the lack of new investment ideas. But my concern is, why does monopoly power still exist? In this case, why is every song on iTunes $0.99? Are there structural issues in the music industry that allow monopolies to exist there without the threat of emerging competition? I will be interested to see the follow-up to this investigation.
Monetary Policy and Monopoly Power
While I was writing the Monopoly Power post, I thought about an interesting monetary effect. If capital markets ultimately regulate monopoly power, then, all else being equal, the extent of monopoly power that a firm can exhibit will be directly related to interest rates. When interest rates are high, like in the late nineteenth century, firm’s monopoly power will also be relatively high. When interest rates are relatively low like today, monopoly power will be low.
So, in addition to the other effects that accompany the Federal Reserve raising interest rates to cool the economy, we can add increasing firms’ monopoly power. (Other than commodity companies, each firm has a monopoly on its brand and products.) So rising interest rates give firms extra margin to raise prices, which increases the dead weight loss to the economy and contributes to the slowing effect.
So, in addition to the other effects that accompany the Federal Reserve raising interest rates to cool the economy, we can add increasing firms’ monopoly power. (Other than commodity companies, each firm has a monopoly on its brand and products.) So rising interest rates give firms extra margin to raise prices, which increases the dead weight loss to the economy and contributes to the slowing effect.
Friday, March 03, 2006
Roundup of Regular Reading
So here is a brief list of blogs and articles that I read on a fairly regular basis. Check them out and please let me know if I am missing something that I might really enjoy!
I read the Andrew Sullivan’s Daily Dish in its entirety every day. I appreciate Andrew’s writing because of our shared classical liberal/libertarian worldview and our shared Catholic religious background (although Andrew’s current relationship with the Church tends to be in flux). The writing really challenges my thinking because Andrew is a real intellectual while I am a wanta-be intellectual and because of the very different experiences that he has had as a gay man.
The first blog that I started reading and one that I still read almost every day is James Taranto’s Best of the Web Today (the blog has a different url every day and is usually updated around 3:00). Taranto usually has a good roundup of the top political news stories of the day from the viewpoint of a conservative editorial page writer. The site makes regular digs against lazy journalists and overly politically correct behaviors. Sometimes there is a bit of an inside baseball view of journalism, but this is made up for by Taranto’s wit.
Ever since the week that Dan Savage guest blogged for Andrew Sullivan last summer, I have regularly read Dan’s Savage Love advice column. In fact I spent hours reading most of the archives that are available! I don’t know which rock I must have been under for the past decade, but now that I know about it I find the column one of the most entertaining things that I read each week. Dan’s often irreverent responses to the wide range of sexual and relationship questions is must read material.
In the same vein, just yesterday I came across Clue Chick which is a blog written by an anonymous chick who is into picking up dudes online for no strings attached sex. I have never been into this scene myself or known anyone who was so it is really interesting to read about some of the finer point of this lifestyle.
On the Sports side, my friend Pat and some other guys write The Blue-Gray Sky, which is probably the most in depth blog commentary on Notre Dame Football. For those unfamiliar with Notre Dame Football, the title of this blog is a reference to Grantland Rice’s “The Four Horsemen”, an article that led to the creation of one of the most famous sports pictures. The first sentence of the article is, “Outlined against a blue-gray October sky, the Four Horsemen rode again.” Pat and friends do a great job of analyzing the Notre Dame’s games, opponents, recruiting, coaching, polls, and much more. Recently some members of the group also started a site focusing on Notre Dame Basketball called The Fieldhouse, which is a reference to the first building where Notre Dame’s basketball team played. Like most Notre Dame fans, I am not a big a fan of basketball as football, but I bleed gold and blue no matter what the sport. The great thing about both sites is that for years, I have used Pat as my information gathering system on Irish sports, but now everyone has the same access.
Finally, I always try to read Dobber’s World and Neoperspectives by my friends Dobber and Travis, respectively. Dobber and Travis are big-time libertarians and constantly inform their readers about the doings of the mafia-government. Of course Dobber is actually a military officer for that mafia-government, but I guess that is beside the point…
What am I missing? Please drop me a line in the comments section if there is a great blog out there that I should start reading.
I read the Andrew Sullivan’s Daily Dish in its entirety every day. I appreciate Andrew’s writing because of our shared classical liberal/libertarian worldview and our shared Catholic religious background (although Andrew’s current relationship with the Church tends to be in flux). The writing really challenges my thinking because Andrew is a real intellectual while I am a wanta-be intellectual and because of the very different experiences that he has had as a gay man.
The first blog that I started reading and one that I still read almost every day is James Taranto’s Best of the Web Today (the blog has a different url every day and is usually updated around 3:00). Taranto usually has a good roundup of the top political news stories of the day from the viewpoint of a conservative editorial page writer. The site makes regular digs against lazy journalists and overly politically correct behaviors. Sometimes there is a bit of an inside baseball view of journalism, but this is made up for by Taranto’s wit.
Ever since the week that Dan Savage guest blogged for Andrew Sullivan last summer, I have regularly read Dan’s Savage Love advice column. In fact I spent hours reading most of the archives that are available! I don’t know which rock I must have been under for the past decade, but now that I know about it I find the column one of the most entertaining things that I read each week. Dan’s often irreverent responses to the wide range of sexual and relationship questions is must read material.
In the same vein, just yesterday I came across Clue Chick which is a blog written by an anonymous chick who is into picking up dudes online for no strings attached sex. I have never been into this scene myself or known anyone who was so it is really interesting to read about some of the finer point of this lifestyle.
On the Sports side, my friend Pat and some other guys write The Blue-Gray Sky, which is probably the most in depth blog commentary on Notre Dame Football. For those unfamiliar with Notre Dame Football, the title of this blog is a reference to Grantland Rice’s “The Four Horsemen”, an article that led to the creation of one of the most famous sports pictures. The first sentence of the article is, “Outlined against a blue-gray October sky, the Four Horsemen rode again.” Pat and friends do a great job of analyzing the Notre Dame’s games, opponents, recruiting, coaching, polls, and much more. Recently some members of the group also started a site focusing on Notre Dame Basketball called The Fieldhouse, which is a reference to the first building where Notre Dame’s basketball team played. Like most Notre Dame fans, I am not a big a fan of basketball as football, but I bleed gold and blue no matter what the sport. The great thing about both sites is that for years, I have used Pat as my information gathering system on Irish sports, but now everyone has the same access.
Finally, I always try to read Dobber’s World and Neoperspectives by my friends Dobber and Travis, respectively. Dobber and Travis are big-time libertarians and constantly inform their readers about the doings of the mafia-government. Of course Dobber is actually a military officer for that mafia-government, but I guess that is beside the point…
What am I missing? Please drop me a line in the comments section if there is a great blog out there that I should start reading.
Thursday, March 02, 2006
School Choice
Thanks to everyone who commented on my compelling interest question a few weeks back. Glad to see that we were able to get some discussion going. Also I am glad to see that most people seem to believe that the government has some interest in funding the education of the next generation. My concern with a completely private education system is that parents of school-aged children typically would struggle to fund their children’s education, which could result in a generation of people who lack the skills to make a meaningful contribution to society – especially in a rapidly globalizing world in which low skilled laborers in the U.S. must compete with people in third world countries that are just joining the world economy. Ultimately threat of increased competition at the lower end of the skills spectrum should focus public attention on the great importance of improving education so that the U.S. can continue to maintain a competitive edge.
With that in mind, I was happy to read this opinion piece in the Wall Street Journal, which describes the state of education in Minneapolis, one of the leaders in adopting school choice. Apparently low income and minority parents are pulling their children out of the public schools and sending them either to suburban public school districts or to charter schools in the city. I particularly liked this paragraph containing quotes from a community leader:
With that in mind, I was happy to read this opinion piece in the Wall Street Journal, which describes the state of education in Minneapolis, one of the leaders in adopting school choice. Apparently low income and minority parents are pulling their children out of the public schools and sending them either to suburban public school districts or to charter schools in the city. I particularly liked this paragraph containing quotes from a community leader:
Black leaders like Louis King have had enough. He has a message for the school board: "You'll have to make big changes to get us back." He says the district needs a board that views families as customers and understands that competition has unalterably changed the rules of the game. "I'm a strong believer in public education," says Mr. King. "But this district's leaders have to make big changes or go out of business. If they don't, we'll see them in a museum, like the dinosaurs."School choice has been a reality in Minneapolis for over fifteen years, but is not even offered to the majority of parents and students in this country. We need to increase the pressure to allow more educational options in this country or we will not be prepared for the emerging threat of globalization.
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