Archive for June, 2008

Little things

Published June 26, 2008 General 3 Comments
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“There is much to be said for just putting one foot in front of the other every day” — Warren Buffett

When looking at a problem it’s always tempting to go for the big solution rather than looking for a series of little improvements.

I can understand the attraction.

Big feels like it will make an impact.

Big gets people’s attention.

Big is easy to sell.

Big hogs the headlines.

But, let’s not forget the advantages of little…

Little is easy.  Just one small step.

Little learns from experience.  Each change builds on the lessons of the last.

Little can happen today, without lots of planning and organising (whereas big always seems to be something you’ll do sometime in the future).

Little is low risk, because it lets you be wrong some of the time.

Little is mostly under the radar.

Here is an excellent example of this, which I heard about at the Pecha Kucha (pronounced: pe-cha-cha, if the organiser from Auckland is any guide) night held in Lower Hutt a couple of weeks ago.

One of the speakers that night was Kris Sowersby.  He is a typeface designer.  He designed the All Blacks font (and many others).

One of the examples he showed was a font he designed for a pitch to Telecom Directories (back in the day before this part of the business was sold).

He came up with a bunch of simple design changes to improve readability and make the millions of bulky directories they print each year more efficient to produce (i.e. less paper, less ink, etc).

Part of this was a new font, called Aperture, designed especially for this purpose.

Here it is compared side-by-side with the current font (click to see full size):

It was designed specifically to be legible at smaller sizes, unlike most fonts which are optimised at around 10-14px.

It was designed to be easy on the eye. It was based on the “Humanist” style, i.e. open, easily distinguishable letterforms, unlike the current fonts used which are based on the “Grotesque” style, i.e. closed, rigid, indistinguishable and mechanical letterforms.

And, it was designed to make better use of the space.  In fact, it was estimated that they would be able to save between 8% - 15% on every page (the pink area in this mock-up - click to see full size):

Imagine the total saving that could have been achieved in time by making this simple small change. You’ll have to, because they didn’t go for it.

Big is having a corporate commitment to environmental issues, perhaps even a long-term goal of being carbon neutral.  Yadda, yadda.

Little is taking the opportunities to make real improvements when they are presented to you.

Never say never

Published June 23, 2008 New Zealand 6 Comments
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I was previously on record saying that I would never bungy.

That was a perfectly reasonable position for somebody who’s not especially fond of heights to take, I thought.

The problem with this of, course, is that it puts in doubt all of the other things I’ve said I’ll never do.

Niet te geloven 3-1 verloren

Published June 22, 2008 Sport 3 Comments
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Picture this:

A much loved national sports team, which hasn’t won a major tournament since the late 80s goes into the latest event as one of the favourites. The team, including many of the superstars of the game, easily win all of their pool matches before being bundled out in the quarter finals to a less fancied opponent. Their army of supporters, all dressed in the same colour, and all convinced that they are the greatest team in the world, struggles to come to terms with the result.

Russia 3, Netherlands 1 (after extra-time).

 

Niet te geloven 3-1 verloren…., by zilverbat.

I was in Amsterdam when the Netherlands lost to Portugal in the semi-finals of Euro 2004, so I can imagine what the atmosphere must be like there at the moment, after the loss to Russia this morning (NZ time).

Many of you can probably relate too, I suppose.

I’ve always maintained that the All Blacks are the rugby equivalent of Brazil, but given this result perhaps the Netherlands are a closer match?

Where the hell is Matt? (2008)

Published June 21, 2008 General 3 Comments
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Matt Harding is back with another amazing “Dancing” video which I think is even better than his previous efforts.  This time everybody gets a chance to do a silly dance:

http://www.youtube.com/watch?v=zlfKdbWwruY

Fantastic!

For those of you not familiar with Matt check out my previous post or the back story on his site.

If you enjoyed this, you might also enjoy “Running” by Pete & Charlie:

http://www.youtube.com/watch?v=VfZQX8XHSyU

UPDATE: there is now an HD version of “Dancing 2008″ available on Vimeo.

The trick to angel investment

Published June 20, 2008 Ventures 2 Comments

This cartoon from Hugh MacLeod at GapingVoid is a goodie:

I think there is a corollary which applies to investing in start-ups:

The trick to angel investment is to be smart enough to want to do it, but not smart enough to be objective about the true potential of the companies you invest in.

:-)

A selection of other GapingVoid cartoons from previous posts:

Features, Ease Of Use & Anti-gravity Machines

Published June 16, 2008 Software Development , Web Development 3 Comments

There is a curve that seems to apply to all software over time:

Features v Ease of Use

When you start you almost certainly don’t have enough features (and if you do, you probably launched too late)

So, adding features initially makes things easier for users - you’re able to support more user requirements with fewer work arounds.  The software continues to get better and better.

But, eventually features start to weigh the application down - more navigation, more options, more for new users to learn - until eventually you end up no better than a product with too few features.

What can you do?

It’s pretty simple. You need to either know when to stop adding features (which in practice probably means having a better system for prioritising your development work).

Or, failing that, an anti-gravity machine.

My other shirt

Published June 13, 2008 General 1 Comment
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Another great t-shirt:

Buy yours here: http://store.muledesign.com/featured/shitty-meeting.php

Previous great t-shirts:

Who’s using RSS?

Published June 12, 2008 Technology , Usability 6 Comments

The stats for this blog show that most readers are using a feed reader of some kind (predominantly Google Reader).

But, that’s not normal.

Matt Mullenweg has posted some stats across the entire WordPress universe of blogs for the month of May, and the numbers make interesting reading:

  • Active Blogs: 965,041
  • Page Views: 1,134,796,234
  • Page Views (in an RSS feed): 71,351,276

In other words, fewer than 7% of page views to WordPress blogs are via a feed reader.

I’m sure that number is much lower than most technical people would assume.  Not using a feed reader is so inefficient, eh, and who would be that silly?!

Don’t assume that everybody is like you.

Transparency

Published June 9, 2008 Technology 4 Comments

Should public data be available online?

The evidence would suggest that we can’t really make up our minds.

Three examples …

1. Electoral Roll

This includes the name and address of everybody who has enrolled to vote.

Anybody can view the details by going to a library or post shop. According to the Electoral Commission website this is “a part of the open democratic process of New Zealand”.

But, you can’t search online, other than to view your own details (if you make any changes they give you a page to print, sign and return).

While this could in theory be used to access others details (if you know their full name and birthdate) the site makes it clear that it is an offence to do that.

2. Motor Vehicle Register

This includes the name and address of everybody who owns a vehicle, indexed by number plate (presumably?)

Anybody can view these details for a specific vehicle by going to an LTSA agent and paying a small fee.

But, you can’t search online, or even submit a request online.

In 2006, following a story on Fair Go, the Minister of Transport announced that he was in favour of restricting access to this register for privacy reasons. This was welcomed by the Privacy Commissioner. I can’t tell if anything came of this or not (if somebody knows please add a comment below, or let me know and I’ll update this post).

3. Companies Office

This includes the name, home address and shareholding details of anybody who is a director or shareholder of a company.

For a number of years the Companies Office has been encouraging people to use their online services to register and update company details. As part of this they provide a full search facility, which allows anybody to look up any of the details they hold, including scanned copies of signed forms etc.

In the past there you had to pay a small fee to search the register, but now it is completely free.

I can’t imagine what the Privacy Commissioner thinks of that! :-)

Why the inconsistencies, I wonder?

Some questions…

Q: Is there a good reason for collecting the data in the first place?
Q: Should the data be available to the public?
Q: How do you stop this from being abused?

In each of these examples a big part of the reason for collecting the data is to make it available to other interested people. So, restricting access by only making the data available in printed form and only in certain locations - a.k.a. security by obscurity - doesn’t seem especially smart.

Likewise just publishing the database online for anybody and everybody to trawl through when they are bored seems to be out of line with the purpose of collecting and making the data available - it would be counter-productive if people decided to not submit information, or provide incorrect information, just to protect their own privacy.

I reckon that, provided it’s done smartly, making the data available online is actually the solution to the problem, not the cause.

The data should be available to anybody, but we should remove the anonymity of the person searching.

In order to search and view the data you should have to register and provide your own details (name and address etc - this could even be validated with a code sent in the mail if required), and every search should be logged and able to be queried. So, you can see my data. But, quid-pro-quo, I can also see that you’ve seen my data, and see your details.

I think a system like this could be self-regulating.

The public will be less likely to abuse the system, in the same way as employees who know their internet usage is being logged are unlikely to view dodgy websites. And, the authorities will be able to quickly identify suspicious usage, and track down the offenders.

What do you think?

Tell me why this wouldn’t work.

Tax Statement

Published June 8, 2008 General 8 Comments

Bernard linked to these spreadsheets on the Treasury website, which include the details of the spending allocated in the budget.

So using this and plugging in the basic income tax rates from the IRD site, I’ve put together this simple spreadsheet to implement the idea I mentioned here last week, breaking the total tax paid amount down by government department:

Tax Statement Generator

At the top are the usual suspects: Transport, Health and Education.  Towards the bottom some of the smaller and lesser known departments: Archives, Women’s Affairs, and the Serious Fraud Office.

By default it shows the breakdown for the average household income ($67,973 as at 30 June 2007, according to Statistics New Zealand).

If you like you can also download a copy and enter your own income at the top to see how much tax you paid and how it will be spent.

There are probably lots of things that I could add into this - for example, at the moment it doesn’t account for Kiwisaver, or Working For Families.  If somebody wants to have a hack at the underlying spreadsheet drop me a line and I’ll invite you in as an editor in Google Docs.

What do you think?  Surprised by the results?

Got Your Number

Published June 6, 2008 Business , Technology 6 Comments

When I was living in the UK they deregulated their equivalent of 018 directory services. Previously this was a monopoly run by BT. But, under the new model, there were a number of new companies started which each offered competing services, with a bunch of different business models. All of them had a short number that started with 118.

I wonder how many of these still survive today?

One of the “best” was 118-118. They had a fun and clever marketing campaign with two characters who looked like 70s middle distance runners (depending on who you believe they were “inspired” by either David Beford or Steve Prefontaine).

Here is one of the early ads:

http://www.youtube.com/watch?v=0Fdo6NupZsg

And a more recent one, which is a piss-take of this great Honda ad (an ad must be great when it has its own Wikipedia page, no?):

http://www.youtube.com/watch?v=Slh03uk88Ko

Their “Got Your Number” tag line definitely got stuck in my head, although I never used the service, so you could probably argue about whether all of this was actually successful or not.

Anyway, I suppose the lesson is there is always potential to do something interesting, even with a seemingly dry and personality-less business as directory services.

Here are two other interesting angles on the same business which I’ve seen in the last couple of weeks…

First, this comment from Charles on my “Using large data sets” post:

“I reckon one of the most interesting data sets Google are compiling is based on the free IVR directory service they’ve built for the US (Goog411).

They’re compiling a huge set of voice samples which must be a powerful way to train their speech recognition…which in turn could power the next generation of contextual advertising. Adsense for video is kinda hit and miss at the moment, but imagine if was as good as the targeting for regular site ads.”

That’s very cool if it’s true!

Then, this post from Josh Kopleman about 1-800-FREE-411 (a free directory service in the US) who have been polling their customers about political preferences. I’m not sure exactly how this works, but I’m assuming something like: free directory service, just tell us whether you prefer Hillary or Obama? Either way, as a result they have a poll with a much larger sample size than is typical.

As Josh says “It’s always neat to see new technologies used in unanticipated ways”

What other sleepy products or services could be shaken awake like this?

Valuecruncher

Published June 2, 2008 Business , Ventures 9 Comments
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Last week I asked: what is a share price?

How do you determine if a share price represents good value or not?

I got a bunch of different answers.

For example, this from Greg:

“Which shares to buy? I buy for different (often terrible!) reasons. Eg, I bought Telecom because I hated Telstra so much. Bad decision! I bought Apple because I like my Mac so much and noticed that Dick Smith and Noel Leeming were selling them. Good Decision!”

Finding companies you admire is a good start, although no matter how good the company is it doesn’t make sense to buy shares if they are currently overvalued by the market.

He went on to say:

“My feeling is, in general, you really have no idea whether its a good price or not. And no way of telling.”

Really? Surely there must?

Chad explained one approach:

“To use a simple calculation…If a company is making $1 million in earnings/profits today, and earnings are growing at 20% per annum. Then it’s pretty easy to work out what the company should be making after say 5 years:

$1,000,000 x 1.20…x1.20…x1.20…x1.20…x1.20 = $2,488,320

Thus, in five years the company should be worth:
Earnings $2,488,320 x 12 (times earnings) = $29,859,840″

That makes sense. But, how do you know if 12x is the correct earnings multiple to use? As we’ve seen this number can vary quite a lot depending on the company.

What all of this shows is that people often have an opinion on whether the share price of a given company is too low or too high – but they usually can’t explain “why?” let alone determine what the price should be in any structured way.

We’re hoping the change that, with a new website which we’ve been working on for the last few months: valuecruncher.com

Valuecruncher is a tool that allows anyone to find, create and share valuations for publicly listed companies.

Valuecruncher uses the same framework that is used by professionals: discounted cash flow analysis.

In simple terms this says a business is worth the present value of the cash that it will generate for shareholders into the future. To calculate these you start with the revenues a business generates and deduct all the costs associated with getting those revenues (including taxes and capital expenditures).

Up until now putting together the calculations and collecting the values you need to plug-into this sort of model has been too hard for most.

But, Valuecruncher is designed to make this accessible to everybody.

For a start the model is at your fingertips (complete with sexy graphs) - so there is no need to mess around with complex spreadsheets etc. It even give you a starting point for your valuation by automatically generating estimates for each of the key inputs. You can simply update these estimates with your own numbers and Valuecruncher will update the resulting valuation for you in real time.

You can also explore valuations saved by others, and drill into the assumptions that they have made around the future performance of the company.

As exciting as this all is, it’s just the beginning. We’ve started with the largest companies in the major world markets (S&P 500 in the US, FTSE 350 in the UK, the ASX 200 in Australia, the TSX Composite in Canada and the NZX 50 here in New Zealand). But, we’re hoping to soon extend this to a much wider set of public companies, including those in smaller markets which are typically overlooked by analysts.

And, there are lots of ideas for how we could use the tool we’ve created in other ways to help investors of all levels of experience.

But, before we get too far ahead of ourselves, we’d love for you to take a look, find some companies that you’re interested in (if you own some shares already that will be a good place to start) and save some valuations. And, then tell us: what do you think.

Some more information:

Some valuations that others have already created:

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