Category: Business

The Fallacy: Trump is a Successful Businessman

On By Norbert HauptIn Business, Political3 Comments

One of the most common arguments in favor of Trump I hear by all upstanding Americans who support him: He’s a successful business man, and America needs a successful business man for a president.

I call bullshit.

  • This argument is often made by people who have never run a business and therefore have no idea what it means to be a business man. In my opinion, running a country, being a statesman, is nothing like running a business.
  • Being a statesman you have to have class. Trump has no class. He is a boor.
  • Bill Gates is a successful business man, too. He’s not qualified to be president just because of it.
  • If being a successful business man is sole qualification, does that mean that the richest one is the most qualified? Of course not.
  • The Forbes list of billionaires includes heads of drug cartels. They are, by money standards, very rich. Does that qualify them to be president?
  • When you study Trump’s business success you find numerous occasions where he screwed the little man by not paying him for his services and by filing bankruptcy to get out of his overextended positions. Is that called success? Not in my book. It’s called being a con man.
  • I have been a business man all my life. I don’t have a building or airplane or helicopter with my name on it, but I also never screwed people out of their money, and I have never filed bankruptcy when things got tough. I believe I am a successful business man, but I don’t believe I am therefore qualified to be president.

Apple vs. the U.S. Government and the Second Amendment

On By Norbert HauptIn Business, Commentaries, Technology2 Comments

On April 1, 1976, almost exactly 40 years ago now, Steve Jobs and Steve Wozniak started Apple in the garage of Jobs’ parents.

Garage-Steve-Jobs

The garage has become a historic site and the center of tech mythology. Wozniak put some cold water on the mythology in his comments in this post.

Who would have thought at the time that 40 years hence, this little company would be the most valuable company on the planet, the icon of corporate America, and the company that would take on the U.S. government in a legal fight about encryption, and the U.S. public in understanding the subtleties of high tech and how it affects the war between good and evil?

Now some Americans vilify Apple for sympathizing with terrorists. Even Trump is trumpeting drivel about this. Apple has taken the fight to the public. My stand is fairly radical in favor of Apple.

Personal communications devices must be secure. To be secure they must be encrypted, and there can’t be any backdoors. Any software system that has any backdoors will automatically be open to anyone. Backdoors never work. All large government contracts our company holds explicitly disallow backdoors of any kind. Yes – “The Government,” our customers, require that there be no backdoor. However, here “The Government” is asking Apple to build a backdoor to 700 million iPhones it has sold over the years. It makes no sense.

Sorry, one investigation into a case of terrorism does not warrant exposing 700 million users to intrusion by “bad guys.” Let’s make no mistake about this: The bad guys will get ahold of the backdoor quicker than you can blink.

Let’s put this into the perspective of the infamous debate about the Second Amendment. Encryption of my devices is my only defense against bad guys with backdoors. I have a right to that encryption, just as I have a right to own a gun to protect myself against bad guys with guns.

Think of secure encryption as your only defense against bad guys with software that want to steal your stuff. And then you might see the very important point that Apple is making.

Apple knows what it is doing, and apparently “The Government” does not. Would I trust “The Government” with the key to my valuables?

NO!

Koch Industries and Renewable Energies

On By Norbert HauptIn Business, Energy, SustainabilityLeave a comment

The American Legislative Exchange Council (ALEC) is a Koch-backed conservative group that drafts bills, many of which are designed to repeal and weaken renewable energy laws and standards state-by-state. Republican politicians, who are funded by the Kochs, push these laws in their respective state legislatures.

— Ring of Fire

The Koch brothers built the world’s largest fortune based on oil, coal and the distribution, transportation, processing and sale of those commodities. In the last 30 years, Koch Industries expanded into many other areas, buying up hundreds of large and small failing companies and turning them around. One of the largest acquisitions was Georgia Pacific, that makes products like paper towels and such.

The Kochs have an uncanny formula for making companies work. Much of their business philosophy is based on libertarian principles, teachings and values. No government. Since the libertarian movement in this country had its peak around 1980 and have never flourished since, the Kochs have backed the Republican Party and its candidates as the closest fit.

The less government, the better. No government would be best. Let the free market take care of things. Supply and demand should be the only guiding principles.

With renewable energies, versus fossil fuels, the supply and demand principles didn’t work so well over the last 40 years. There were many government subsidies for oil, coal and gas, and Koch Industries has benefited from those. It stands to reason that they will try to squash efforts by the government against support of renewable energies.

When you start seeing massive lobbying efforts backed by fossil fuel interests, or conservative think tanks, or the Koch brothers pushing for new laws to roll back renewable energy standards or prevent new clean energy businesses from succeeding – that’s a problem.  That’s not the American way.  That’s not progress.  That’s not innovation.  That’s rent-seeking and trying to protect old ways of doing business and standing in the way of the future.

— President Obama

Fortunately, the tide has turned, and there are more and more people in the country who are genuinely interested in renewable energies. There are still forces that try to squash renewables, calling them job-killers, but they are consistently proven wrong. Here are some facts:

  1. No matter what we say about fossil fuels, they are limited. Perhaps we have a few decades’ worth left in the ground, perhaps a few centuries. But they will run out. Not planning for that time would be negligent.
  2. Renewable energies do not leave greenhouse gases. Whether greenhouse gases cause global warming or not, it is still better not to pump CO2 into the atmosphere.
  3. Renewable energies will return energy independence to countries. There will be less reliance on trade and therefore dependence on other countries. OPEC countries will suffer, but now is the time for them to retool, if they have the wisdom.
  4. As renewable energy becomes more used and cheaper, it will drop below the tipping point and it will become a massive local job creator. Preventing or delaying that for today’s profits, as the referenced article suggests, would be obstructionist and unacceptable.

Koch Industries knows how to make money and they are not shy about pushing their agenda. We need to take them very seriously. They are one of the most powerful forces in our government today.

But I do believe the tide has turned. Now how long will it take China to figure this out?

Musings about Vilifying Billionaires

On By Norbert HauptIn Business, Economy, Sustainability2 Comments

Bernie1

Bernie Sanders has been getting headlines and filling up stadiums of people with his message:

Let us wage a moral and political war against the billionaires and corporate leaders, on Wall Street and elsewhere, whose policies and greed are destroying the middle class of America.

Here is another quote:

Sanders, an independent, is seeking the Democratic nomination for president. On Saturday, the second day of a three-day Iowa swing, pointed out how FDR called the wealthy protectors of the status quo “economic royalists.”

“He said, ‘They hate my guts. Never have they hated someone as much as they hate me. And I welcome their hatred,’” Sanders said.

“And let me echo that today: If the Koch Brothers and the billionaire class hate my guts, I welcome their hatred. Because I am going to stand with working families.”

In a 1936 speech at Madison Square Garden, just days before his reelection, Roosevelt described his opposition as “the old enemies of peace: business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.”

“They are unanimous in their hate for me — and I welcome their hatred.”

— Des Moines Register

He is basically saying that billionaires are bad people, criminals, and financial and moral rapists of the middle class.

I call this whole line of thinking bullshit. Bernie may have some good ideas. I admire his zeal and energy, but he needs to drop this silly line of thinking because it makes no sense.

I am not a billionaire. I am not a millionaire. But I have been a business owner and job creator all my life. For the vast majority of my career, I was responsible for meeting payroll. I know a thing or two about business.

There are very few billionaires in the country. Forbes lists about 400 or so. The exact number does not matter. The fact is, they would all pretty much fit into one Boeing 747. It’s not a lot of people.

I have read the biographies of a number of billionaires, including several of Bill Gates, several of  Steve Jobs ( – by Isaacson), and one of Elon Musk ( – by Vance).  I have learned a thing or two about billionaires in the process.

I actually talked with Ted Waitt, the founder of Gateway 2000, at a CEO round table in San Diego. There were about 10 to 15 of us CEOs of local companies who invited business personalities on a monthly basis, and one time our guest was Ted Waitt. At the time he was worth about $1.4 billion. Ted talked about the days when he started Gateway in his family barn in Sioux City, South Dakota. He started the company on September 5, 1985 with a $10,000 loan secured by his grandmother.

On September 5, 1985, I was a computer programmer in San Diego, making $26,000 a year. I could have started a computer company in my garage. But I didn’t. Ted did. He talked about the early years trying to keep the company going. “Every morning we’d go to the mailbox and see what checks we received, and then the accountant and I would decide which bills to pay that day,” he said, and to every one of us CEOs in the room, that rang home loud and clear. Everyone who ever had to meet payroll has run out of money and has had to figure out how to make it past that. All too often, the solution came in form of a personal credit card in the owner’s wallet – or worse.

Ted Waitt didn’t become a billionaire because he ripped off people, stole from the middle class, or was greedy. He was successful because he provided a product (computers) at a time when the personal computer business was booming, and supplied that product at a fair price, with high quality, and with little overhead, since he pioneered the concept of mail-order computers (along with his rival Michael Dell at the time). He was eventually successful because we worked 18 hour days, 7 days a week, for years and years, and took enormous risks. He shipped millions of good computers. Our company bought all Gateway machines in the early years. He created thousands of high-paying jobs in – of all places – South Dakota, until he couldn’t fill the positions anymore, having pretty much employed everyone available within commuting distance. That’s when he moved the company to San Diego. Ted Waitt, through his sheer tenacity, brutally hard work, long hours, his creativity, vision, and leadership built a billion-dollar company, made himself fabulously wealthy (billionaire), made many of his partners and investors very wealthy, employed thousands of people, became a major industrial factor in Sioux City, South Dakota, and supplied good, solid computers, made in the USA, to millions of people for many years.

We don’t want to strike down people like Ted Waitt! We need more of them, many more of them, if the USA is to ever again be an industrial nation that creates and ships products all over the world.

I don’t need to talk much about Bill Gates, who has been the wealthiest person in America for some 25 years or more now. Gates, of course, heads off the billionaire class, and in my estimation he is one of the most brilliant business men of our entire generation. He has created an entire industry. He employed many thousands of people, now for more than 40 years. Many thousands of ex-Microsoft workers are millionaires now in their retirement. Microsoft still fuels our US economy. It’s one of the companies that still makes stuff right here and exports it all over the world. Microsoft is a major job creator.

Apple is the most valuable company on the planet, with today’s market cap at $661 billion. Steve Jobs became a billionaire many times over, not because he raped the middle class, but because he reinvented an entire host of industries single-handedly, including computers, movies (Pixar), music distribution (iTunes), cell phones (iPhone), and modern computing (iPad). It is reported that Apple is now working on a car. I guess it’ll be called the iCar?

Steve Jobs was a billionaire when he died too early. He, too, created good American jobs and industries that will fuel our national economy for decades to come. Apple is one of the most recognized brands on the planet. He founded the company on April 1, 1976. I remember that day, because on that very day I reported to military boot camp. Every soldier remembers that day vividly. Jobs built his company through relentless hard work, vision, persistence when everyone around him told him it could not be done. He ran several companies in parallel for years (Pixar, Apple). Apple would not exist without Jobs. There would be no Apple stores everywhere. We would not be using iPhones. Smart phones might look different entirely today if it hadn’t been for Apple’s creativity and leadership. Jobs was a billionaire, and he produced more value for the US than thousands of average workers combined.

Then there is Elon Musk, an immigrant from South Africa who arrived first in Canada as a teenager in the late 1980s with a few hundred dollars in his pocket. Eventually, he cofounded PayPal, and after it was sold, started Tesla, the electric car company, SpaceX, the rocket company, and he was heavily involved in SolarCity, the solar energy leasing company. With Tesla worth over $40 billion, and SpaceX still private, but estimated at more than $12 billion, Musk is a multi-billionaire and he got there by taking huge risks, working extremely hard for decades and having an outsized vision of what can be done.

Did you ever think it would be possible to start a brand-new car company? Or how about a rocket company that will compete with Russia and NASA? That’s exactly what Musk did, from scratch, in his garage, with his own money, that he made from writing code for PayPal – while the rest of us went to work every day at our jobs. Now he too employs thousands of people in several companies. Those companies are still growing and creating jobs in America, every day, every week, every month.

We need more people like Waitt, Gates, Jobs and Musk in this country, not less. Bernie Sanders does not know what he is talking about when he vilifies billionaires.

Granted, I just listed a few prominent ones here, but I could go on and on. Go and study up on the biographies of the wealthiest people in this country, and you’ll find that for the most part, they are the ones that have created opportunity, wealth and welfare by providing superior products for the US and the rest of the world.

So when I quote Sanders again from the top of this post:

Let us wage a moral and political war against the billionaires and corporate leaders, on Wall Street and elsewhere, whose policies and greed are destroying the middle class of America.

I can only say: what an idiotic statement!

Minimum Wage Hikes are a Terrible Idea

On By Norbert HauptIn Business, Commentaries, Education9 Comments

In 2013, the average Pizza Hut restaurant had revenue of $861,000. I just went to a Pizza Hut restaurant in New York State a few weeks ago, and my bill was about $24, tip not included. So if that restaurant served 100 people like me a day, it would add up to about $861,000 for the year. It all sounds reasonable.

A Pizza Hut restaurant is not much different from a McDonalds, or a Subway, or any other fast food restaurant. If they do more than a million dollars a year, it’s phenomenal. Most are struggling along. Many barely make it.

Having government raise the minimum wage from say $8 to $15, almost doubling the payroll, will surely put many restaurants out of business. Many are starting to add kiosks now so customers can order on a screen, without a human assisting. I have seen kiosks on tables at Olive Garden, I have ordered at a kiosk at Panera, and I recently saw that McDonalds is adding kiosks for customers.

Raising the minimum wage on restaurants for low-skilled or unskilled laborers is not solving the problem. We like to talk about everyone “deserving a living wage.” Those rich employers just have to make it work. Tell that to the owner of the Pizza Hut, who barely makes ends meet, and sometimes has loss years because he can’t get enough customers every day (remember, he needs a 100 every day of the year).

There are people with college degrees working as paramedics, firemen, teachers and yes, soldiers, who start out making $16 an hour. That’s what these jobs pay at the entry level. Compare that to the skill you need to flip a burger – something you can learn in a few days, and tell me again that everyone “deserves” $15 an hour.

It just does not work that way.

Forcing employers to pay higher wages to low-skilled employees inflates their costs and ends up with one of two results:

  1. They go out of business since they can’t make ends meet.
  2. They lay off staff or shorten their hours and bring in kiosks or other automation.

Both result in job loss. Fewer service jobs. More unemployment for low-skilled workers. More dependency on government handouts. Fewer jobs in the country. Higher prices for basic goods and services.

Raising the minimum wage for low-skilled workers sounds like a noble thing. After all, everyone “deserves a living wage.”

Nonsense.

Those that obtain an education and plan a career where workers are needed and therefore the pay is high will get that higher pay.

We have a terrible shortage of doctors, nurses, engineers, computer programmers, and many other professional careers that pay six figures each. Nobody deserves a living wage. The economy, the collective “all of us” are willing to pay doctors, nurses, engineers and computer programmers a lot of money because those jobs are hard, they are stressful, they have long hours, and they require many years of education.

The solution to our economic problems are not government subsidies, or regulatory interference. That never works. The solution to our problems is education.

But education is hard work.

Indefinite Pessimism

On By Norbert HauptIn Business, Economy, WisdomLeave a comment

August is coming up, and yes, Europeans go on vacation for a long time. Peter Thiel calls it “Europe’s famous vacation mania” in his book Zero to One, in the excerpt below:

Indefinite Pessimism

Every culture has a myth of decline from some golden age, and almost all peoples throughout history have been pessimists. Even today pessimism still dominates huge parts of the world. An indefinite pessimist looks out onto a bleak future, but he has no idea what to do about it. This describes Europe since the early 1970s, when the continent succumbed to undirected bureaucratic drift. Today the whole Eurozone is in slow-motion crisis, and nobody is in charge. The European Central Bank doesn’t stand for anything but improvisation: the U.S. Treasury prints “In God We Trust” on the dollar; the ECB might as well print “Kick the Can Down the Road” on the euro. Europeans just react to events as they happen and hope things don’t get worse. The indefinite pessimist can’t know whether the inevitable decline will be fast or slow, catastrophic or gradual. All he can do is wait for it to happen, so he might as well eat, drink, and be merry in the meantime: hence Europe’s famous vacation mania.

— Thiel, Peter; Masters, Blake (2014-09-16). Zero to One: Notes on Startups, or How to Build the Future (p. 63). The Crown Publishing Group. Kindle Edition.

I agree with him. I have sat in many a café in Germany and chatted with intellectuals, and the feeling of powerlessness when facing world affairs is overwhelming. Here is a nation that not so long ago wanted to rule the world and turned out to be one of the most aggressive of all, yet now it seems almost paralyzed.

But they all get many weeks of guaranteed paid vacation.

Vacation is an entitlement.

And that’s one of the reasons I am not there.

Book Review: Zero to One – by Peter Thiel

On By Norbert HauptIn Books, Business, Four StarsLeave a comment

Zero to One

A book about startup businesses.

Thiel knows something about the subject. He was one of the founders of PayPal and sold the company in 2004. His share was worth several hundred million dollars. Then he bought into Facebook as its first outside investor in 2004, and got a 10% share for $500,000. He then became a venture capitalist, investing in many tech companies and listening to proposals from entrepreneurs every day. He is worth over $2 billion, and his is only 47 years old.

So when Thiel writes about how to build a startup business, it pays to listen.

He is definitely not modest. The book is full of sweeping generalizations and questionable statements of fact that really are just his opinions. He dismisses any business that does not have the potential to become another Facebook or Google.

He says that real entrepreneurs dress in T-shirts and jeans, not suits. Obviously, that’s an opinion, not a fact. He does not know all real entrepreneurs. But he is so full of himself, and so convinced of his methods, that he states those opinions as facts.

Here is such a passage:

The most obvious clue was sartorial: cleantech executives were running around wearing suits and ties. This was a huge red flag, because real technologists wear T-shirts and jeans. So we instituted a blanket rule: pass on any company whose founders dressed up for pitch meetings. Maybe we still would have avoided these bad investments if we had taken the time to evaluate each company’s technology in detail. But the team insight— never invest in a tech CEO that wears a suit— got us to the truth a lot faster.

— Thiel, Peter; Masters, Blake (2014-09-16). Zero to One: Notes on Startups, or How to Build the Future (p. 160). The Crown Publishing Group. Kindle Edition.

This is just one example. But be that as it may, he knows something about startups. If you are working a job and you are happy doing it, don’t read this book. If you want to start a new Chinese take-out place in Palo Alto, definitely don’t read this book. It will crush you. If you want to start a lifestyle business, make a little money for yourself and your family, this book is not worth it.

But – if you want to start a company that makes a dent in the universe (to quote Steve Jobs), if your objective is to start a business that becomes a billion-dollar venture within a few years, this is absolutely, positively required reading.

Annoying, cocky, and maddeningly self-absorbed as Thiel is, he knows what to look for in a startup.

And if your dream is to start one, here you go – buy the book here. It’s the best $11.84 you will ever spend.

Rating - Four Stars

Conventional Utilities Don’t Like Rooftop Solar

On By Norbert HauptIn Bad Product, Business, EnergyLeave a comment
Time Solar
[Time Magazine: May 18, 2015, Page 16]

As more homes add solar panels to their roofs and make themselves more and more independent of the power grid, the conventional utility companies don’t like it. They argue that as less customers are relying on them, it becomes more and more expensive per customer to maintain the infrastructure, the grid, and they must charge their customers more.

The utility companies are simply facing the realities of a new world and new industry trends, like so many other companies before them. They will whine for a while, until somebody else comes in and builds a completely new business model and disrupts the entire stodgy utility industry. Welcome to the new reality.

Remember when local video stores where you could rent VHS videos for a day were in every strip mall? Then Blockbuster took over. And then Netflix wiped them all out.

The taxi industry is suffering from the likes of Uber and Lyft.

Remember when you still needed travel agents to book flights? Where have all the travel agents gone?

Remember DEC, the second largest computer company in the world in 1980? Bought by Compaq, which was bought by HP. DEC is only a distant memory.

Remember when Kodak was a giant? Then Kodak didn’t figure out that digital photography was disrupting their market until it was too late.

In the next few years, the power utility industry is going to experience some disruption. There is a fortune to be made for the right player.

Let me guess: the right player will not be one of the current utility companies. They are too busy whining and not busy enough thinking.

Book Review: How to Win at the Sport of Business – by Mark Cuban

On By Norbert HauptIn Books, Business, Four Stars1 Comment

How to Win

Anyone in business should read Mark Cuban’s book How to Win at the Sport of Business. Anyone in college should read it. Anyone who wants to be successful.

Anyone should read this book.

It’s a quick read, it’s a very short book. A good solid hour, or maybe two, gets the job done.

How did a young guy in Texas who lived in a friend’s three-bedroom apartment with six people with no education become worth 3 billion dollars?

Here is a rags to riches story that will inspire anyone. The book is a collection of blog posts, edited together into a coherent motivational shot in the arm.

You cannot afford not to read this little book full of nuggets of invaluable advice about business, life and passion. What more can I say than to give you a little excerpt:

When I was growing up I was told over and over again, if you can sell, you can always get a job. Of course, I was told that after a friend of my mom’s told me when I was in high school, that I should also have a trade to fall back on. He tried to teach me how to lay carpet. My first, last and only experience was working for him and watching him shake his head and rip out what I had done…. But I digress. I don’t remember who told me that selling was a job for a lifetime, but they were right. If you can sell, you can find a job in sports. I will take a high school dropout who is caring, involved and can sell over an MBA in sports management almost every time. What makes a good salesperson? Let me be clear that it’s not the person who can talk someone into anything. It’s not the hustler who is a smooth talker. The best salespeople are the ones who put themselves in their customer’s shoes and provide a solution that makes the customer happy.

Do not hesitate another second, go to Amazon and put down $2.99 and start reading and learning.

Rating - Four Stars

 

Facebook Ruminations and the Lack of Jobs in America

On By Norbert HauptIn Business, EconomyLeave a comment

Browsing the Forbes Magazine Special Issue Meet the Richest People on the Planet, I found Mark Zuckerberg with a fortune of $33.4 billion as number 16 on the list. Footnote: I just tried to get you a link to this article on-line. Forbes website sucks. It is choked with video ads to the point where you can’t find the content. Click on this link at your own risk.

As of today, Facebook’s market cap is $234 billion and rising. Facebook has about 7,000 employees according to Wikipedia.

How does a company that young, with comparatively few employees, have such immense value? 7,000 employees is VERY LITTLE for a company that large and valuable. For comparison, J.P. Morgan Chase has a market cap of $230 billion, about the same size as Facebook, but it has 63,000 employees worldwide. Both Target and Wal-Mart have over 300,000 employees each and have less market cap than Facebook.

Who are the job creators in this country? Well, it’s not Facebook.

I have “used” Facebook for many years, but I cannot say that I ever paid a penny for it. Ever.

The Facebook posts inserted in my feed are always ticklers with interesting headlines that have me clicking quite often to find out more, only to be redirected to some aggregator site that is so choked up with advertisements (I have seen pages with 20 ads within the user’s view) that the actual content is very hard to find. The sites are also so cumbersome and slow, it’s painful to navigate and it’s difficult to page through the content without accidentally hitting some advertisement. This is an example from today. Click on it and see what I mean.

In summary, the ads that Facebook leads me to are so annoying that I have conditioned myself to resist even clicking on content that looks vaguely interesting.

However, Facebook does have 1.3 billion users, 800 million of who log in every day. I am one of them. I check what’s going on with my friends. That takes about 5 minutes in the morning. I finish up clearing all my posts older than a few days – so my “wall” is usually empty, and I get out of there.

So how is it that something that creates so little stuff that can be sold, that really doesn’t CONSTRUCT or BUILD anything, creates such enormous wealth for its founders and owners?

The economy of the United States is built on companies like these now. They create value, but not a lot of jobs and really no “goods and services” that are pumped back into the economy. A few people and engineers in Silicon Valley get very rich, but the middle class across America does not get jobs out of those. Apple, by far the most valuable company on the planet by a factor of two, does most of its manufacturing overseas. Few jobs in America.

For America to be competitive, for the middle class to thrive, we have to “create jobs” here in this country. And unfortunately, it’s not something the politicians can do, no matter what the loud-talkers like Scott Walker, Mitt Romney and Jeb Bush trumpet.

I have spoken, and now on this sunny Saturday afternoon, I go back to work on the stuff I didn’t get done last week at the office.

 

The Birth of a Logo

On By Norbert HauptIn Business, Need to Know, Overnight Success2 Comments

In 1822, Rowland Hussey Macy was born on Nantucket Island, Massachusetts. At the age of 15 he hired on at the whaling ship Emily Morgan. As sailors often got tattoos, and still do today, Rowland had a red star tattooed on his hand. After he left whaling at age 21, between 1843 and 1855, he opened four retail dry goods stores to serve the mill industry employees of the Haverhill, Massachusetts area. All those stores failed, but he learned from his mistakes.

In 1858 he moved to New York City and established a new store named R.H Macy Dry Goods at Sixth Avenue on the corner of 14th Street in Manhattan. On the first day of business, his sales totaled $11.08.

The tattoo on his hand became the logo of his company.

Macys

 

Germany to Ban Email to Colleagues at Night

On By Norbert HauptIn Business, Crack-Ups, EconomyLeave a comment

 According to this article in Metro, Germany is planning on making emails to coworkers after 6pm illegal.

The advent of smartphones has allowed us to be plugged in and able to read work emails around the clock.

But research suggests that this is adding an extra five hours to the average office worker’s day.

That is why Germany is considering bringing in new laws that will make it illegal to email colleagues after 6pm.

The research, commissioned by the German minister for Labour, Andrea Nahles, also found a relationship between workers having constant access to their emails and poor mental health.

‘There is an undeniable relationship between constant availability and the increase of mental illness,’ Nahles told the Rheinische Post.

New legislation limiting worker’s access to their emails outside office hours could come into force in 2016, which would make Germany the first country in the world to pass such a law, although France passed a similar legislation this year requiring workers to turn off their smartphones after 6pm.

I grew up in Germany, a country that is proud of the fact that it controls what its people can and cannot do and when. For instance:

  • There is a law that controls when bakers can bake: Nachtbackverbot (prohibition of baking at night).
  • There is a law that controls when stores are open: Ladenschlußgesetz (law for closing stores)

Now the German government doesn’t like it that people email each other after normal business hours, and business hours being what the government determines they should be.

It is idiotic regulation like that, probably welcomed by a majority of the people, that hobbles industry, ensures that startups are just about impossible to succeed, squelches the entrepreneurial spirit and certainly results in Germany being ever more obscure and irrelevant on the world stage.

Rather than educating people to use technology wisely, the government plays Big Brother and tells people what can be done. If a person is stressed out about reading emails at night, why don’t they just stop reading? That would make too much sense. They rather demonize the writers. Bad, bad, productive, industrious workers!

Make no mistake about that: Brazil, India, Korea and China aren’t gagging their people and keeping them from emailing each other about work whenever it strikes their fancy. Those are the places where industry will boom, innovation will flourish and growth will abound in the coming century.

This is one of the main reasons why I am not a German anymore. It has always bothered me how the government controls everyone and everything, from when they can work, what they can do, who they can marry, what names they can give their children, and how they can modify their cars (they cannot).

I left early and have spent my life as an entrepreneur, something I could not have done in Germany.

By regulation like that, they are ensuring that the best, brightest and most driven continue to leave the country, for places that appreciate their contribution more, places like Silicon Valley, New York, and — Beijing.

Nice knowing you, Germany. I won’t email you after 6 pm. Do you feel better now?

Donald Sterling’s Stable

On By Norbert HauptIn Business, Commentaries, Feelings, Privacy1 Comment

Donald Sterling made racist remarks to his girlfriend in his own home. Critics of the media suggest that he has a right to privacy. He does. We all do.

But he should know that in today’s world, there is no privacy. Our phone calls are monitored and recorded by NSA goobers in cubicles in Virginia. We are constantly being photographed and video recorded. Recall the plethora of pictures showing the Boston Marathon bombers. The people we think are our friends may not really be our friends. Ask Mayor Ford of Toronto about that. And then, of course, there is the privacy bomb of all time: Remember Mitt Romney’s speech in Florida about the 47 percent? That one might have killed a presidential candidacy and changed history.

But it does not really matter. I have now heard what Donald Sterling thinks and how he feels about his team. I cannot “unhear” that.

He thinks of his team of basketball players no different from what a Polo rider thinks of his horses. They are animals that are making him money. He said himself that he pays them, so he feeds them, buys them clothes, cars, houses. Just like the Polo player has to stable and transport his horses, feed them, groom them, vaccinate them, and exercise and train them.

To Donald Sterling, those who have less money than he are simply accessories. That’s how the man thinks.

If I were a stallion in his stable, white or black, I would get out fast.

Apple and Corporate Responsibility

On By Norbert HauptIn Business, Climate Change, EconomyLeave a comment

Apple has been, for a while now, the most valuable company on the planet, with a market cap of $469 billion as of today. The next largest is Exxon/Mobil with $417 billion, followed by Google with $408 billion.

The National Center for Public Policy Research (NCPPR) is a conservative think tank based in Washington, D.C. and an Apple shareholder. At the company’s annual shareholder meeting, NCPPR’s general counsel Justin Danhof wrote in a statement before the meeting:

“We object to increased government control over company products and operations, and likewise mandatory environmental standards. This is something [Apple] should be actively fighting, not preparing surrender.”

Tim Cook, Apple’s CEO responded that environmental efforts also make economic sense. “We do a lot of things for reasons besides profit motive. We want to leave the world better than we found it.”

Anyone had a problem with that? They should sell their Apple shares.

“Get out of the stock,” Cook suggested.

Danhof’s proposal was voted down by shareholders.

Here is a company that takes no shit from pseudoscience promoters. Apple has a long way to go to clean up its act, but with this statement, my respect for Cook has just jumped up a few notches.

Facebook’s Astonishing Valuation of WhatsApp

On By Norbert HauptIn BusinessLeave a comment

WhatsAppFacebook just announced that they have purchased WhatsApp for 19 billion dollars. Yes, that’s 19 BILLION.

This must be the highest valuation for a company ever that I have never consciously heard of before. This is what WhatsApp does, based on their website:

WhatsApp Messenger is a cross-platform mobile messaging app which allows you to exchange messages without having to pay for SMS. WhatsApp Messenger is available for iPhone, BlackBerry, Android, Windows Phone and Nokia and yes, those phones can all message each other! Because WhatsApp Messenger uses the same internet data plan that you use for email and web browsing, there is no cost to message and stay in touch with your friends.

In addition to basic messaging WhatsApp users can create groups, send each other unlimited images, video and audio media messages.

I have used Viber, one of their competitors. It’s a good app for texting and free phone calls. When my son was overseas and didn’t have cell phone access, we used Viber to communicate, when he was in WiFi range. It cost nothing. We both just downloaded the app and off we went.

Looking at WhatsApp’s site, the main app, the text function, looks like an Apple iPhone messaging knock-off.

The company was founded only in 2009. Jan Koum, one of the cofounders, applied for jobs at Twitter and Facebook and didn’t get hired. They raised “only” 8 million dollars and now they have only 50 employees. Their app is free. They charge 99 cents per year for premium accounts. They seem to be more popular overseas than in the United States. Some of their installed base appears to be in India. They have 450 million users.

And there lies the secret: Facebook was not much interested in anything else but their user base, it seems. 450 million users is more than just about all other sites, except Facebook. This can certainly help cement Facebook’s power in the mobile space, and expand Facebook’s reach to more users, something they can’t just keep doing with their website after a certain saturation point.

If every one of their users were to pay the 99 cents annual fee (which will never happen), the company would have annual revenues of $450 million. This is not bad for a company with 50 people, not bad at all, but nowhere near justification for a 16 billion dollar valuation. Let’s put it into perspective with other companies and their market cap:

  • American Airlines: 12 billion
  • Harley Davidson: 14 billion
  • Nordstrom: 11 billion
  • Southwest Airlines: 14 billion
  • Xerox: 13 billion

This is naming just a few. These companies all have massive assets (airlines) and sell tangible goods or complex services,  and their valuations are all below WhatsApp.

Obviously, this is “bubble” value. WhatsApp is this valuable only to Facebook. Nobody else in the world would really know what to do with it.

However, the founders and employees of WhatsApp did a marvelous job to pull this off. I am impressed. Here was an interesting idea in an already fairly crowded market. They made a slick product for which there was a solid need, they focused on a very narrow mission, they kept their finances tight, and they built their user base.

Koum, one of the founders immigrated to the U.S. from the Ukraine as a child. The family made the early years work by relying on foodstamps. Koum is now a billionaire several times over.

Congrats to WhatsApp.