Archive for the ‘Business’ Category

I Own MySpace

July 23, 2006

Last fall I took a night Finance class through the University Extension program. The program is intended for young professionals who want some kind of continued business education. Most of the people in the class worked at Dell or Freescale or some place like that. The class had a stock investing project that has now led me to believe that I know enough to be dangerous.

Everyone in the class got an account with Investopedia.com and we were given $100k in Investopedia play-dollars with which to invest. Market orders were $20 and limit orders were $30. We were ranked in the class based on how much we grew our portfolio. In the end I finished second in the class growing my portfolio $16k in a little over 3 months time. The math is easy, that comes out to 16% growth. I became pretty fanatical about the project, checking my account everytime I got on a computer, DVRing and watching MadMoney religously, and setting up alerts to send text messages to my cell when stocks hit certain prices.

I made a good chunk of my change riding the Google wave but the rest was predominantly made short-selling which automatically classifies me as an AntiChrist in the eyes of many investors. Short selling is the opposite of long selling in that your are betting the stock will go down. For me it was easier to identify a shitty company than to identify a good company that will also be seen as a good company by other investors. So off I went short selling Blockbuster, GM, Ford, Dell, and a couple weird companies that nobody has heard of.

You may wonder why I don’t try to make real money trading stock. The majority of the money I have invested from my internships and what not are in a Mutual Fund. There are three reasons for this. 1) It takes a lot of work to buy and sell individual stock and to constantly monitor things 2) I am not convinced that the project wasn’t luck and 3) the fees are too high for my means. $20 and $30 fees for a $100k account is nothing. Fidelity charges me a $30 fee per transaction so a $300 purchase would have to grow 10% just to overcome the fee. The magnitude of the Investopedia account helped to dilute the fees on every transaction which was good bc I made tons and tons of transactions.

Fast forward to a couple of weeks ago (I tried to find a more confusing way to word that but I couldn’t). I was in the airport flying back from my Florida vacation and I saw a Wired Magazine with Rupert Murdoch on the cover. I had heard the name but I really didn’t know who the guy was. I picked up the mag and read the article right there in the store, I know a pretty schiesty thing to do, shoot me.
In short Rupert Murdoch is the man. He runs News Corp which owns Fox, Fox News, Fox Sports Net, the New York Post, and as of late MySpace. I was immediately a fan bc as most people know the reason Fox News and blogs are blowing up is because they provide an alternative to traditional liberal biased media. If you don’t believe in media bias whether it by East Coast bias or Liberal bias you really are just choicing what you want to believe.

When I got back to New York after looking into it a little bit more I bought some News Corp (NYSE: NWS). So now I can legitamately say I own MySpace granted I am in for a couple hundred bucks in a company that has a Market Cap of $18.3 Billion.

I decided News Corp has a bright future for a few reasons:

Fox News went from nonexistent to #1 in cable news in 5 years. You always got to love a good underdog overthrows the evil empire story ala Dell v IBM, Fox News v CNN, and about to be Google v Microsoft.

Fox has all 5 BCS bowl games this year. They have every World Series and All Star game through 2013. They’ll have the 2008 Super Bowl. They have the world’s most popular TV show in American Idol and above all they have atleast three more seasons of the greatness that is 24.

But the most important piece of their portfolio that sold me was the MySpace piece. Traditional media is at a crossroads although those selling points for Fox and FoxNews are better than what most have to offer. The marketing value in controlling MySpace will be huge. Lets say one company had the sole rights to sell advertising space on every roadway in the US? Well one company is approaching having something analogous to that in the virtual social networking world. And on top of that they have a real good idea, better than anyone else atleast, what types of cars are on those roads, who is driving, where they are driving, why they are driving, etc. You think companies would love to tap into that marketing knowledge? I do too.

This week I open a package from my dad. In it, a few cut out newspaper articles and a copy of the Rupert Murdoch Wired magazine. Again, great minds think alike.

-hj

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GE is my kind of company

July 10, 2006

I’ve been an intern at GE for almost two months now. I’ve met some great people, had some meaningful projects, and gotten to experience an area of the country that I hardly knew.

GE is my kind of company because they have a culture that embraces innovation, embraces change, embraces globalization, embraces Indian engineering, embraces Chinese manufacturing, embraces a coming of age 2 billion person customer base, embraces the digital age, embraces open source type technologies creating platforms for employee blogs, wikis, and forums, embraces DVR technologies creating advertising value that can only be experienced by those with DVRs (onesecondtheater.com), embraces the world’s toughest challenges being energy efficiency(turbines, wind power, and coal gassification), emissions reductions, and potable water creation(desalination plants).

GE embraces engineers which is good because they are going to be the ones that are going to solve global problems. The World is Flat discusses the ineffectiveness and lack of visionary US politicians because they are mostly lawyers and career politicians that don’t understand the problems and they certainly don’t understand how to solve them. They just know how to create laws that get in the way. Indian and Chinese governments are all engineers and that’s why they have accelerated so quickly through the industrialization process and thats why they will continue to do so. Just 4% of US college graduates walk away with engineering degrees as opposed to 20% in China. And thats 20% of a very large number compared to 4% of a relatively small number.

Green is the new red, white and blue. We have to get past the unwanted labels of liberal and tree-hugger and make it American. GE is doing their part and more companies will follow not because it is the nice thing to do but because there is an economic future in it. Its the smart thing to do.

-hj

This happens all the time

July 8, 2006

I feel like this happens all the time. People don’t understand business nor do they understand the democratizing power of choice so they panic, act selfishly and hypocritically, and run to the government for help. Most recently this overblown panic has been in the form of Net Neutrality. That may or may not ring a bell but either way it is important and could DRAMATICALLY change they way you use the internet.

I went nuts on YouTube one day and watched a few dozen YouTube videos of vblogs and TV shows debating Net Neutrality. Rocketboom’s vblog breaks down the issue best. I was pretty sure where I stode on the issue but after finding out Moby was spear-heading the campaign to legislate Net Neutrality I was positive I knew where I stood. Sometimes people can do a campaign a disservice by offering their support. For instance when Democrats support the cause of gay marriage it creates a knee jerk reaction because this is the same group whose morality supports partial birth abortions and assisted suicide.

For those of you too lazy to watch the videos Net Neutrality is the concept that the internet should be a place where people are free to go wherever they want, whenever they want essentially for no added price. Sounds to good to be true right? Well thats why TelComs are attempting to stick it to people by pushing to block certain sites, align with certain sites, and create bottlenecks to tax internet users. Do they have the right to do that? ABSOLUTELY!

The Internet does not just exist, companies had to invest money to make it work. They had to take risks and lay cable under neighborhoods and across oceans and do all kinds of things that most people do not appreciate. In the end the lines that connect my computer to yours is a business. However they want to procede in their operation of that connection is their business and they should be allowed to make that connection as uncomfortable as they want, its just bad business.

People are lazy and they would rather spend energy bitching and creating media to bitch then to exercise choice. Slavery ended nearly 150 years ago and we live in a free society, ACT LIKE IT. You do not have to have the internet and you do not have to use a certain company for your ISP.

See 99% of people look at issues like this and think ‘how does this affect me’ instead of ‘what is right’? How does it affect me? It sucks. It sucks big time. But that doesn’t make it right for me to demand the government take away a company’s rights to act as stupidly as they want. See the main reason I don’t think this is really an issue at all is say Washington allows TeleComs to tax and screen the internet. All that means is someone is going to get rich. VERY RICH. Because a handful of entrepreneurs will wet their pants and will work day and night to create the newest truly neutral network that enables internet users like we are accustomed. And then the choice will not be a choice at all.

Last year I saw this very same thing happen in Austin except the government did step in and stick it to the businesses. Austin was debating passing a law to outlaw smoking in bars and restaraunts. I thought this was totally bogus. If I had invested however much money for a primo spot on Sixth Street to set up a bar and I want to allow people to perform an act that is perfectly legal as long as they are of age then I should be able to do that. What was most hypocritical was that they didn’t outlaw drinking. I am not sure that anyone has been killed by a driver under the influence of a cigarette. All of that on top of the fact that Austin is a grunge hippie city and while that is not my thing I respect that.

So the people won and smoking is out. Its weird because I hate being around smokers so in that regard it is a dream come true. But was it the right thing to do? ABSOLUTELY NOT! Why should I demand to have rights in a private establishment? If I walked in to your house and told you that I didn’t like having the TV on MTV because it was bad for my health because it makes my blood pressure rise you could/should tell me to get lost.

If you don’t like that a bar is too smokey I have a great solution for you. DON’T GO. Exercise your choice to go to bars that aren’t smokey and guess what people will recognize that. If smoking is such an issue that it drives people away then there would be a market for bars that don’t allow smoking.

Things will work out in the long run if you exercise choice but the last thing we need is more government.

-hj

Innovation=Juice

June 25, 2006

The other day I discovered a list that I wanted to see for a while now even though I didn’t even know it existed. That list was Business Week’s ranking of the 100 most innovative companies in the world. That list is important to me because innovation is what gives me juice. Outside-the-box type ideas that break rules are what get me going.

 

By Business Week’s measure Apple is the most innovative company in the world. My experiences with iTunes and other people’s iPods in combination with their new commercials are making me seriously consider making a Mac my next computer. The reasons not to? I haven’t used Macs before. Weak. They are different. Weak. I can’t think of a legit reason. iTunes and iPods are so Googleesque(who finished 2 by the way) in that they are so sleek, simple, and yet powerful.

The rest of the top ten went 3M, Toyota, Microsoft, General Electric, Proctor & Gamble, Nokia, Starbucks, and IBM. The past two summers I have worked in the oil industry and this summer I am at General Electric. I can testify that it is a complete 180 degree difference in working for one of the top innovative companies as opposed to working in an industry with only one company BP (41) in the top 50.

I broke the top 50 companies down by industry to see if there were any trends there. Automotive, computer software, and telecommunications tied for the most with 5 each, retail had 4, and computer hardware had 3. Most all the companies are household names. The ones in the top 50 I didn’t recognize were IDEO, Research in Motion (they make the Blackberries but I didn’t know them by that name), Ryanair, Tesco, Danone, WL Gore & Associates, and Bang & Olufsen.

To me this list is more important in deciding a company to work for than an Forbes 500 list or list sorted by revenue or profit.

-hj

Oil Mythbusters

May 28, 2006

Today there was a great article in the Dallas Morning News about the realities of our gas prices, oil company profits, service station boycotts, price gouging, and the realities of taxing oil profits. I realize the blog I wrote about these same subjects may have been too long to hold people's attention. This article explains almost to a T exactly what I was trying to say and does so in a much more eloquent manner. I'm not sure if you need to sign up for a free membership to view that article but if you do I can assure you that won't spam you and it'll only take a second.

What I most do not understand is the arguments of price gouging and the argument to tax the profits harder than usual(40%). These are two issues that I did not talk about to the extent that I wanted to in the previous blog.

In the instance of Katrina I understand punishing a company for using the economic laws of supply and demand in a way that really hurts people that are in an unusually vulnerable position. But in everyday normal circumstances what exactly is price gouging? Is it businessmen working for oil companies trying as hard as they can to make money for their shareholders? In the sport of business money is how you keep score thats just the reality of the situation. Businesses are not in business for fun or just to keep themselves occupied. They are in business to turn a profit plain and simple. Oil companies just happen to be in an industry that sells a product that Americans are addicted to and have been led to believe it is their God-given right that they have access to cheap oil and its derivatives. High schools economics teachers: stop letting your students sleep through your class. Its simple Supply and Demand. If you have something that is becoming more and more in demand you are going to be able to rise the price and turn a better profit, you would be stupid not to.

The second issue concerns taxing oil companies harder than normal. In my previous blog I got into how much more profitable most other industries are in terms of profit margins. That defines more why this taxing is unfair but now I will get more into why it's not only unfair but it doesn't make sense and it will end up making oil more expensive in the long run. Lets take ExxonMobil for instance, last year they brought in profits of $36 billion. The first place that profit is going to go is to the shareholders in the form of dividends. The shareholders are the ones who risked their money to make this possible in the first place. At the end of the day the money that is left over is invested in research and development (read future ways to extract tons more oil efficiently). If you tax that profit harder the shareholders are still going to get paid either way its the R&D that you are hurting. But it makes politicians popular to promise middle-class voters added tax revenue from ugly, mean, Texas-sized oil companies and this is an election year so it'll probably happen.

-hj

Oil and ExxonMobil

May 15, 2006

I recently was emailed a chain-letter attempting to organize a boycott of ExxonMobil gas stations in an attempt to bring down the price of gas. About a week later I ran across a Story on the Drudge Report of a Judge in Bee County, Texas who was trying to rally support for a county wide boycott of ExxonMobil. I am embarassed for this people because they simply have not done their homework. These boycotts will not work nor have they worked in the past and I think the hope that they will work are rooted in some misnomers in the averge person's understanding of how the Oil industry works. (more…)

Pandora.com

May 1, 2006

Pandora.com is the new biggest thing you can tell everyone you heard it here first. Pandora.com is going to be bigger than Napster, bigger than Kazaa, this is going to be huge. Last week my brother sent me an email about a website that allows you to create your own radio station. I looked into it and what I discovered was the smartest innovation I have seen in a long time. (more…)

Bloggerific Irony

April 10, 2006

In previous blogs I have mentioned how I am a huge fan of Mark Cuban, billionaire founder of Broadcast.com and current owner of the Dallas Mavericks. I read his blog pretty religiously. Everytime I get on a computer, which is probably on average 7 or 8 times a day, I instinctively check a list of websites. My gmail, the Dallas Morning News, the SportSay blog, ESPN.com, CNN.com, Drudgereport.com, Facebook.com, and of course Mark Cuban's blog BlogMaverick.com.

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DVR, TiVo and the future of TV

March 22, 2006

At the beginning of the fall semester I decided it was time I had to get a DVR. My roomate and I split the cost which is a whooping $7/month. It has probably been the best investment I have ever made and I will never be able to live without one again. My parents have satellite and they get free PVR with their service, basically the same thing. That is where I first learned about it while living at home during breaks. I am not going to try and sell you on its greatness. If you don't already know you will soon enough.

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Texas Football Program Revenue

February 21, 2006

Ironically enough after I wrote that blog about Mack Brown's salary bump ESPN The Magazine ran a story detailing the amount of money college athletic programs bring. My claim that the athletic department brings in over $80 million is probably a bit high. According to the story last year the Texas football program brought in the most revenue and was also the most profitable bringing in $53.2 million in revenue of which $38.7 million was profit. While I knew the revenue was in that ballpark I didn't think the profit was anywhere near that high. Again, going back to Mack's salary of less than $3 million dollars. The greatest ambassador to our university comes in and turns a profit of $38.7 million dollars and people bitch that he gets $2.5 million. I find that humorous.

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“Way over Paid” Mack Brown

February 6, 2006

After some bad headlines I want to set the record straight and voice some of my opinions. The Daily Texan's headline read 'Mack Brown gets $2.5 million dollar raise'. That is not accurate and this may seem tedious but I think that is very misleading. He received a raise and NOW his salary is $2.5 million. Getting a $300,000 raise to increase your salary from $2.2 million to $2.5 million is much different then getting a $2.5 million dollar raise. If that were the case he would now make $4.7 million and he would be the highest paid coach at the college level.

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Update: Back to my old ways

January 31, 2006

Back in April I blogged about my SIOC eBay business. For those that didn't read it basically I sold the free Sports Illustrated on Campus' that come in the school newspaper on eBay. Well that business came and went. They don't put them out over the summer (I was in Houston anyways), and when I got back all excited to get things popping again they decided to only put them in the bin in front of Gregory Gym. I decided to scrap the whole project and move on. It was no longer worth the effort although it risk free.

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Redbox: The Attack on Blockbuster

August 2, 2005

Earlier this summer I was walking into a McDonalds for lunch and I noticed a huge red box, sort of like a vending machine, just to the side of the door as you walk in. It advertises itself as renting DVDs at $1/day. It looked pretty shady at first but the more I looked into it the more ingenious I realized it was.

The way it works is you scan your credit card or debit card. From a touch screen you select a DVD from a list of 40 new releases that gets updated every Tuesday. You can select as many as you want. If you return it by 10pm the next day the cost is a whooping $1+tax. You pay a dollar a day plus tax for every day you keep it up to 25 days at which point you have bought yourself a $25 DVD. Once you return the movie the box emails you a receipt and charges your card.

If you are like me when you go to rent a movie it’s because you are planning on watching it that night. By the next day it has already served its purpose so the 3 or 5 day rental they charge you more for is all for not. Or say you do plan to keep it for 3 days. Find me a Blockbuster, Hollywood Video, etc where you can get a 3 day new release rental for 3 bucks. Another convenience is, unlike Blockbuster, you can return it to any Redbox location.

All of this out of an automated box. It's open 24 hours a day, all the costs of employee's wages, benefits, etc do not drive up the cost bc they don't exist. Redbox started last summer in Denver. They setup 105 locations around the city almost exclusively outside McDonalds. In less than 6 months they rented 1.7 million DVDs. 105 locations… 1.7 million DVDs. That’s impressive. That all started last June. Here we are its August 2005 and they have 1,200 locations across the country. They've grown 10 fold and expanded to 7 cities stretching coast to coast in one year.

So I started looking into the cities where they expanded. Vegas, Hartford and D.C. have a total of 37 between them. On the other hand Salt Lake City, Houston, and Minneapolis all now have hundreds. I found it weird they chose these cities. No New York, Chicago, Los Angeles, Dallas, Miami, Boston, etc. Hartford, Connecticut? I don't get it.

So then I start thinking it obviously has little to do with the city's population. I have narrowed it down to two factors. Factor #1 fat cities. Houston for the 4th time in the past 5 years was named the fattest city in the US. I have to believe there is a strong correlation between a fat city and the amount of traffic the average McDonalds gets. Factor #2 movie watching (renting) cities. I can't find any rankings as far as what cities rent the most movies but would it shock you that people in Minnesota rent and watch a lot of movies during those killer winters?

What I'm thinking is they chose cities and locations where they can make the quickest return on the investment they made in buying all the equipment that goes into the redbox and all the DVDs. That way the will be able to continue to grow quickly and won't run into cash problems.

My next question is who is paying who. Does Redbox pay McDonalds to set up shop on their property so they can take advantage of the customers the golden arches bring in? Or is it McDonalds who pays Redbox because every time a Redbox is installed outside the number of Big Macs they sell notches up? I am willing to bet it's Redbox who is shelling out the cash but if this idea really explodes maybe that should be reversed or at least an equal partnership should form.

Once upon a time it was Blockbuster who had the innovative business model and ran the movie rental industry. Ironically, it will be the innovative business models of Netflix and Redbox that run them out of town.

hj

Cars for the future

May 2, 2005

In my engineering communications class I recently saw a presentation about hybrid cars. As the owner of a gas guzzling V8 SUV I will not try to convince anyone that I am overly worried about the environmental impact of our cars. However, I do find these hybrid cars very interesting from an engineering and economic perspective and I do believe that alternative energy cars are the future of the automotive industry.

His presentation was more concerned with the environmental impact of our increasing energy demands in the transportation sector. One of his solutions was to create a gas tax similar to those already in place in Europe that would double or triple the price of gas. At the price gas is currently at there is not an economic incentive to buy hybrid cars. Sure you get more miles to the gallon but hybrids on the average cost $3,000 more. Even if you drive 100,000 miles you will not make that back in saved gas money. However, if pump prices go up that closes the gap on the time it takes to recover that $3,000 investment.

This all sounds good in theory and my Business Law professor sent us an email earlier in the semester with a very similar solution. This plan is of good intentions but I don't believe it would work for practical purposes.

First, this administration could never implement a policy like this for two reasons. One, they are committed to providing people tax relief and this would be a hypocritical step backwards. Two, Bush is already viewed as not being sensitive enough to the needs of low to middle income families and doubling or tripling the price of gas would cream them. Not all people have the ability to go out and buy a new hybrid car just because legislation passed to make it nearly impossible to drive their current car. Yea, sure, they could take the bus but many cities in this country, and nearly all rural areas, do not have the setup to make this practical. There is a certain amount of freedom in owning a car and forcing people to ride the bus rids them of that.

Second, how would you implement this tax increase? Would it be a one time jump from currently around $2 to $4 or $6? Or would it be a gradual increase that would occur over time?

Again, the sudden jump would not only cream the low to middle income families but also the Automotive and Oil companies. Yes, car companies are slowly making the move to hybrid but the key word there is SLOWLY. The sudden jump would cause the small supply of hybrids out there to cost through the roof. The demand for regular cars currently in the development stages, release stages, and the thousands sitting around in lots waiting to be sold would take a huge hit. The tax increase on gas would most obviously hit oil companies the hardest. Two thirds of petroleum use is in transportation. The oil industry is the biggest industry in this country and in a recovering economy a hard hit to needy area is the last thing we need. Cutting jobs and revenues in oil and gas companies is not the answer.

So the best solution is a gradual tax increase on the price of gas, right? According to the presentation the average fuel economy of cars increased from 14.1 mpg in 1979 to 21.5 mpg in 1997. Since 1997 fuel economy has slowly declined to 20.8 mpg. From 1997 the average gas price increased from $1.16 to $1.89 in 2003 and on to the over two dollars now. Car companies are smart and they have been in business for a long time. They are going to give the consumers what they want. Since gas prices began skyrocketing the fuel efficiency of cars has gradually decreased and demand for inefficient SUV's has gone through the roof. Half of new cars bought now are SUV's. What this means to me is that slowly increasing prices at the pump do not make gas efficiency the determining factor in what car they buy. I don't see a slow tax increase changing buying habits unless they came out and said we will be gradually taxing gas until the cost is X by Y year. In this case people would have a time frame and could see where the prices were going. But, similar to the sudden increase, there would be a lot of public outcry against this and it would be political suicide for the politicians involved.

At the beginning I said I believed hybrid cars were the future. This conclusion is not as a result of the threat of a hands-on taxing program that expands the role of government in our every day lives. I believe this because hybrid cars are getting smarter. Honda did a disservice to all proponents of alternative fuel cars. They came out with the Honda Insight, which was one of the first hybrids on the road. The reason I call it a disservice: the car was WEIRD (http://www.automobilemetro.com/2004/honda-insight.jpg). When people envisioned hybrid cars they envisioned people driving ugly tiny spaceship looking cars with the rear wheel half covered.

I read in Car and Driver that last year 40,000 hybrids sold and next year it will be around 90,000. The reason… hybrids are cool now. Not the hybrid under-the-hood part, but the looks part. They are coming out with normal looking cool cars in hybrid version. The Accord and many other sedans have hybrids. More importantly to me and many other car consumers, they now have hybrid SUVs. The Ford Escape, Lexus RX, even Chevy's Silverado have hybrids. The hybrid Tahoe comes out in 2007 and two other SUV hybrids are coming out next year. These hybrids will sell not because of gas prices but because they are cool cars that perform better. These hybrids provide better horsepower, better 0-60, better handling because of the weight of the battery in the floor board, better range(read less frequent fill ups), and most obviously better miles per gallon. A friend of mine, Mechanical Engineer, who graduated last May helped develop regenerative braking as part of his senior design project. This system uses the resistance provided by coiling the motor to brake and in turn braking charges the battery. Capturing this energy to use later is much more efficient than just lossing it to heat loss. Oh yea, one other tidbit about hybrids, they have better city mpg than highway.

Hold off on your tax hikes the revolution of the automotive industry will be here soon enough.

hj

eBay and Free Stuff

April 20, 2005

In my previous blog I talked about how I was a big fan of the Google business model (i.e. provide a free service that creates a high traffic community and make your dollar off advertising fees collected from big companies). This model has been proven to work over time by Network Television and Radio. Beyond that not many businesses have exploited this theory until late. Now Google, Facebook, News Sites (CNN.com, ESPN.com, etc), Message Boards, AIM, and others have provided free services using the internet to exploit advertising.

I discovered a different model over Christmas Break while on eBay searching for Rose Bowl Champs memorabilia. In my search I came across an Austin American Statesman Newspaper with a full front page photo of Cedric Benson and Derrick Johnson on the field after the game with confetti falling from the sky. The bid for the paper was at $15 with a day or two remaining. I thought this was ingenious, taking something that you can get for free or that you normally would just throw away after using and sell it on eBay. It sounds simple because it is simple but it can prove to be very profitable.

After coming back to school, I started thinking about what kind of free things or things I would normally use and throw away that other people would potentially buy. About 70 universities across the country get Sports Illustrated On Campus, which is a small Sports Illustrated focusing primarily on college sports. The magazine comes free in the University student newspaper ever Thursday. My idea was to go to newspaper stands on Thursday nights and collect all the left over SIOCs and sell them on eBay. Since they are rare and only available to college students, many people such as alumni of a particular school that may be featured on the cover who have no way of getting the magazine will bid for them on eBay.

Over the past couple years I had bought a handful of things on eBay, mainly vintage Sports Illustrateds that featured University of Texas on the cover, but I really overestimated the difficulty in setting up an auction and selling. I started the bidding at $1.99 plus $2 shipping and handling and stole a lot of the formatting techniques from other magazine auctions. Now a $3 or $4 sale may sound petty but it took such little work and there was no expense for the magazines so it was 100% profit.

Fast forward a couple months. The bang hit the night of the UNC-Illinois National Championship. I was definitely cheering for the Illini because I have two family friends that are Illini alumni and I felt they proved they were the best team in the country throughout the regular season and Big Ten tournament. Fortunately, they lost and my little eBay business took off. Sometime in February the SIOC cover featured the Duke-UNC mascots on the cover proclaiming the rivalry the best in college basketball. Apparently that goofy billy goat in a Tar Heals Jersey on the cover of a SIOC is the hottest commodity in the state of North Carolina. Usually I post a bid every 3 days but with magazines selling for anywhere between $12-$20 a piece I started listing them so that one would end every day. In the 7 days after their national championship win I sold 9 magazines (a few were on second chance offers to losing bidders). Another magazine featuring Lebron on the cover also picked up steam during the tournament though not at the same rate as the UNC cover.

Once I started selling on eBay my mindset became very different. Now when I see free handouts at basketball and baseball games or in the newspaper or anytime I go to throw something away instead I have a different train of thought. Usually I would think I read this or used this and I no longer have a use for it so I will just trash it, but now the thinking is I may no longer want this but does somebody else. If somebody else wants it than it very well could potentially be profitable and therefore is worth picking up or keeping or whatever.

For those of you who go to schools who get SIOCs you're probably thinking why would someone reveal this idea when someone else could so easily repeat the same thing. And you'd be absolutely right; anyone could do this same thing and cut my bids in half. But I see two reasons why this wouldn't happen. First, that would be shady but hey who cares. Second, its not just good ideas that bring in the money. People have good ideas all the time but its the initiative to bring the ideas to reality that makes or breaks the project.

One a side note, Cuban had another very interesting blog about the approaching death of the PC era. Check it out blogmaverick.com

"The secret of getting ahead is getting started"

hj

GOOGLE is the shit

April 12, 2005

Over Christmas break I watched a special on Larry Page and Sergey Brin, the creators of Google, on I believe it was 60 minutes. For those of you who don't know Google began as a research project in the 90s when Page and Brin were Ph.D. candidates at Stanford. They both dropped out of school to start Google which is now worth $50 Billion in stock and Page and Brin are worth $7.2 Billion each. They clearly have a monopoly on search satisfying an estimated 80% of search requests everyday. Bill Gates and his Microsoft empire recently declared war on them after losing an attempt to buy them out and now has released his own version of MSN search.

The fact that two 31 year old guys, who look like they could still be in school, are knocking heads with the richest man in the history of the planet instantly brings them a certain factor of likeability. Their dedication to innovation is awesome and their business model is very 'consumer' friendly.

I say it is consumer friendly because all of their 'products' search, news, and email are free to use. They do not make their dough off the average Joe, rather they create incredibly useful tools that create tons of traffic. Where there is tons of traffic big dollar corporations will pay to be. So essentially, the people get state of the art technology for free and Google floats the bill to the Big Wig Corporations.

Since dominating search they have continued to grow with things like Google News (news.google.com) which keeps an up to the minute page of news sources around the web and automatically arranges them to present the most relevant news first in an objective neutral way. In a day when it seems all of our news is being spun to satisfy the bias of the broadcaster this becomes a very valuable resource.

They also have broken into email in a big way with Gmail. They give you over 2 gigabytes of storage which is the best among free email accounts to my knowledge.

They have promised a future in Text Messaging offering countless amounts of information anywhere your phone can travel. Soon you will be able to get up to the second Stock prices off the ticker by TMing 46645(GOOGL) with the ticker symbol.

But their coolest technology yet which they released last Monday is Google Maps (maps.google.com). Google bought Keyhole who owns the rights to Satellite photographs of EVERYWHERE in the United States. This thing is the coolest toy ever. I could spend an entire day thinking of places in the US to view. The default for everyone is your home address. After a quick search and a couple seconds of orienting yourself and zooming in you can find a birds eye view of your house from what seems like a few hundred feet. Baseball and Football stadiums look badass.

Google hopes to update the images so that all areas will have an image taken in the past 6 months. And its not only satellite maps, they also do directions and their search is much more advanced than any other.

Move over Mapquest, the Google boys are coming through.

hj

Great Minds Think Alike

April 6, 2005

I recently started reading Mark Cuban's blog at http://www.blogmaverick.com and it inspired me to start one of my own. For those of you who don't know, and shame on all of you, Mark Cuban is the owner of the Dallas Mavericks who made his billions creating broadcast.com which he later sold to yahoo. He is one of the most innovative and hard working business men around and he has a great sense of humor and keeps things fun. What makes him so cool is that he is not cool at all. He is a 12 year old kid who is a huge basketball fan. He is living a fans dream acting as owner of the Dallas Mavericks passing up the box suite for a Nowitski jersey and some seats behind the basket.

The first blog of his that caught my eye was titled The Sport of Business which, if you have aspirations to be successful in business, is Lombardi-esque. The next couple of blogs that I found interesting have ties to one of my previous rants concerning the music industry and the lack of innovation and hustle on the part of the RIAA and record labels.

His first assertion is that the music industry has missed the buck on the Internet explosion and digital file sharing. He brings to the forefront that in recent times DVDs, digital photography, video games, software, and ring tones, all 5 digital based products, have experienced huge increases in sales while the music industry has sat around with their thumbs up their asses busy filing a bunch of lawsuits. Sales have dropped nearly 15% from 1999 to 2004.

His second assertion is about the rapidly approaching extinction of CDs. In my opinion the industry's stubborn commitment to selling a single product that composes an album of music, whether that be a record, tape, or CD, is where they missed the point. Just now are internet music sales via iTunes and Connect Music Store moving into the main stream. When you walk across campus or go to the gym how often do you see people carrying around portable cd players? How long could you go doing these same things WITHOUT seeing someone with an iPod or some other mp3 player? Then why do music companies insist on selling CDs? In the very near future most music listening will be done on a computer, mp3 player, phone, PSP, PDA, whatever. Digital music players are rapidly making their way into our home and car stereos.

Cuban tells a story about being on a Mavs roadtrip and walking through a mall with his iPod and craving a song from the KillBill soundtrack and having absolutely no means of buying that song. He claims, and I very much agree, that the first label to come to grips with reality will see sales and profits go through the roof. The first to setup kiasks and digital music stores where people can come plug in their mp3 players and flash drives and instantly buy songs from a hard drive with a few terabytes of space containing every song ever created. Setting up laptops at concerts where people can plug in and buy an entire CD for $5.

"It's money in the bank"

hj

The Bone Headedness of the Music Industry

January 15, 2004

Ok, let me start by saying that my knowledge and interest in the music industry is very minimal. However, I do not believe that this industry is as complicated as it appears to be and to put it bluntly I feel that they got what they deserved in a sense by getting creamed by the current mp3 downloading frenzy.

First off let me say that I do believe that downloading music is stealing just as recording songs off that radio onto a tape was stealing previous to the development of digital music. That being said I will admit that I currently have over 1,800 mp3s on my computer.

In my opinion the artists and recording industry more importantly got what they deserved when they lost millions to the invention of peer-to-peer (P2P) networks such as Napster, Kazaa, WinMX, etc. The reason: they were not cutting edge and they refused to adapt. Basically all they have down is bitch, moan, protest, form alliances, and file lawsuit upon lawsuit to try to fix the problem. They should have seen this coming. Ever since the Internet boom of the late 90s everyone and their dog started to noticed how quickly digital information can be shared and transmitted. How long did they think it was going to be before their digitally recorded music recorded to CDs was spreading like wild fire for FREE? Right now the intrinsic value of buying a CD rather than just downloading all the songs on a CD is very minimal. The movie industry was much smarter. First off DVDs cannot be ripped near as easily as CDs can. Second, buying a DVD has more intrinsic value than downloading it because most DVDs these days come with a second disc of outtakes, the storyline of producing the movie, interviews, etc.

I consider myself an optimist and I always try to make the best of a situation. If I was an artist I would have adapted by saying screw the recording industry. I would have seen that this incredible spread of free digital music could be used to my advantage. These artists claim they lost millions due to this piracy, right? Well why not invest a few thousand dollars on a room full of CPUs that all have internet access and have every Kazaa, Napster, WinMX known to man. And these CPUs would have every one of your songs and various versions and remixes of your song open to easy FREE downloading. The point is you open up your music to free downloading and it spreads like wild fire. Bingo, free exposure and promotion of your music. Now the key is to alter your business model. You make your coin off tours, appearances, posters, autograph sessions, T-shirts, clothing lines, acting in movies, starring in TV shows, and you forget about record sales. The Recording Industry is a scam. They just wait till someone blows up, they get them to sign a contract, and then they take an enormous cut of the profits. Screw that, if I was doing all the work but just getting a cut I would find a way to cut them out of the loop.

Rappers have caught onto this idea somewhat. Ludacris, Eminem, Snoop Dogg, DMX, and Ja Rule have all appeared or starred in Movies such as Fast and Furious, 2 Fast 2 Furious, 8 Mile, Training Day, Half Baked, The Wash, and Exit Wounds. Snoop had his own TV show on MTV as do many other black entertainers such as Steve Harvey, Cedric the Entertainer, DL Hugley, Bernie Mac, etc.

Making your product free is the secret to making money in the 21st Century. Think of the Network Television and Radio Industries. Both of these industries provide their service for free. How do they make their money? Advertising. Advertising is the key to making money on the Internet. If I was an artist I would have my own website where you could read my biography, download my music for free, find info about my shows, buy concert tickets, posters, clothing, and the more traffic I have the more advertisers are going to pay me to put their logo or website link on my page. So it’s not your fans that are paying your salary it’s a community effort from all the high dollar corporations out there trying to get noticed.

Some artists complain that they don’t like the idea of going independent because they don’t enjoy business side of it and they are not good at the promotion and accounting side of the business. I have two things to say to that. One, fine then hire a friend or manager that you can trust and have him do it for a cost. Or two, if you don’t like to think of it as a business then don’t make it your career; make your music a hobby.

While I do think it is wrong to download music, I get very frustrated when artists cry about not being able to do what they used to do, which was just, sit back and collect checks. For goodness sake be innovative. Think, if you were the first to take these steps you would get press just for your actions regardless if your music were chic. I am sorry that you have to actually work now but if you would stop bitching for a minute and take a few courses of action you could go straight to the top and bring the wave of the future.

“Change is inevitable”