Lance Wiggs

Well done Stuffies - winning again at the Netguide awards. Best Home PAge, Best Media site and Supreme Winner - a fantastic haul. Meanwhile Trade Me captured Best Trading Site (shock, horror) and best Real Estate Site.

Interestingly Facebook went over the top of Bebo for best social netwokring site. Are Bebo’s days numbered, or do teenage girls not vote in the Net guide awards - the second I’d say.

Funny how I can’t find any other reference to the awards - NZHerald? Netguide??

It’s a certified Real Estate bust market, and you are a “successful property investor”. Do you:

A: do nothing - you got out long ago, when the signs were there.

B: frantically sell out of the remaining “investment” properties you own

C: What there’s a bust?

D: Start a property magazine and website.

Since this is a blog post, the answer is of course D: Start a Property magazine and website.

Dumb move or inspired genius? Stick around for 10 years and we’ll know.

In the short term the 3 page “cool and convenient” website, early PR, and promised advertising campaign smells a little of reek of big money being directed against the proverbial wall.

Meanwhile giants Fairfax, NZHerald and Property Press are not exactly sitting on their hands, while online Trade Me Property and RealEstate.co.nz have carved up the market nicely.

Good luck chaps

Dubai and Burger Fuel

No they have not conquered New Zealand yet

No they have not successfully demonstrated that they can enter Australia

No there is not conceivable explanation why they are choosing Dubai, which is not a sleepy market.

But enter Dubai they have. I guess someone had money to burn.

Crazy or Ballsy? Ben has more .

Michael has seemingly abandoned the Trade Me success Secrets blog, which was looking to be a really promising place to discuss and see all things Trade Me.

He also seems to have left the Grey Group - where he was also writing an interesting blog. If you want to see what an untended blog looks like, check out the comments to this post.

Meanwhile Michael’s Linked-in profile is still showing the G2/Grey Group connection.

So - what gives? Where are you now Michael? If you are out there we’d love to keep hearing your views..

Wheat, sugar and rice, along with “certain paper products” those are the items that will remain subject to tarrifs when we export them to China. They represent about 4% of our exports to China, so not a bad outcome.

All three grains are subject to some pretty serious subsidization and quota-driven distortions in the world markets, and we are not serious contenders in the field. So forget about it - let the USA and Europe carry on paying their farmers billions to grow uneconomic wheat and protect from cane sugar imports. This does deprive the developing world of huge export markets for their otherwise competitive farm proucts, but that is a different war.

Overall I’m impressed with the deal - pretty straightforward lowering of barriers and some cultural exchange (working holidays and the like) built in. No horrilbe DCMA copyright provisions, no distorting pseudo free trade - this is pretty close to a good as it gets, though dairy products will take until 2017-2019 and wool is subject to a quota.

Well done to both China and NZ’s negotiators.

The rules of origin seem to be pretty fair - a lot of “change to heading xxx from any other chapter”, by product, which I interpret as meaning that  if a country makes a product from sub product parts that came from elsewhere then it is still duty free.

But what of the human rights, I hear squealing from the left?

Well, another way to look at that question is to ask a similar question: do we believe that the USA should remove their distorting sugar quotas (that keep Cuba’s producers down), trade embargo and travel barriers to Cuba?

Of course they should - engagement is the best way to help another country move forward, and by being open with China we are able to help them welcome them to the world.

And besides - do we really think we, the last decent sized habitable land discovered by humans, can tell a 6000 year old civilisation, land of 1.3 billion, how to behave?

I think not - we punch above our weight, but they are in another game entirely

After last year’s terrible system that required you to register for some dubious website. Netguide have thankfully chosen to use a simple one page form. You do need to enter an email address and name, and a tech savvy person could game the entries, but overall this is a major improvement.

Trade Me is still mysteriously excluded from best shopping site, despite the fact that about 40% of the stuff they sell is not via auction and new.

Aside from that -well done. Here’s the link. (Don’t vote for me - I’m too small)

I voted for Stuff - last year they cleaned up!, interest.co.nz (financial services - it’s all about Bernard’s blog) and Xero (best new website).

Rod just pointed us to Sharesight - a downunder focused portfolio manager website. The website looks to be yummy goodness - simple to use and so forth.

I was initially pretty skeptical though - what use is another portfolio manager when you can do things pretty simply yourself, or with the likes of Yahoo?

Yahoo

So first let’s look at Yahoo. They let you construct a portfolio (or as many as you like) using share data from a whole bunch of exchanges - not just Australia and NZ. Here they are:

I set up a fake portfolio for Australia/NZ  in about 3 minutes. It lets you enter in the date that you acquired the shares, and will calculate the total return for you. You do need to remember how much you paid for it though.

You can create your own view of your portfolio, and, of course, plonk it on your myYahoo home page - handy if you use Yahoo mail. Pretty nice - and free, but old school.

Google’s offering is stunning.  Not only is coverage of NZ (and Au) shares now there, but it is a much more web 2.0 application - dead simple to use.

From an investor point of view - i.e. “how are the companies that I invest in doing?” the tools are excellent - with fantastic news sitting beneath flexible and comprehensive portfolios.

Google

you can switch the portfolio view very easily - here a fundamentals view:

(fake data)

You can add in transactions (with dates) and track overall performance on you iGoogle homepage - which, unlike Yahoo!, I actually use.

It doesn’t seem to bring in historical dividends, and doesn’t track options, but watch this space - Google moves fast. Overall I’m gushing - but really this is a lot better than ladt time I saw it, and perhaps even better than my own etrade account.

Best thing - Google tracks when earnings releases arrive, and you can add them to your google calendar. How simple!

eTrade

eTrade (US version) lets me track stocks across 5 different countries -  NZ (or even Australia) is not one of them. eTrade shows me my portfolio, including options, with market values and different views.  Additionally they have plenty of tools to track performance, though they could be better as I don’t get credit for timing my moves in and out of the market. It’s also a US-centric website, and as such everything is based on the US tax year - which is the calendar year. Running my NZ tax this year is going to be entertaining - though I can easily export my eTrade Transactions to excel and go from there.

Sharesight

And that’s where Sharesight has a market. It’s a great way to handle working out your NZ capital gains tax on your investments in Australia and NZ.

Overall the website looks entertainingly useful and fun. Plomk in your purhcase dates and amounts, and Sharesight calculates all the splits, dividends, tax credits and the like to give you an overall portfolio return.

Check out the Sharesight tour and video.

However - it is not all that useful yet for investors that invest in other lands - and we all should be doing so to have a diversified portfolio. There is space of course for sharesight to expand to accept transactions and calculate tax liability from other markets. So when Sharesight brings in foreign (US) stocks I’d be keen to give it a go.

But not at the current fees.

At the current fees I’d simply sign up for a month at the ned of each tax year, work out the tax and then get out straight after. There seems to be no benefit (and certainly a cost) from using Sharesight for day to day management versus either Google or your own online share broker.

Moreover the fees are tiered, and those top tiers are brutal, and kick in at very low usefulness Who owns less than 5 shares? who doesn’t want a tax report?

I’d chop them up and make a single tier, give an annual fee option along with the monthly one and forget about charging $39 for stuff that is “coming soon”. I also believe that the appetite for fees is much lower than portrayed. I’d be going along the lines of $10 or $20 per year, $50 at a stretch.

That’s the other pain - I wish that Google and eTrade could play together so that my transactions could be imorted from eTrade to Google. Similarly Sharesight is hopefully working on one click importing of whatever the local online share trading houses export. I have only a few stocks, but for someone with s portfolio of 20-30 stocks, purchased at differnt times, it would be a real pain to enter them all in. Of course it would be even more pain to work out the tax without Sharesight.

The business case

So  overall if I had an NZ portfolio of stocks I’d probably use Sharelight next month on the 30 day free trial to calculate my tax liability - and then not sign up. I believe that the pricing structure is all wrong - a yearly fee is better, and it should be around $20.

However the market is pretty small. The number of people in New Zealand that want to manage a portfolio would be a percentage of the  number of people that go to financial sites. There were about 31000 UB’s at directbroking, 22,500 at interest.co,nz and a paltry 15,000 odd at sharechat.co.nzduring February. I’m assuming naively that The directbroking customers have some sort of tracking tool, but that it isn’t great and so a percentage of people will come over. Let’s be wildly generous and say 10% come over. That’s 3,000 people.

The sharesight blog implies there are 730,000 shareholders in NZ. That’s a bunch, but most of those would be passive, suing someone else to manage their portfolio, or dead (literally). The Sharesight service is aimed at more active and engaged traders.  So let’s say they can get 5% of the overall shareholders in NZ - that’s about 35,000 people.

ok - so from 3,000 to 30,000 people at, for me, a fair price of $20 per year - that’s $60,000 to $600,000 per year.

If you believe in the $20 per month model, then multiply that by twelve to transform that $20 per year to $20 per month, and we get $720,000 to $7.2m in annual revenue. That upside would be much much lower at that sort of pricing - so my range would be more like $60,000 to $1m per year in the first years.

That has to support 4 owners/directors/principals and an outsourced interaction/ development firm. That’s means not a lot of custard to start. Launching into a massive bear market isn’t going to help - people trade a lot less when the market is falling.

What’s the upside?

Firstly, and obviously, it’s around getting more customers - either Kiwis with overseas portfolios, or overseas folk. The second one is tough, as Google is tough to compete against. More customers means more subscription income, and this is an easily scaled business.

Secondly, with their great usability I’d sign up very quickly if they extended into being an online broker - allowing me to trade shares. that’s a different busines model, but they’d take a chunk of the market pretty quickly.

Thirdly - there’s an obvious exit to a broker or to an internet business media player.

Finally - there is something about Sharesight being a custodial system. National bank are about to start changing a staggering 1% of portfolio value for “Custody fees”. That’s a significant amount, and if Sharesight can bring people over  then it is game over. They seem to think they can, but they need to really spell it out for people in single syllable words.

Well done guys - lovely execution, a business model with potential and some good PR to kick things along.  Fix the pricing though.

Telecom is launching something - I’m not really sure what it is, but apparently it will be some sort of Business Oriented Internet plan/ISP - where you get bundled internet access, hosting and things like Xero.

Business broadband plans will be “slightly differently priced” …

I read that as “more expensive”, but gee I’d pay anything for half decent NZ internet access - maybe even set up a business specifically to get it to my home.

and the services they encompass will also be different, she says. “There will be some guarantees about helpdesk and support.” 

Good. Indeed I do not know why more businesses don’t follow Trade Me’s example and set up 0900 (paid) customer service lines. When I want help, I want a really competent human to immediately answer the phone 24/7.

The business Internet service will register domain names for customers and offer to develop and host their websites. It will also provide managed e-mail services suitable for businesses and online backup.

Hang on -  why on earth would we want to get Telecom to provide those services?

Domain names, well maybe. But develop websites? Telecom outsourced their own unmitigated disaster of a website, so why would we not use any number of the excellent NZ design and development shops?

As for hosting, well let’s see what Xero themselves do…

Currently Xero is being hosted at Rackspace, in Houston Texas. (Follow that first link for all sorts of other fun stuff about Xero.com’s presence.)

Now - and this is really important for any Telecom employees involved in this effort - go to that Rackspace site. When you get there for the first time a popup appears - a real live person is actually offering to chat with you.

Close that down and browse the site - it is all about “fanatical support”. View the video testomonials, check out the offers and go ahead - order up a server and try them for real (or maybe just call some of their customers)

That’s the standard to aim for - fanatical customer service, 24/7. That’s what you’d need to offer for this service in order to make a difference, and sadly you’d need to do it at prices that are competitive with getting services straight from the USA.  (and that’s not a lot).

So - overall - it is good that Telecom is targeting small businesses, and I hope that they’ll stick to investing in providing reliable, speedy access to the internet and not get diverted into competing away from their core.

I popped in to Decisive flow - aka as home of Natalie from Simpleandloveable .

How cool is their office!

a little bit of Ikea in a cool space goes a long way

well done Natalie and team.

Falafulu Fisi asks an excellent question to the previous post on Auckland Airport:

“Aren’t both Auckland Airport & Telecom private companies? Why would you want to say that the government is an interventionist regarding the CPPIB attempt to buying shares in the Auckland Airport but not saying the same thing about Telecom?

I am a defender of property rights, and the state has no right at all to meddle in the affairs of private businesses such as Telecom or Auckland Airport. That decision to sell or not to sell is entirely up to the rightful owners (ie, the Airport Shareholders) and not those Commissars in Wellington .

That was a great question, but I feel I am being entirely consistent here.

I am a fan of Govnerment intervention when the market is so inefficient and the company is out of control that the other stakeholders (beyond shareholders) are under threat, and unable to do anything about it due to monopoly power.

I’ve been wandering around NZ this week and frankly the broadband situation is beyond a joke - it is shameful crime that has left us in the dark ages of the internet.

There is a very well run dot com that I visited yesterday that is unable to even hold phone calls over Skype to the UK or USA as their connection keeps dropping out. This means increased costs, but even more importantly, that they are not part of the global internet business community that lives, wheels and deals on Skype. (Try putting together a 6 way phone call using traditional services at a moment’s notice.)

Now their customer base is almost entirely overseas, but they should be able to operate from NZ. But despite Wellington’s other advantages they would be not without cause if they uprooted and headed for the first world.

Government intervention into Telecom is the only way that the primary stakeholders (customers and the economy) could get the service that the country needed. There were plenty of warnings, but the head was stuck firmly in the sands of short term profits.

There are plenty of other monopolies and duopolies in NZ that understand how to play the game when you own a market. You set your prices well below monopoly prices, you are great to your customers and you know if you step out of line then the ComCom and the Government will be all over you.

Auckland Airport has not exhibited poor behaviour - they are running a good business, and are even upgrading the domestic terminal. An equivilent case for intervention would be if they put prices up, ran the terminals into the ground (and so spoiled NZ’s image and tourism numbers) and milked the dying cow.

All that is proposed for Auckland Airport is a change of ownership, which has no material impact on the relationship between the corporation and it’s stakeholders. It’s not as if the new owners are going to roll the airport up, put it on the back of a ship of unusual size and transfer it to a field outside Toronto. This intervention is uncalled for from the customers that use the airport, and to compound it has a negative effect on FDI for NZ.

Where is Infratil while this is going on? They are conflicted - on the one hand they own Wellington Airport and would love a piece of Auckland, so they should keep quiet. However on the other hand they own Preston Prestwick (edit - thanks Tylersdad) Airport South of Glasgow in Scotland, and they should be deeply protesting our Government’s ham-sized fists which will make it much harder for them to buy other foreign airports in the future.

Score one for protectionism, and minus several ranks of the economic freedom index for New Zealand, after the Government intervenes to prevent a Canadian fund from buying into Auckland airport.

When the market drops by 2% after a new protectionist law is created it should be obvious to everyone the impact of ham-fisted interventionist Government policy.

This law means that the Government has reserved the right to change investment rules on a whim, and so the risk of investing in New Zealand has just risen substantially. Foreign investors will apply a higher risk rating to NZ, and so will demand higher returns for their investments. That means less foreign money coming in, and ultimately, lower growth.

Is this what the govenrment is promoting? Lower growth?

There are plenty of ways to protect “strategic assets”. Changing the investment laws is amongst the worst of them.

Natalie at SimpleandLoveable  laments the passing of a great service into a lousy one - after a shoddy website redesign by DigitalMax.

Now I briefly used DigitalMax two or so years back, so I went to the DigitalMax site to see how bad it now is.  Let’s start with the homepage, an ask the age-old question - What do you want me to do?

..and I have no idea. I can find out more about 20c prints, login, join, add add photos and so on but there  is no obvious “Start here” option.

–>add a Start Here button, section or just make it obvious what the main thing to do is

–> Make it easy for me to understand what the website is for. (”Print your photos”) 

So - I first tried to Add Photos, since that seems to be the “start here” option for me.

I got this screen. What is it saying?

It’s actually an error message - written in small blue script beneath the gloss. While the error message should be a lot more obvious, why not show the registration screen for me to login or register? Why do I have to login to try the site anyway? Can’t I upload photos, play around and then decide whether or not to buy? Most online shops let you do this.

–> let me play before registering or logging in 

I’ve been a member before, so I try to login and get this:

–> Highlight errors by using red text and/or shading  

Again - a tiny, hidden in blue text, error message. So I try looking for my old details and again get these useless error messages.

Digitamax has forgotten that I was ever a customer which makes me feel pretty unloved.

–> never lose my details 

–>put the registration details on the login error page so that I can join without clicking away

I am about done with this site. But, I persevere in the name of bad usability science.

The registration page is actually simple and painless, making it even stranger to understand why I have to click to get there - why not put it on the front page (if you insist on me registering, at least say “Register now to get started”).

–> put the registration form on the front page (if you insist on me registering first, which you shouldn’t) 

Unfortunately DigitalMax then accepts my registration (with no click on the email link to confirm), and then compounds this error by emailing my my login address and password back to me. Thanks for showing everyone my password.

–> never ever email me a password that I’ve entered. Send me a generated one if I ask for it or send me nothing at all. 

–> Confirm email addresses to prevent junk account set-up attempts.  

After successfully registering, rather than automatically logging me in, I am invited to manually do so. Did anyone actually test this new site with real users?

–> test and retest. Listen to your users and watch them in real life.

–> log people in automtically after registration. 

It goes on. The login doesn’t actually seem to let the rest of the website know what is going in - here’s the screen after logged in:

The main part of the page is still thanking me for registering and asking me to log in. The first use of red text is not for an error message, but for a success message.

–> Greet me by name when I am logged in

–> Make it obvious what to do next by putting a giant “Add photos” in the screen after logging in

It goes on and on and I have had enough. There are one or two good screens, but generally Digitalmax fails on a number of levels. They do not make it obvious what to do, they have lots of glitz but poor usability, and they didn’t even deign to respond to Web Designer and customer Natalie’s email.

Now DigitaMax is otherwise a NZ success story - Auckland based, and offering a good service and range of pretty cool products. Terabyte appears to have done this redesign, and while they have a large portfolio, the website is a poor advertisement for their ability to deliver a website that delivers  results. Sitting here it is imposible to know whether the client or the design firm should take the blame, but overall this was a giant leap backwards for DigitalMax.

However, a few simple changes could reap dividends for the bottom line:

–> buy “Don’t make me think”, listen to your customers, understand (through the numbers) what people are doing on your website and make constant tweaks to improve the bottom line. 

–> Continue to work on a redesigned website constantly - without assuming a “website redesign” is finished when the site is up. That may mean you need to budget a bit more.

–> Take ownership of your own website - use the designers as consultants, but understand what you are trying to do and what good looks like.

–> Focus on removing steps from the process - minimise the number of steps between arriving at the website and ordering prints. You should be able to do it in three screens.

–> Respond to Natalie. Indeed go and hire her.

It’s pretty easy to ignore reading the NZHerald (or whatever site) when this happens:

I browse in tabs, so I just close the NZHerald tab and move on. It is easier to do that then to move the mouse down to the close (X) button on the NetRatings pop in.

Net Ratings could fix this by sending those invitations out less often, being smarter about unique I/P addresses, making a much bigger “close” button, defaulting to “No” so that if I press enter the box will go away, and updating their survey to ask relevant, interesting questions.

Here is one for Westlife.

A lost opportunity for Trade Me perhaps, but ticketing is a tough market to get into as it is all about tying up the suppliers of the tickets.

However, given that, Trade Me (or whomever) still has the ability to enter the market by offering the same service at a cheaper price - so long as they can bring something else to the table. Trade Me could bring traffic, and they and others can bring website usability.

That’s right - that auction didn’t actually work for me. Perhaps I needed to be logged in, perhaps it does not work on Safari, but in either case a result other than a page reload would have been useful. Simple stuff really.

There is also no indication of how many tickets are being offered, whether there are other seats on offer or whether the winning bidder for a seat in a particular range pays their bid price or the lowest winning bid price for that range.

some work to do.

SST reports on several stories of negative equity situations happening in Auckland.

That’s when the value of a house is less than the money owed to the bank.

“One home had mortgages to ASB for $723,000 and Finance Assist for $150,000. It sold for $535,000.
…

“The mortgage was to Property Finance Securities (in receivership) for $1.363m. After much encouragement from the auctioneer it sold to a dapper gentleman in a pinstriped suit for $780,000.

When negative equity occurs  the financially logical, if not exactly ethical, thing for owners to do is to walk away from the mortgage (and perhaps declare bankruptcy). The banks force the house into a foreclosure auction and walk away with less money than they are owed.

It’s called judgment day.

The day when all the “it’s too good to be true” stories finally become exposed for the confidence trick that they are

The day when the leveraged speculators that got in late into the real estate boom move from being paper millionaires to paupers playing with worthless paper

The  day when the media turns against the industry, the editorial and advertising pages dedicated to real estate shrink and the commentary begins to have a sharp edge
The day when we all recall how it was in 1987, and how housing prices took years and years to recover

The day when the bubble is exposed as it bursts

The day when dapper gentlemen in pin striped suits start to become interested in picking up a bargain or two.

The day when I start to become mildly, oh so mildly,  interested in real estate.