The media is no longer the message

An interesting survey by eMarketer, via WebProNews:

Stop. Don’t look too hard at the table. This survey is fundamentally flawed.

The flaw is simple, and it reflects an old mode of thinking: These days the media is not the message.

For example there are over 200 million blogs (they have stopped counting), and to rate them all together is patently unfair. You cannot compare, say, Bernard Hickey’s with The Bad Blog (which is what I found when I googled “bad blog”, and which is actually not that bad).

To put it another way, on interest rate matters the blog is more trusted than, say, TV1 Business News. However on general business or current events news, TV1 would be better.

Meanwhile Bernard and the rest of the team’s blog is less trusted, by me, than the Wall Street Journal – a publication that is a newspaper, has a online news site, offers video, does product comparisons and has blogging.

How do we measure all of this that? How do we compare the WSJ video with their print edition? How do we compare Fox TV news with their internet site with their internet delivered video?

The answer is that we don’t, as we know that increasingly the media type irrelevant and the publisher’s brand is everything. We seek our trusted providers, and we are getting pretty agnostic about where we find them:

  • If we are watching TV then we know that the BBC has a better global perspective than Fox News – unless we are right wing and living in the USA.
  • If we are online then the NYTimes is better than the Waikato Times – unless we live in Waikato and want the latest Hamilton news.
  • If we are reading about something esoteric then we know to search the internet, and that Wikiedia or a blog is probably going to have the best answer.

We assess credibility very quickly. We look for the publisher (e.g. Bloggers that write for newspapers have more credibility), we assess the credibility of the writer by looking at the production or site design, checking the publisher or writer background (about 2.2% of the traffic here checks my bio), see who refers to the that source, then look for well-crafted writing and video solid references and so on. We are often not really aware of how we do it, but we can do all of this in less than, say, 5 seconds.

It used to be that we looked for beautiful people to deliver news that we trust, but Fox news in particular has made this increasingly irrelevant – as we have come to realise that beauty is not correlated with intelligence or trustworthiness.*

We have already made decisions for older media – The Dominion Post and TVNZ news have a rich heritage, and so we tend to trust them, while a new magazine like Idealog will need to earn our trust through excellent writing, distribution and product design. However the older media can lose our trust, and when it goes, as it has for me and most TV news, it is very hard to earn back.

So how should the survey have been written? Here is one possibility. It’s not ideal but I feel it is a better way to ask the question. The audience is of course biased – and it will be interesting to see how biased.

Posted in Business, Internet Business, media | Tagged | 6 Comments

Lingopal is big in Japan

Lingopal translates between 42 languages – and can be operated in any of those languages as well. That means it is of use to people shopping on all of the Apple iTunes stores.

So it was always going to be interesting which countries picked us up first. Would backpackers from Australia and UK find us more useful, or would we be big in the USA?

Turns out we are biggest in Japan. We have done no marketing there – it is all organic growth as our google ad writing and PR ability is not so good in Japanese.

To see how different this is versus the normal distribution of sales by country, here are out sales compared to Flight Control sales figures:

I guess it isn’t surprising that we are not big in the USA, as the average person travels there a bit less, and it really is early days for every country. I’d expect us to be bigger in the UK and Germany though – but this is just a matter of when.

At least the Japan numbers are telling us that Lingopal is useful and that when it gets popular it stays popular.

You can skew these numbers if you like – go ahead and buy Lingopal on iTunes!

Posted in NZ Business | Tagged ,

Importing MYOB data into Xero – opportunity?

I’m trying to convince my mother to switch to Xero from MYOB. The unfortunate problem is that all of her history is stored in MYOB, and so switching requires re-keying of invoices and the like.

The solution to this is to commence using Xero at the start of a financial year, which leads to a spike in Xero sales at the end of each year, but means a discontinuity in systems. Moreover the end/start of the year is a particularly busy time for bean counting, and is therefore the worst time to try to change your modus operendi.

To me this is a pretty simple “just do it” for Xero, and there are three powerful reasons for doing so:

  1. Encourage switching throughout the year, increasing speed of adoption and word of mouth sales through the year
  2. Increases sales by letting customers have test drives using live data – customers can upload their MYOB data to Xero and just start playing. It’s pretty hard not to notice the difference in usability when your own numbers are displayed.
  3. Provide a better product to customers by importing history and thus being able to report comparative results versus previous financial periods

How about it Xero? Sure this is a non-trivial task, but surely it is possible?

If not, then let us know, as there is a market gap here and a new company (let’s call it NewXco) could help.

NewXco would simply provide a (semi-)automatic MYOB upload to Xero service, charging a fee or taking a commission on Xero sales. The repetitious work could be done out of a cheaper location, such as India or rural New Zealand, and the cunning code provided by some smart locals. Anyone in?

Posted in Australia Business, Internet Business, NZ Business | Tagged | 9 Comments

How Baupost’s goresight let them weather the storm

Notes from Seth Klarman’s speech at Columbia Business School is, interestingly, the most popular clicked-on link from here, coming from The Baupost Story post. So let’s do a round up of coverage, find some more reading on the Baupost story and see what we can learn about how Baupost’s approach pays off for investors during tough times.

First here’s an excerpt from Seth Klarman’s wildly expensive “Margin of Safety” book – talking about liquidation value. I’m not so sure that it is entirely obeying copyright rules, so read it while you can.

Next have a read of some early Baupost Group letters (recently uploaded by Noise Free Investing and found through  Valueplays) to great insight to how Baupost operates. The letters refer to a smaller fund that is run alongside the main fund for friends and family of the main fund investors. It is remarkable to see the foresight in the commentary leading up to and through the dot com boom and bust and to see the letter series end in mid 2001 with the fund holding 48.6% cash. That no doubt set them up well for the post September 11 crash, and so I guess they continued to do well. I would dearly like to see the rest of the series of letters – in particular the returns over the last two years would be fascinating.

As it happens another letter has leaked out from the main fund from September last year. The comments are pretty telling, again showing Baupost’s foresight* and providing vindication for their cautious approach to investing. (I first miss-typed that as “goresight” which I thought was appropriate)

Market Folly has a good summary of Baupost’s recent behaviour – mentioning that Baupost has $14 billion in assets, which was mostly 50% cash in recent years and that over 25 years the compound annual return was 20%. It seems that Baupost is starting to spend that cash now as they see bargains that meet their rigourous requirements. It takes real discipline to sit on a hoard of cash and not invest it, and while you may miss out on the next dot com or housing boom by doing so, you’ll also miss out on the potential to lose everything when those bubbles burst.

A more recent interview with HBS on Market Folly and via Valueplays again lets us know that Klarman started with just $27m in the fund in 1982, and was paid a salary of a princely $35,000. The new news is that the writer also mentions that Baupost had cut their cash hoard in half – to about 25% – by December last year.

Compare that 25% cash figure to April 20  last year when  Baupost had 45% cash, 20% equities, 17% distressed debt, 11% real estate and an amazing 6% in South Korean equities.

45% cash in April 2008 was an astonishingly smart move – and Seth Klarman even mentioned that they would have gone to 100% cash if it made sense. That let them go on the gradually accelerating shopping spree.

The Korean move was interesting, as the market there hasn’t fared too well since then in USD terms – down 44%. However the Korean Won is also down 25%, so overall the market was down only 18% in Korean Won terms, and I imagine there was a currency hedge. That’s much better than the S&P500′s 35% loss in the same period, but still tough given Baupost’s “Rule 1: don’t lose money” philosophy. Baupost would have picked decent securities in the Korean market and probably had some interesting hedges against the high volatility events that happened.

The Korean market in US Dollar terms
The Korean Won versus the USD
The Korean Market in Korean Won terms
Trading Economics

On the other hand Baupost may have simply closed out their Korean positions early.

Posted in Investing

Praise, yes praise, for Telecom

This really is a stunning piece of work – even made this cynic think twice. Well done Telecom.

It’s important because it shows that Telecom increasingly gets it – they are getting that it is about delivering the right service to New Zealanders (fiber to the home rated a mention), they get that it is about the people that work there, and they get that Youtube (and twitter) are great mediums for spreading the news.They manage to say this while taking little digs at themselves and being very human.

It was uploaded yesterday Youtube time, and  had just 392 views when I saw it. It will be interesting to observe how far and fast the views go.

The cast list was telling – the boss is the eighth listed, which means he was the eighth person to appear in the piece. That’s leadership.

It’s so nice to be able to write something good about Telecom. Roll on the days when we can write a whole lot more.

Posted in Broadband, media, telecom | 3 Comments

Global warming and you

Here’s  excellent graphic from FiveThirtyEight via Treehugger and via New Zealand’s The visible hand showing data from a report from the the Yale Forestry and Environmental Studies School Climate Change project. It needs no explanation.

The project’s survey: “Climate Change on the the American Mind” is a lengthy and ponderous read, and is so queued in my reading list. It contained this graphic, which has the same (and a bit more) information as the inverted triangle above – It’s a chart that any consultant would love, and it is difficult to read and, well, boring.

The learning here is that each chart should deliver one message, and to focus the chart on that message alone. It’s too easy to get wrapped up in presenting everything sometimes, when taking out the key facts has much higher impact.

This chart is has great information  – however it really could have been drawn better. It says that 69% of Americans believe in Global Warming now, but more importantly that only 10% deny (to one extent or another) that it is happening and only 3% are extremely sure it is not happening.

(*Incidentally the FES school was until pretty recently called just the Forestry school. Also I did one course there so anything I say about them will clearly be biased. )

Posted in Global Macro Trends, media | 2 Comments

Wear your safety equipment – black Gloves are cool

Following on from an earlier post on dorky safety Glasses – the next easiest piece of safety protection to wear is a decent pair of gloves.

They can even make your live easier when working. Indeed it is this that has led me to wear gloves a lot recently, and while the gloves can make fiddly things a bit tougher the benefits outweigh those costs:

  • Better grip: The right work gloves grip well – so you can apply more force where it is needed. The gloves’ extra grip mean that your will hands slip less often, reducing the amount of times your hands get hit.
  • Protection: When you do hit your hands then the gloves dull the hit and importantly they will save you from getting cut.
  • Cleanliness: When you are done your hands are clean – it’s a remarkable feeling. You can wash the gloves by leaving them on and washing your hands in the normal way.

To be fair you do need to get the right gloves, making sure they match the task at hand. I’ve been astonished at the variety of gloves available these days, and they are at very good prices. (check out your local handyman store.) There are tight fitting ones that actually make gripping fiddly things easier and heavy ones that keep you warm while working outside.

One friend lost the tip of his finger in a sawing accident – he could have been wearing gloves that could tolerate a brief encounter with a whirring blade and saved a finger. These ones are essentially a modern form of chain mail, and are bound to impress small children as well:


Another person I recently met lost a finger tip after getting pricked by a rose – I kid you not. It became infected quite some time after the incident and he

was lucky not to have died. These days there are gardening gloves specifically designed for handling thorns – and you can even get gauntlets and chest protectors for those in the thick of it. Imagine being able to prune roses and the like knowing that your hands will not be hurt – not that pruning roses is any particular love of mine. The gentleman I met said he was still pruning roses without gloves, as was the surgeon that removed his finger-tip. Both could save themselves some pain.

Posted in NZ Business | 1 Comment