Xero’s IPO is successful

Well done to Xero – who managed to raise the $15m targeted in their IPO. That will see them out for a year or two.

It seems that investors got the first 5,000 shares asked for, and half of the rest. That’s for the ‘public pool’, which was, as far as I can make out ‘approximately $8.65m’ (page 16 of the prospectus). If we say that the reserved shares were allocated to 37 investors, then the average investment for the remaining 1130 investors is $7,655. However, the distribution of investment varies, and you would expect a bunch of investors at or near the minimum ($1,000). I did (made up) a quick and dirty distribution, and am picking that about 250-350 investors put in $5000 or more, unless there were a few huge investors in the public pool.

Interestingly trading in the shares will begin at 11am on (tomorrow) Tuesday the 5th of June, while allocations can only be confirmed from 9am on the same day. That could make for a thin market on Tuesday – which may mean volatility.

Truemors

Truemors is a cool fusion of news and rumors, and perhaps a new word we need to learn. It was launched by Guy Kawasaki for just $12100, although he also has an enormously popular blog and a huge following.

I’m not sure it is useful yet, but one thing I do like is that I have the ability to score rumors without logging in. Other wannabe Digg’s take note.

April is shorter than March

I just have to quote this Dow Jones wire article – via the subscription walled WSJ.

“Yahoo! UK Web Sites’ Vistors Dn 3% On Mo In April – ComScore’

Yes – that’s the real headline, complete with 3 shortened words.

“DOW JONES NEWSWIRES
May 29, 2007 6:02 a.m.

LONDON (Dow Jones)–Unique visitors to Web sites owned by Yahoo! Inc. (YHOO) fell 3% on the month in April, data released Tuesday show.
…

U.K. sites owned by Mountain View California-based Google had 27.4 million unique visitors in April 2007, roughly flat compared with March.”

3% is, of course, the number of days that April is shorter than March. As growth rates fall to sane levels, internet companies actually have to start taking account of how many days there are in a month.

Many media companies on weekly cycles (newspapers, websites) report on a weekly rather than monthly cycle, and aggregate months as combinations of weeks (e.g. 4,4,5)

AFR.com.au

Someone (at Crikey.com) has finally written about the usability travesty that is AFR.com.au. The article is pretty entertaining, but the points about the usability of what should be the wsj of this region are right on:

The article starts with a bang…

“The AFR’s new multi-million dollar online push is in serious trouble, with the big end of town blowing up over the hopeless software platform and Fairfax’s draconian policy of cracking down on re-use of articles.”

..and goes on (and on) to give the case against the site from the point of view of media aggregators and spin doctors. (They don’t like it).

Let’s face it – the site breaks some pretty basic usability rules:

“They.. constructed the site so that the stories couldn’t be cut and pasted into an email and forwarded on”

“The AFR’s bells-and-whistles website doesn’t allow clicks through from Blackberries”

“Some subscribers can’t even type in the search terms without trying three or four times.”

“Flash is dreadfully slow for some users”

The result is a good demonstration of how a poor online strategy can kill your print reputation and business – and this was a strategy designed, I guess, to help print sales.

One major financial institution is apparently seriously considering banning AFR.com subscriptions from its staff because of the inability to use it properly.

One senior comms person for a major company said their execs now considered The Australian “the newspaper of record for financial markets” because they simply couldn’t get anything from the Fin.

There are also noises in the market about journalists leaving the AFR as their writing is not getting out there, with the traffic to the site remaining trivial.

Meanwhile, the WSJ ticks along with its demonstration of how to make a great financial site of record.

A future for newspapers?

Andy Kessler’s A Future for Newspapers in the (subscription required) WSJ makes a few good points:

“Media, after all, is about owning a pipe …. The tighter the pipe, the less the competition.”

For broadcasters, the pipe is spectrum
For cable operators, it is often the sole cable franchise
For phone companies, it’s those regulated copper wires
And newspapers? … unless you are the only paper in town there is not much of a pipe to control.

In NZ pretty much every newspaper has no competition in their area – so you could say that they do control the pipe. The competitive exception is the Sunday Star Times and the Herald on Sunday – both national papers.

Instead, reputation, quality news gathering, trust and credibility maintain the franchise, something The Wall Street Journal and the New York Times enjoy on a national level and the Washington Post and others have locally.

I could not agree more – and it applies in NZ as well.

Even a 30-inch screen can’t match the readability of what cheaply spits out of a printing press.

I’m reading his article on a 30 inch screen – and I can tell you it is a whole lot better than waiting for the WSJ to get delivered to me in Wellington. Not to mention cheaper, and easier on the environment.

I really believe that the copy protection mechanism for newspapers is their consumer interface, in the form of ink spurted on newsprint… thanks to a form that’s hard to duplicate, newspapers still have time.

Sure – but it’s not the format of what you are reading which is the deliverer of value to the reader – it is the editorial and the advertising. Some of us have already migrated to reading almost solely online, and the remainder will follow as technology (pervasive broadband, big, flexible, cheap and tough screens etc.) matures.

In the meantime, rather than just charge for content, I’d be licensing every type of newfangled software and Web service until I could come up with a tight community of interest around my newspaper, local or national. Don’t just start the discussion, keep it. This means comments, reviews, personalized newsfeeds, social networks of like-minded readers, whatever. Give advertisers a little “link love” so they don’t stray to generic search engines.

Though there is no point paying to add features if you do not have the content – either created by journalists or the community. I believe that readers migrate to quality writing that is targeted at them..

Google, Microsoft and others dropped over $10 billion to buy online ad-delivery companies in the last few weeks alone. The value is there: Newspapers aren’t in the printing business, they’re in the ad business.

Yes. Which explains the Trade Me purchaser type, and the current rush online by NZ media companies.

Should you buy Crocs?

I had no idea that Crocs was a $3bn enterprise value company.

The Gross Profit margin of 60% and operating margins of 25% I can believe. Their shoes are elegantly simple to make, (mold, foam, boom) and shipping would be cheap – by volume not weight.

Apparently they’ll be the next Nike. (says bloggingstocks)

But I still think they are ugly, so I won’t be buying the shoes, or the stock, just yet.

Amazon shipping… more thoughts

To close the loop on earlier posts – the last of my 19 packages containing 22 books arrived shortly after the rest. Isn’t that a sight? They all came from the same US address, albeit a different one than the other books. None came from Germany – which has happened often in the past.

amazon boxes arrive

Actually there was one other package – the one containing 3 books. Interestingly enough it contained the 5th “Don’t Make Me Think” book – joining it’s other 4 companions that had been shipped individually.

Driving this change for Amazon are USPS changes in shipping prices, which has also affected sellers (on Amazon) of VHS videos. While Amazon had adjusted the ‘credit’ it gives sellers for shipping, it wasn’t by enough, and a revolt by sellers led Amazon to almost double, from $6.89 to $12.29, the seller’s credit for international shipping fees.

These new USPS rates are really making things interesting for those 7 of us interested in the logistics of international shipping of parcels.

Refining….

So this week has been interesting….. and a lot different from last week

– 6:10am in the car on Monday morning, and no later than 6:45am in the car each day thereafter

– 11-12 hour days at the refinery

– no access to local email on site (too hard for IT to set up)

– no access to email on site (far too hard for IT)

– no cell phones allowed on site (safety)

– no cameras allowed on site (safety – sorry no photos)

– bring your own lunch (make it that morning – at about 6am)

but a great bunch of folks to work with both at the site and in the team, and it has been fun to learn a new process.

Local coverage from afar: Outsourcing journalists

From Rodney Van Meter via Dave Farber’s IP list, here is news that could make local news reporters nervous:

“The website Pasadena Now, a local online news source, has created a stir by hiring a couple of reporters to report on Pasadena City Council meetings. Why the stir? Well, the reporters live in Mumbai and Bangalore. They’ll watch the meetings over the Internet, arrange interviews via phone and videoconference, and write one or two 500-word stories a day, for the princely salaries of $12,000 and $8,000.”

It raises obvious questions though – while the outsourced Indian reporters don’t cost that much, they’ll lack the local context for everything they report. Meanwhile the tradition of training reporters by starting at smaller papers would suffer if this takes off, resulting eventually in an overall loss of journalistic quality. Also that price of $12,000 isn’t really saving that much versus a very junior part time local.

Xero – to invest or not – again

There has been some good discussion around the traps about Xero’s IPO. As I whizz to my plane I’d like to pop some more things into the mix:

1: The emphasis on SAAS to me is missing the point. The USP of Xero is its promise to reinvent the usability and the approach to processing your accounts. That could be done via SAAS or via a downloadable program with updates. If they succeed then this could be huge.

2: What guarantee do I have that once I’ve subscribed that the price won’t steadily rise? If I own a piece of software then I can choose or not to keep upgrading, but this seems to lock you in to a solution. It would ease my mind to know that importing and exporting to a range of other accounting software was seamless.

3: Small busineses are (or should be) tight with their money. If this is such a paradigm shifting product, then why are the prices so high? Can’t you charge me by the year ($99), or give me a lifetime price ($299), or charge by the amount of revenue I make? (<$100,000 – $99; $100-500,000 – $199; >$500,000 – $499 etc.)

4: I understand that the NZX only requires one year of projections, but this is an early stage company, and as there is no revenue history, why can’t we see a fuller model? I’d love to see 3-5 years worth of numbers, backed up by clearly stated assumptions. There should be a robust discussion of the method used to come up with those assumptions and the management team’s take on the certainty and variability of them.

5: Mark Clare’s sudden visit to Xero after his first Valuecruncher post stuck me as unusual. Not untoward, just unusual. His post about it is worth reading.

6: Why no plan to enter the USA? That’s the real market – the US economy dwarfs everybody else’s, and if you want internet savvy customers that are ready for this sort of thing that is where they are. (many will be using Intuit’s online tax products)

Refining refining

So I’m enroute to Perth – where I’ll be consulting for the week to BHPB’s Kwinana Nickel Refinery – which is the world’s third largest producer of refined Nickel.

I’m looking forward to it – the change of industries is pretty dramatic – Friday night at the black tie Qantas awards, Saturday on Qantas planes, Sunday preparing and Monday at 6:50am kickoff at the refinery gates.

Blogging will reduce sharply in frequency – perhaps to zero, as it appears that we will not have internet access from the place we are staying. and I thought australia was ahead of NZ in this stuff.

Air New Zealand is shrinking leg room

This drives me nuts. Air NZ is plonking an extra row of seats into domestic planes.

Seating was already cramped for passengers of medium height and those taller than 1.9 metres (6ft 3in) “find it uncomfortable as it is”, Mr Thomas said.

It’s uncomfortable for me at 6ft. It’s not just about the literal leg room, it’s about the space between me, my laptop and the seat in front. I already dread getting on a plane – and that claustrophobic feeling of being in a box. The cramped space increases the stress levels for passengers and staff, resulting in an increasingly unpleasant experience.

“Air New Zealand spokeswoman Tracey Palmer said leg room would be tightened particularly near the rear of the aircraft.”

No no No – Jet Blue has this one sorted – make the seats in the rear of the plane have more legroom than the ones at the front – that way you can choose between convenience or comfort.

“Other cabin design changes would reduce the weight of the aircraft, largely offsetting the increased weight of six passengers.” 

Start by getting rid of the food trolleys and hand out food by, err, hand – again like Jet Blue.  But I wonder what those design changes are.

It seems that much of the business travel has migrated to AirNZ – the Koru lounges are like train stations at rush hour, the planes are full, I have to be earlier than 13 minutes before the flight to check in, and I get a seat a third of the way back from the front. They do have lots of flights, and those check in machines are excellent.

Meanwhile Qantas lounges are empty, their planes are less full, they are tolerant of me turning up 10 minutes before the flight, and I always get a seat in the front 3 rows. Shame their planes are often late – which is why AirNZ is getting the traffic.

When I was in the US I recall that American Airlines removed a row or two of seats, and I became a loyal customer. Later, when things got tough, they put them back – so I flipped to Jet Blue and SouthWest and have never looked back. If Qantas can sort their reliability (another plane perhaps?) then AirNZ may rue this decision.