Harvard Business Publishing

Umair,
As usual an "dense in value post" :-) Couple of thoughts..

1. is there a significance to the numbering?


2. if we were to break this behavior, should we start value creation by going down this list from 1-12


3. i love point 9! - i am a product manager; just revealing my bias

I'm not sure I understand your point on #11. I'm not necessarily arguing against the regulation of utilities, but how does deregulation constitute "[expropriation of] rights from people"?

hi amar,

i'm glad you enjoyed it. no particular order, just the order i read them in.

hi phil,

the article noted an order of magnitude spike in energy prices. perhaps privatizing natural monopolies isn't the greatest idea, because producers are able to set an ask price, without giving consumers the right to effectively bid (which is what happened if you look at the structure of the texas market).

thx for the comments guys.

Love the list. I don't understand what is so destructive about #1, however. It seems like most of the companies cited in the article are using the service to augment their own internal innovation processes. Plus, the model is rather similar to elance's, which you have heaped praise on in the past. Sure, the dollar amounts are small but you seem to be making a point about principle, not practice.

If one wants to truly understand the US economy one needs to understand that the Federal Reserve is a private corporation run by bankers for profit.

Many think that the fed is a government institution. It is not. It is a private corporation owned by bankers and run for profit.

You can watch a movie called Money as Debt on youtube about the federal reserve or watch The Federal Reserve Zeitgeist. Each of these movies explains where and how money is put into our economy.

The great depression as this recession are both planned events.

If we bail out the banks we are just enslaving the American people in more debt. As every dollar the fed creates they create debt on top of it that the American people need to pay back. How do we pay off the debt? the fed creates more money and each dollar they create they put debt on top of it.

Learn and teach others about the Federal Reserve.

Stimulus Package "Deja vu", Not really!

As the brains of our economy continue to brainstorm how to get us out of the mess the real estate market first got us in and now high gas prices and a declining economy over all the easy way out seems to be again, an economic stimulus package.

Not so fast, not again.

First president bush opposes it.
Second, according to the experts only 20 percent of the people who got stimulus package number one said the rebate led them to spend more and the rest, well it seems that the rest just took the money and put it into their savings account.

Economic stimulus package number one was suppose to get our slow economy going, by then president bush had not heard of a 4 dollar a gallon of gasoline.
By now that's old news and as he put it on he's own words "he's heard of it now".

Well now mr president one gallon of gas almost hits the 5 dollar mark, have you heard of it?

Anyhow, the 100 billion dollars in checks that circulated among many Americans (600.00 for singles, 1,200.00 for couples) apparently didn't help.
The money went out on time and gas prices went up just on time as well.
With gas prices, food prices also went up.
Isn't that how it usually works?
Gas prices go up everything goes up, after all business have to make up for the extra expenses and they just pass the check onto us.

Here's an idea!

How about lowering the tax on gasoline?
Do we really know how much money we pay on gas taxes in the u.s?
Aren't this taxes imposed by our government, well maybe our government can really give a stimulus to our morale and lower the taxes we pay on gas prices.
A lower tax in gasoline prices will stimulate business and consumers, it's not rocket science!

Source for this quote: Wikipedia
"Fuel taxes in the United States vary by state. For the first quarter of 2008, the average state gasoline tax is 28.6 cents per US gallon, plus 18.4 cents per US gallon federal tax making the total 47 cents per US gallon"

Wake up call number 6? IndyMac is not the first one to go.

American's woke up to another slap in the face, IndyMac.
The bank giant where many people deposited their life savings is going out of business.
There you had them!

People waiting in line to take their money out, only to be rejected later by other bank institutions when trying to deposit their money or what they could get of it because the letterhead of the cashier's check had the infamous word: Indymac.

It was reported in the media that a california woman tried to deposit a cashier's check from Indymac at a washington mutual branch in pasadena and she was told that it could take up to eight weeks for her funds to be available
Other bank institutions said that they are following the federal guidelines in regards to availability of funds on the new deposits, and that those same guidelines apply to checks from indymac.

The truth of the matter is that failures like indymac's have name: greed from the Real Estate boom.
Now banks are paying the consequences, first it was Countrywide that have bailed out by a purchase from Bank of America, not without having the ceo (angelo mozillo) walk away with a multimillion severance package.
Now indymac is under investigation by the fbi for possible fraud in the subprime market.

According to the media reports, the investigation is focusing in the company and not in the individuals who run it.
Apparently, indymac officials approved loans to people who otherwise wouldn't be able to qualify for one, leaving now thousands on the verge of foreclosure.

I think number six is an interesting point. I am interested in the concept of durability and believe this is an underinvested value both in terms of the product and the brand. We often have a neophiliac approach to consumption, and certainly in these days when many electronic and computer products have reached their design optimum and there is market saturation, there is a need to repackage or decorate - adding value in this ornamental fashion seems to me ok if one thinks in short-term values, but like the "puppy in the window" syndrome, the consumers will be happy for a month or two, then its off to the new model. Yet in a down turn and with diminishing resources, higher fuel prices, it seems to me that rather than placing value on short-term goals like looks, one should go for products and brands that are durable. The old 78 rpm records are still playable. A model T Ford is still startable. A Vostok rocket can still carry a load.
A telefunken radio can play Amy Winehouse.... So yes number six is a rich seam to work with.

Umair,

Thanks for guiding us through these articles.

I'm not sure I understand your point on number 9. Why can we blame Ford for producing the types of cars that consumers wanted? Weren't they adding value to a market, even though we are moving on from that gas-guzzling phase? Are you suggesting they should have been less motivated by profits and more about environmental concerns?

> Bonus reading: how next-gen markets might just save the world

From that article:
> Sohngen does warn that his estimates don't account
> for the potentially considerable costs of enforcing
> deals, monitoring forests and paying middlemen.

I would say those costs are a bit more than "potentially considerable".

I think there is only one way to stop deforestation and that is to provide everyone in these areas with a much more profitable alternative.

Since that is not going to happen, we simply have to deal with the fact that there won't be a single rain forest left in twenty years.

Let us focus on dealing with that situation in stead of wasting our time trying to prevent the inevitable.

(yes I am being a bit dramatic here, just playing with thoughts)

Brilliant insight, Umair.

I know I'm about 3 weeks late here, but for me, point #9 is the key. If you forget that at the highest level business exists to change the world for the better, you end up with an overvalued real estate market, a crumbling financial system, and a culture of over-consumption and greed.