31 October, 2008

sell to needs , not to clients.

Often businesses focus on the bottom line when trying to gain leads that turn to active sales of products or services offered by the business. This is the wrong way of looking at gathering business, the best way is to take a customer focused approach which requires that we seek needs instead of seeking clients. When we seek clients we tend to impress upon a candidate a possibly false sense of need for our products or services, when this is done we are being disingenuous and are not customer focused but are self focused and this doesn't maximize long term returns. In the event that after the sale the client determines that our offering does not mesh with their processes as was promised they will keep this in mind and be sure to warn their friends who could be potential clients about your non customer focused tactics. The best way to ensure that right sale after the pitch is to be 100% honest about how our product or service can be useful to the prospective client by isolating if they have a true need for our businesses services. This involves actually caring enough about the client to find out how their business works and to determine if adoption of our product or service can make those processes more cost effective and over all more efficient. So when dealing with potential customers always seek to determine their need for your service or product and if it doesn't exist, provide them with the honest truth of that fact... by doing this you will gain the respect of yet another business that through its contacts and clients may bring you potential clients whose needs your business can serve perfectly. Sales is about both getting the deal now from those that need your services and delaying services from others later by proxy of those who did not need your services but remembered the fact that you took the time and effort to tell them the truth about that fact in your interactions with them. This is how a good business builds long term interest and ensures steady growth.

live big in little places

Being able to dwell on a small kernel of in idea in order to flesh it out and determine the parameters of the idea is important as it allows us to extract new realizations from an exploration that few seldom do. It is by looking at the areas that might be overlooked that form the intersections of various concepts or needs that hold the potential for new revolutionary solutions. In my work as a software engineer and architect of Numeroom.com I encountered many areas in creating my service options that came to existence not from an active and conscious intention on my part to innovate them but rather by natural confluence of functionality provided by the services tying together with the potential for greater efficiency by slight modification of these existing functions or by radical modification through the use of a novel idea. One key insight has enabled the creation of 2 functions that would not exist had the infrastructure for their existence not been previously available in another function. The details of these functions must await the launch of the site for me to reveal the details but suffice it to say that it was by living big in the little place of a single idea that I was able to generate 2 new innovations that would not have existed had I failed to entertain the functionality that gave those innovations the potential for realization. A concrete example of this can be found in the piston of the common internal combustion engine, on its own the piston is a very unoriginal device, a weighted cylindrical object combined at a flexible joint to a fixed shaft. However, within the context of an engine core the piston becomes a lynchpin of the process of internal combustion...without it, it simply would not work...so the question is begged which came first the piston or the engine core. The answer through history is clear, the piston (reciprocating mechanism for transfer of force, the first version of which can be said to be a pile driver which some claims put as being invented 500 years ago. If we want to really be strict a battering ram is a form of human powered piston and those are thousands of years old , as old as siege war fare) predated the core and doubtless the idea for internal combustion could only be given life once the action of a piston could be observed and the details of its behavior lived big in before the grander idea of a combustion block and reciprocally mounted pistons on a crank shaft could be combined to create the internal combustion engine marvel of modern land and sea based transportation. The interesting truth about this act is that the potential for revolution seems fused to what appears to be common and mundane and it is when we fail to dwell on new ways of seeing old things that we miss the opportunity to engineer by living big in little places and potentially sparking innovation.

28 October, 2008

Why businesses move their business....

In light of the nearing US election I thought I'd say something about a constantly stated misnomer regarding the reasons that American businesses are engaging in increasing levels of international business.

It has nothing to do with trying to avoid supposedly high tax rates levied against businesses in the U.S. The proponents of this idea miss a critical aspect of taxation of the goods and services provided by business when comparing business tax rates between companies in the U.S. and companies in other countries.

Businesses that produce products that are sold in countries with VAT (value added tax) are virtually being taxed since the product price that is paid by the consumer is significantly beyond the production + profit markup that the company itself places on its products. Thus businesses in these countries are subject to getting less sales on their products due to the true price that those products are sold for once they hit the consumer. Quantifying the exact impact of the VAT tax on business sales could easily account for any perceived advantage that the base tax rate for those businesses seems to have over American businesses when compared together. However doing this is not easy, some companies may choose to eat the VAT addition in order to gain some market share, others which have no option to foreign markets may chose to reduce the scope and quality of their goods and services to reduce prices and entice customer purchases. The tactics taken by individual companies will vary the impact of VAT. Thus the childish comparison of base corporate tax rates between two companies is beyond naive and is akin to an apples and oranges comparison.

That said, we now have some reasons why a business in a saturating market (meaning their market segment growth is near flat due to steady competition) would want to move to another location. For businesses that must sell products in VAT markets a good tactic would be to move production to places where VAT does not apply OR and even better tactic is to move to where the production costs are so low that even after adding in VAT and profit markup competitive pricing can be achieved to competing products in the VAT applied markets OR finally, they can just move to open up new growth potential in areas that lack either VAT or the high labor costs of production. Ideally, these new markets would be in countries that have lower standards of living compared to the source country, the reason is that physical products are usually assembled by people and the prices people charge for their labor is inversely proportional to the market of labor available in their local region. If VAT tax is absent even better, if there competitors have not yet discovered the market better still. This is what businesses realized in the western countries over the last 40 years as they watched the standard of living in other western countries continue to rise. It rose to the point that production costs for various products inside the countries were dwarfed by the labor costs of individuals required to produce the products. Examples range from the textile industry, the automotive industry and the consumer electronics industry in the U.S. In short products that are produced in high volume but require a great input of human labor tend to be shipped to where *the cost of labor* is cheapest, as labor costs form the majority of production costs for such products. It is only a shrewd business manager who sees the option for externalizing production to reduce labor costs and therefore reduce manufacturing costs and be able to return a higher profit even in markets with VAT, as the obvious choice.

So don't buy the nonsense that politicians spew about taxation, businesses will always seek to reduce their costs and the fact that other nations have different labor and tax laws is only something to facilitate potential cost reductions for operating businesses. American businesses don't write into their charters a requirement to be patriotic to the origin country , nor should they, by doing so they would restrict themselves from critical business opportunity by chaining themselves to higher production costs and lower profit margins. As the rest of the world builds up its infrastructure and expertise in banking, manufacturing and technology to match that of the west the parity of labor costs will necessitate that people increase their value relative to the market in the only way they can, by increasing their knowledge. Those with increased levels of knowledge will be relatively scarce compared to the masses of competing labor (in this case both physical and intellectual labor) and their talents will be reciprocally valued. It is the only way for individuals in developing and developed societies to maintain the standards of living that more of the world will be seeking in the decades to come.

In 20 years the people in China and India will be gnashing their teeth at the fact that outsourcing is increasing to countries in Africa and Latin America as they become the next hot spots of cheaper labor for manufacturing. Past and present is prologue.

22 October, 2008

travel in a genetically enhanced future...

Read below or listen to the podcast:

Travel in a genetically enhanced future.

Future Fact? Present Fiction:

The year is 2417,

The starship "redvector" is in transit to the nearest Earth star system of Proxima Centauri, the first decel. stage has been invoked by the onboard computer as the ship reaches it's 80% way point along the trip to the "New Brooklyn" Colony located on the Southern continent of the fourth planet, named "Quat" which phonetically sounds like "4" when stated in French. When this planet was first discovered and landed on over 150 years previous by the French Centauri Pioneer Expedition, the hope was that the planet would have some vegetation. Earth scientists had long ago determined the precise amount of water on the surface and knew that there was oxygen in the atmosphere roughly approximating the percentages found in the Earth atmosphere but they didn't expect to find a well evolved ecosystem of native living organisms both flora and fauna. All that is historical detail to Afusa O'Reilly, he's lost count of the number of trips he has made to Quat but he does remember his first trip, he left Mars colony on April 28, 2147. If you are astounded at what that says about how old Afusa is, you should not be. You see Afusa is not an ordinary human being like you and me, he has been enhanced by multiple genetic treatments , the first of which he received while undergoing his training as an astro-geological engineer in the Earth Space Administration, he was only 22 back then, the year 2138. The genetic revigorations that he received were standard for astronauts of the ESA at the time. Today, the program is a historical footnote of the ESA's nearly 300 year history because since the invention of full genome vigorations development back in 2032, the entire human population has been undergoing continuous vigoration and adaptation. Human's that will do much of their work in high radiation environments have genetic modifications to withstand the onslaught of radiation and repair cells and genetic damage at rates hundreds of times faster than was possible when Afusa first got his treatments. Human's that chose to enter theoretical astronomy and advanced biogenetics are usually those who have received neuronal density invigoration treatments , giving them artificial synesthesia that allows them to create incredibly complex designs and compute incredibly difficult problems without nary the input of a computer. Afusa received several courses of neuronal density invigoration in his days of training, if he lived in the 20th century he would be worshipped as a God among men.

Compute pi to the 1,000 place ? He could instantly beginning reciting it.
Instantly count a random collection of items? He can instantly blurt out the answers.
Determine the precise notes played in a piece of music played to him for the first time? Afusa still can recall music he heard when he was NA: 26 over 200 years ago.

And then there are the physical benefits of vigoration, the increased rate of cellular repair has slowed down the aging process to the point that humans (with periodic 50 year revigorations with a synthesized copy of their own stored genome from the very first time they underwent the treatment) are essentially immortal. There is one aspect of the trip to Quat that is new to Afusa every time and that is the approach to the 6th planet of the Centauri system, a massive gas giant with a radiant blue red atmosphere. He sits in the observation Hall and smiles as the ship slowly arc round the massive planets gravity well , getting a slight gravity assist as it rounds the horizon and reveals the distant centauri sun. No matter how many times he sees it, Afusa just loves the view. As he stands there gazing at the spectacle one would be hard pressed to guess his physical age. You see, because he has received regular invigorations since joining ESA he has an exceptionally great level of genetic preservation, his gvp score is rated at 99.348% by the ESA doctors, meaning that in the 279 years that have elapsed since his first revig. he's aged only a fraction of a few days as far as his cells can tell. To him these facts are insignificant realities of life in the 25th century, right now all he can think of is the feeling of cool water over his body when he jumps into the southern ocean, the "red vector" has been 16 years in transit to Quat and Afusa is just dying to experience more water than the few gallons that are allowed per shower on the ship. His smile betrays his thoughts, "16 years since I took a real bath but this view is more than worth the wait."