I'm Lovin' It 2.0

I just ordered an Egg McMuffin from this friendly person.   No hassles, no misunderstandings, no line...minimal banter.  

The new American workforce.

No vacations, infrequent maintenance, no healthcare, no payroll taxes, no inter-office romances, no world star hip hop videos.

According to "da innernets', there are McDonald's in 118 countries and it employs over 1.7 million people.  That 1.7 million is a top tick - going lower from here.

Facebook v GM

Facebook has 5,000 employees and is worth $135 billion.  They made $7 billion in revenue.

GM has 200,000 employees and is worth $55 billion.  They made $150 billion in revenue. 

I understand that people are upset about income inequality but if you can create that kind of value with the help of so few people, in such a short period of time, you are going to get massively rewarded.  

We all want freedom and equality but we can't complain if the market assigns more value to a business that makes it's money when you click on pictures of your best friend's kid than the one that makes cars and trucks. If value creation is how we compensate CEO's in a free market then what are we so upset about?  

If CEO's were compensated based on how many people they could employ, then the system might look different...interesting idea but tough to get shareholders and creditors behind that notion. 

This is no knock on GM really...they make 30% more cars today than they did in 1979 with 66% fewer workers. That is just the results of innovation and technology.  

As labor costs rise, companies are operating with less people and CEO salaries are reflecting their ability to create value for shareholders.  We are all free to try and compete if we think a CEO is getting paid excessively. In our society, we can start our own company and take a smaller cut of the pay if that is what we think will drive value. 

I am not sure how to make it more fair than that. 

I'll bet you $1 million you'll live until you're 100 years old

This bet is not valid for anyone who is already above the age of 60 or left-handed. 

Seriously though.  I will bet you a million bucks that barring you take your own life, or die in a drone strike, you will live to be 100.  In case you are wondering, the current American life expectancy is 79 years -- about 76 years for men and 81 years for women.  By the way, left-handed people supposedly have an average life expectancy about 9 years shorter.

Why would I make such a bet? First, I am convinced that by the time most of us are 100 years old $1 million will not be such a great sum. Extrapolating another 70 years of inflation at 5% and we get about $32,000 in today's greenbacks. 

More importantly, I think life expectancy is going to shoot up. If we believe in exponential growth we cannot discredit the possibility that advancements in medicine and technology can make lifespan go parabolic.

Here is the wiki timeline of medicine and medical technology (link):

Around 1900:  The X-ray gets invented as does aspirin...

50 years later we are using chemotherapy to fight cancer and curing polio...

25 years later we get insulin pumps, LASIK surgery, CT scans...

A few decades more and we have cracked DNA sequencing, created artificial muscles and today there are firms working on 3D bio-printing, which is like printing a new liver after you spend your life drinking bourbon...nice!!! (check out ticker: ONVO...the stock is up about 300% in the past 7 months)

It took us 75 years to go from X-rays to CT scans but only 10 years to go from robotic surgeries to bionic limbs controlled by brain waves. 

Think about what will happen in the next 50-100 years. It is going to be bigger than we can imagine.

The aide of technology and innovation in the medical field will result in the ability to keep our bodies around a lot longer.  Whether you end up looking like RoboCop or Tony Stark you better find something fun to do with all that time you have left on the clock.        

The Anger Gap

I feel like America is angrier than it used to be. People are upset about jobs, crony capitalism, the government, taxes, the list goes on and on. I was watching the documentary Detropia and a lot of the autoworkers were pissed at corporations for cutting pay and moving jobs to China or Mexico.  I don't mean to sound heartless but what did we expect? We kicked our feet up as a nation and got out innovated and underpriced. We got our collective lunch eaten.  

Speaking of lunch, a few years back I was having lunch with an uber smart guy who builds actuarial models for insurance companies. Somehow our conversation steered toward how a lot of Wall Streeters were angry their compensation dropped. The advent of technology in finance made a lot of people obsolete over the past decade.  

He drew a picture on a napkin that looked something like this: 

(Obviously he didn't have different color pens with him)

The thought is that when a new industry or business is discovered, it's easy to add a lot of value early on.  As time passes, competition grows and folks are forced to innovate. If you aren't the one innovating you might be seeing diminishing returns given the same inputs - creating a gap between expectation and experience.   

The gap between what we think should happen and what actually happens is the ANGER GAP. Trying harder or putting in more time only to get the same, or worse, results...sucks. 

To shrink the gap we either need to lower our expectations, or find new ways to add-value.  Neither is easy. No one likes to "CTRL + ALT + DEL" their expectations (part of the motivation to start this blog). Additionally, finding new ways of adding-value means getting out there and talking to customers, stakeholders, competitors. Figure out all the pain points in your industry and find ways to ease them through new products and services. You will be so busy doing this you won't have time to be angry.      

Take a Splice out of Life

For nearly a decade I was a deer stuck staring into headlights, frozen by the barrage of information coming at me from every corner of Wall St (for the record: none of it was inside information).  The financial software applications that occupied my desktop real estate continuously vomited mountains of information, giving me little time to learn about how the rest of the world was being launched into cyberspace.  Having spent a few months away from the streaming stock quotes, bloomberg terminals, and flickering bid-offers, I have discovered just how powerful (and critical) technology has become to businesses and the everyday user. 

It is shocking to see how much influence websites and apps have in changing the way we communicate, make buying decisions, entertain ourselves, educate our children, etc.  Entirely new industries are emerging overnight and staying on top of the countless new outlets is an arduous task to say the least.  Take Groupon for example.  Today, there are apparently some 500 Groupon copycat sites globally and if you gave me a penny for every business I have heard or read about in the past month that aims to be "the Groupon of (INSERT PRODUCT OR SERVICE HERE)," I would have a dollar.  The internet is growing and changing faster than we are able to process it because the content providers are no longer the cartel of tightly knit media elite...the new content providers are (get ready for it).......us!!  And there are a helluva lot more of you and I than there are Rupert Murdoch, Richard Branson, Sumner Redstone et al.   

"User generated content" or "consumer generated media" or whatever you want to call the process of freely posting information on the internet, is changing the way the world interacts as we speak.  It seemed like everyone watched "60 Minutes" with Mark Zuckerberg a couple weeks ago but I gather that few went online to catch "60 Minutes: Overtime" when Lesley Stahl interviewed Chris Cox, Facebook's head of product development. 

I thought this short interview was really thought provoking and it validates why websites like facebook, twitter, groupon, four square, quora, and kiva are in a position to give the power back to the people.  Content that is created by us (particularly by those within our network...i.e. anyone's email address we have) may be richer than content provided by the experts (who we no longer trust?).

The blending of technology and user generated content will create massive opportunity to "splice":  businesses must fuse themselves to the growing stream of information we (as in the collective we) are posting online.  This will allow business to become more competitive, understand their customers, identify new trends early on, innovate, get instant feedback, and the list goes on and on.  I am curious what people think about this short interview.

http://www.cbsnews.com/video/watch/?id=7120112n