RSSJuly 24th, 2008
Why Wall Street Has it All Wrong
I can’t help getting frustrated when I read about the mentality on Wall Street. I do not understand all the talk about valuations, projections, analyst opinions and other BS that is all purely speculation. Did someone forget that projection is another word for guess? Educated guess at best.
Shouldn’t all the brilliant people in this industry be hedging their bets on something a little more concrete than a guess?
Forget creating great products. Forget making a positive contribution to society. Forget providing extraordinary customer service. Analysts and investors force companies to maximize profit at all costs. It is the only number they see. Grow, profit, grow, profit, that’s all that matters. Forget about long-term vision and success, all that matters to these people is next quarter.
There are some amazing companies today, doing great things in their industry. And they all have one thing in common: ideology rules, profits do not. History proves time and time again that great companies are built on solid values, and an ideology that takes precedence over anything else. Profits are simply the end result.
Ricardo Semler puts it masterfully in his book, The Seven-Day Weekend:
“The minute I hear conventional explanations for business practices, like the idea that companies are required to grow, that profit is paramount, I know I’m encountering calcified thinking …
Why do we have to make more money every quarter or face being downgraded by analysts on Wall Street? Because Wall Street needs to guarantee income to pension funds, which in turn finance ever-increasing numbers of retired people? Because it must compensate for too many bad bets on start-ups, dot-coms and mature players that are no longer ready for prime time? Because it has hired too many MBAs who make too much money and drive costs even higher?
None of these is a convincing reason for relentless growth.”
Bottom line, the profit-centerd mentality pushed on public companies by analysts and investors in the past several years has reached an all-time low.
Companies are bigger than ever, thanks to merger after merger and growth for the sake of higher profits. Public perception of these companies is lower than ever, and for good reason. Everyone hates their cell phone provider because the customer service is a joke. Why? Because it’s cheap for providers to outsource customer service to India and infuriate their customers on a daily basis.
Here are a couple real-world examples of Wall Street logic simply not adding up in the last week:
Example #1: Google
Google, a great company with a solid values that guide their business, announced Q2 profits last week. They profited $1.25 billion, up from $925 million last year in the same quarter. Unbelievable, a 35% increase year over year, reporting a profit of $4.63/share. However, since “analysts” had predicted a return of $4.72/share, the stock plunged as much as 12%. Huh?
Example #2: Apple
I’m not ready to call Apple a great company, but there is no doubt they make great products. In Q2 Apple sold an unprecedented number of Macs, 2.5 million to be exact. Not to mention the other phenomenal product offerings that have been leaping off of shelves. Their profits neared a 31% increase over last year. Yet Apple’s stock plunged almost 11% because they only issued $1/share earnings, instead of the “projected” amount of $1.23/share. Are you kidding? Best Q2 in the company’s history and stock goes down double digits?
The attitude on Wall Street (no offense to the street, I love working right next to it) is all wrong, and I would go so far as to say that it (and the media) has had a large impact on the current state of the struggling US ecomony.
I for one will not subject myself or any of my companies to such ridiculous and flawed thinking. Growth is NOT always the answer, and it does NOT always mean a greater level of success. Companies that put values first, profits second, win.
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July 18th, 2008
Summer Reading List
“Summer Reading List” — those 3 words struck fear into my heart throughout grade school. However, now they take on a whole new meaning because I get to read what I want to read! As an entrepreneur and self-proclaimed geek (others tend to proclaim it for me as well), continuing education is the most important part of my work.
Here are some AMAZING reads that get my highest recommendation for your summer reading list …
QBQ! The Question Behind the Question
QBQ is a message that so dearly needs to be heard in our culture. Everyone you know can benefit from this book. In less than 100 pages (about 2 hours beginning to end), Author John G. Miller will change the way you look at personal accountability. Learning from the principles in this book has had a profound impact on my personal AND professional life. I just finished reading it for the second time.
The Innovator’s Dilemma
This is a “research” book from one of the world’s foremost thinkers on innovation. I will warn you, I found myself re-reading about every other sentence. However, the principles and lessons learned in this book are beyond priceless.
Clayton M. Christensen studies various industries, and the disruptive innovations that eventually led to the demise of otherwise great companies (good management, good culture, etc.). The takeaways from this book completely changed my perspective about innovation, and how great companies sustain their edge.
Defensive Design for the Web
This “oldie but goodie” (published in 2004) from 37signals is one of the best books about web development available. They examine “best practices” in how to handle errors and things that go wrong on a website, something that deserves much more thought and consideration in our industry. Their definitive research walks through stuff like error pages, site help, form validation and search. Fantastic book, and for more from these guys, see Getting Real.
Mavericks at Work
I have only read about 25 pages of this book so far, but I know already that it has great wisdom for entrepreneurs. The title could not be more fitting, as it profiles companies that break the rules, and are winning BIG as a result. My biggest takeaway so far, which was first iterated in Built to Last
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July 14th, 2008
Highlights 7/14
7 great links definitely worth a minute of your time on a busy Monday …
An Inside Look at Zappos
There was a must-see story about Zappos on ABC News this past week. I have been enamored by this company since hearing CEO Tony Hsieh talk at SXSW in March. What a great company culture, I hope we can make it out to Las Vegas this year to get the tour in person.
Yahoo Design Stencils
Yahoo just released a really great stencil kit that helps anyone create high-quality wireframes. We use OmniGraffle for all wireframing, which I highly recommend. Other file formats available for the stencil kit are Visio (XML), PDF, PNG and SVG.
10 Questions to Ask Before Using Flash
We get requests weekly to use flash, and very seldom does it really fit the bill. Usually there is a better, much more user-friendly way of presenting content or graphics. Future Now came up with 10 questions that make the decision rather easy.
SEO Guide for Designers
Awesome beginner’s SEO guide for anyone doing web development. Definitely worth a read.
Twhirl - AIR Twitter Client
I am relatively new to twitter, but fell in love with twhirl immediately. It is built with Adobe AIR, is more reliable than twitterific (in my opinion) and also syncs with FriendFeed.
Vertical Centering with CSS
I recently found this article very helpful in trying to vertically center a site within a page.
What was Google thinking?
I’m as big a Google fan as any, but I can’t imagine why they would choose to change their favicon. I was spellbound … a lowecase “g”? I just don’t get it. This article has the scoop …
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July 2nd, 2008
SHOWCASE- Heartprints, Lampion and Andy Andrews
Today I posted three new showcase sites that we launched in the last couple of months. Amazingly, all three sites are for individuals. Two own very successful consulting companies, and one is a renowned speaker and New York Times bestselling author.
Heartprints Adoption
Heartprints Adoption is the company of Sharon Brani, and she is fully dedicated to helping to-be parents navigate the complicated waters of the adoption process. Through many years of experience, she also shares excellent advice and information about adoption on her blog. It was a pleasure working with her, and a company doing such good work for people.
Lampion Consulting
Lampion is the company of Paul Heagen, a seasoned and very experienced corporate consultant. He works directly with CEOs and leaders of major corporations (Verizon, Disney and Cisco to name a few), and helps them communicate better with employees, shareholders and customers through a number of services. Paul is also an author, with a book called Real Owls Don’t Bark available from his website.
Andy Andrews
Andy was one of our very first clients three years ago (still one of our favorites!), and his accomplishments are far too lengthy to begin listing in a couple simple paragraphs. He is a New York Times bestselling author, corporate speaker to virtually every major company you can think of, and more recently has begun blogging (thanks to some gentle prodding from us).
This project was a re-align (for a definition, see this article) from the previous version of the site, improving functionality, focusing on a couple main objectives and moving the whole site to our Springboard content management platform. We could not be more pleased with how it turned out!!
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