Category: Business

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The Difference Between Good And Bad Organizations

seems like some place i know.

Me: “Do you know the difference between a good place to work and a bad place to work?”
Steve: “Umm, I think so.”
Me: “What is the difference?”
Steve: “Umm, well . . .”
Me: “Let me break it down for you. In good organizations, people can focus on their work and have confidence that if they get their work done, good things will happen for both the company and them personally. It is a true pleasure to work in an organization such as this. Every person can wake up knowing that the work they do will be efficient, effective, and make a difference for the organization and themselves. These things make their jobs both motivating and fulfilling.
“In a poor organization, on the other hand, people spend much of their time fighting organizational boundaries, infighting, and broken processes. They are not even clear on what their jobs are, so there is no way to know if they are getting the job done or not. In the miracle case that they work ridiculous hours and get the job done, they have no idea what it means for the company or their careers. To make it all much worse and rub salt in the wound, when they finally work up the courage to tell management how fucked-up their situation is, management denies there is a problem, then defends the status quo, then ignores the problem.”
via The Difference Between Good And Bad Organizations.

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The secret to the Uber economy is wealth inequality – Quartz

The new middlemen
There are only two requirements for an on-demand service economy to work, and neither is an iPhone. First, the market being addressed needs to be big enough to scale—food, laundry, taxi rides. Without that, it’s just a concierge service for the rich rather than a disruptive paradigm shift, as a venture capitalist might say. Second, and perhaps more importantly, there needs to be a large enough labor class willing to work at wages that customers consider affordable and that the middlemen consider worthwhile for their profit margins.
Uber was founded in 2009, in the immediate aftermath of the worst financial crisis in a generation. As the ride-sharing app has risen, so too have income disparity and wealth inequality in the United States as a whole and in San Francisco in particular. Recent research by the Brookings Institution found that of any US city, San Francisco had the largest increase in inequality between 2007 and 2012. The disparity in San Francisco as of 2012, as measured (pdf) by a city agency, was in fact more pronounced than inequality in Mumbai (pdf).
Of course, there are huge differences between the two cities. Mumbai is a significantly poorer, dirtier, more miserable place to live and work. Half of its citizens lack access to sanitation or formal housing.
Another distinction, just as telling, lies in the opportunities the local economy affords to the army of on-demand delivery people it supports. In Mumbai, the man who delivers a bottle of rum to my doorstep can learn the ins and outs of the booze business from spending his days in a liquor store. If he scrapes together enough capital, he may one day be able to open his own shop and hire his own delivery boys.
His counterpart in San Francisco has no such access. The person who cleans your home in SoMa has little interaction with the mysterious forces behind the app that sends him or her to your door. The Uber driver who wants an audience with management can’t go to Uber headquarters; he or she must visit a separate “driver center.”
via The secret to the Uber economy is wealth inequality – Quartz.

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Nix Nolledo: 'Xurpas is just the beginning'

Nice!!! Hoping this is the first of many!

To our friends, family, our underwriter, our investors, our partners, the PSE board and management, the SEC, and everyone who helped us through this journey. Good morning.Today is a day for thanksgiving, and a day for celebration. Today, we mark this occasion with humility and joy, knowing that we started with a dream of creating a mobile tomorrow. Today, Xurpas officially enters the Philippine Stock Exchange as “X”, on the backs of our hopes, hard work, and an initial investment of P62,500.I still remember the first Xurpas office, it was my father’s tiny apartment. We brought our computers from home and had no money to spend on new office furniture. We ate canned goods and rice to save our money. Raymond, Andy, and I poured all of our savings into this venture, armed with our skills and our aspirations of building a better future.The future has arrived. With more than 110 million mobile subscriptions in the market, Internet access reaching 40 percent of our population, and smart phone penetration about to hit half of all mobile subscribers, the future could not have looked any brighter. We’ve waited 13 years for this moment.
via Nix Nolledo: ‘Xurpas is just the beginning’.

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Xiaomi, Not Apple, Is Changing the Smartphone Industry

However, looking at the full extent of Xiaomi’s business model reveals just how different – and how disruptive — it is. For starters, unlike Apple, Xiaomi is not targeting premium customers; it’s mostly teens buying those high-quality phones, and hardly at a premium, since Xiaomi’s prices are at least 60% lower. A neat trick. How does Xiaomi pull that off?
To sell high-quality cell phones at so low a price, Xiaomi keeps each model on the market far longer than Apple does. On average, a new version of a phone is launched every 265 days in the industry – down from 345 days in 2009. But Xiaomi doesn’t renew its product for two years. Then, rather than charge high prices to cover the high cost of state-of-the-art components, Xiaomi prices the phone just a little higher than the total cost of all its components. As component costs drop over the two-year period by more than 90%, Xiaomi maintains its original price, and pockets the difference. Apple, on the other hand, collects its highest profits with the introduction of each model and needs to come up with new model after new model to keep those margins up.
When you consider how much easier it might be to profit from plummeting component prices than from continual new feature development (which sooner or later will likely overshoot the needs of most cell phone customers in any event), the disruptive potential of the model becomes clear.
via Xiaomi, Not Apple, Is Changing the Smartphone Industry.

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Larry Page, Sergy Brin Are Lousy Coders – Business Insider

It turns out the developers most responsible for building the Google.com that quickly became the Web’s most powerful company are two guys you’ve probably never heard of.
The first is Urs Hözle. According to one early Googler quoted by Edwards, Hözle was “the key” to Google’s early success.
Edwards writes, “Enough engineers sang his praises that this book could have been written entirely as a hagiography of Saint Urs, Keeper of the Blessed Code.”
The second is Jeff Dean. Edwards writes that “Jeff pumped out elegant code like a champagne fountain at a wedding.”
“It seemed to pour from him effortlessly in endless streams that flowed together to form sparkling programs that did remarkable things. He once wrote a two-hundred-thousand-line application to help the Centers for Disease Control manage specialized statistics for epidemiologists. It’s still in use and garners more peer citations than any of the dozens of patented programs he has produced in a decade at Google. He wrote it as a summer intern in high school.”
via Larry Page, Sergy Brin Are Lousy Coders – Business Insider.

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The unbearable B-ness of software | Michael O. Church

I’m not Jack Welch’s biggest fan. For one thing, he invented the “rank-and-yank” HR policies that literally decimate companies. I don’t disagree with the idea that companies would improve their health by letting go 5-10 percent of their people per year, but I think the discovery process involved is impossible and often politically toxic. There is, however, one thing he’s said that I think has a lot of value: “A players hire A players; B players hire C players“. His point is that if you have mediocre management, you’ll actually end up with terrible employees. I would say it’s not limited to hiring only. A players make more A players. They teach each other how to be better. Not only that, but they raise the potential for what an A player can do. B players don’t have the foresight or “ownership” mentality to mentor others, and produce non-productive C players.
via The unbearable B-ness of software | Michael O. Church.

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This Woman's Revolutionary Idea Made Her A Billionaire — And Could Change Medicine – Business Insider

A Billion Dollar Idea
Holmes dropped out of Stanford at 19 to found what would become Theranos after deciding that her tuition money could be better put to use by transforming healthcare.
Traditional blood testing is shockingly difficult and expensive for a tool that’s used so frequently. It also hasn’t changed since the 1960s.
It’s done in hospitals and doctor’s offices. Vials of blood have to be sent out and tested, which can take weeks using traditional methods, and is prone to human error. And of course, sticking a needle in someone’s arm scares some people enough that they avoid getting blood drawn, even when it could reveal life saving information.
Holmes recognized that process was ripe for disruption.
It took a decade for her idea to be ready for primetime, but now it seems that her decision to drop out was undoubtedly a good call. Last year, Walgreens announced that it will be installing Theranos Wellness Centers in pharmacies across the country, with locations already up and running in Phoenix and Palo Alto. And Holmes has raised $400 million in venture capital for Theranos, which is now valued at $9 billion (Holmes owns 50%).
The other two 30-year-olds that are just a little bit younger on Forbes’s List, Facebook founder Mark Zuckerberg and his former roommate, Facebook CEO Dustin Moskovitz, also have access to a wealth of information about people — but their data is less likely to save a life.
via This Woman’s Revolutionary Idea Made Her A Billionaire — And Could Change Medicine – Business Insider.

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Why Amazon Has No Profits (And Why It Works) — Benedict Evans

Amazon has perhaps 1% of the US retail market by value. Should it stop entering new categories and markets and instead take profit, and by extension leave those segments and markets for other companies? Or should it keep investing to sweep them into the platform? Jeff Bezos’s view is pretty clear: keep investing, because to take profit out of the business would be to waste the opportunity. He seems very happy to keep seizing new opportunities, creating new businesses, and using every last penny to do it.
Still, investors put their money into companies, Amazon and any other, with the expectation that at some point they will get cash out.  With Amazon, Bezos is deferring that profit-producing, investor-rewarding day almost indefinitely into the future. This prompts the suggestion that Amazon is the world’s biggest ‘lifestyle business’ – Bezos is running it for fun, not to deliver economic returns to shareholders, at least not any time soon.
But while he certainly does seem to be having fun, he is also building a company, with all the cash he can get his hands on, to capture a larger and larger share of the future of commerce. When you buy Amazon stock (the main currency with which Amazon employees are paid, incidentally), you are buying a bet that he can convert a huge portion of all commerce to flow through the Amazon machine. The question to ask isn’t whether Amazon is some profitless ponzi scheme, but whether you believe Bezos can capture the future. That, and how long are you willing to wait?
via Why Amazon Has No Profits (And Why It Works) — Benedict Evans.

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Everyone can fly but Southeast Asia's budget airlines are cannibalizing the industry- Nikkei Asian Review

I remember an article/interview written by Warren Buffet saying how on aggregate airlines have no net profit over the lifetime of airlines. This has always stayed with me. Some business models are simply too unstable to be profitable for the long term. This was the reason I never subscribed to the Cebu Pacific IPO. Airlines are simply not good business. Of course there is the outlier in each business but look at all our airlines in the Philippines they are all basically the same.
 

     But AirAsia seems to be suffering from a permanent structural problem, too, one that it hopes to fix by linking Southeast Asia with Japan.
An airline’s financial health is usually gauged by looking at its revenue per available seat mile. The RASM index is obtained by dividing operating income by available seat miles, which are calculated by multiplying available seats by the number of miles a carrier’s jetliners fly during a designated period. AirAsia’s RASM slid 7% in 2013.
AirAsia, founded in 2001, has continued to grow by wooing passengers from existing airlines with fares that at one point were more than 50% lower.
All the bargains AirAsia has been handing out have contributed to Malaysia Airlines’ financial crunch. AirAsia took to the skies with the marketing slogan “now everyone can fly,” but its dominance of the budget airline market lasted only a decade.
A week after Fernandes hugged Mikitani in front of Japanese reporters, Azran Osman-Rani, CEO of AirAsia X — the AirAsia group’s mid- and long-range flight operator — told The Nikkei that his carrier intends to double sales with flights to and from Japan in the next three years.
According to the CAPA — an independent provider of market intelligence, analysis and data services — budget airlines’ share of Southeast Asia’s aviation market on a number of seats basis grew to slightly less than 60% in 2013, almost double that of two years earlier.
Fare-slashing will probably continue; there is really no other option for a budget carrier. And the industry could end up cannibalizing itself.
Consider that the 2013 net profit of Philippines-based Cebu Pacific Air declined a whopping 85%. Or that Singapore-based Tigerair closed its Indonesian unit, Tigerair Mandala, on July 1.
Are you getting the picture?
via Everyone can fly but Southeast Asia’s budget airlines are cannibalizing the industry- Nikkei Asian Review.