It's a smallworld after all…

I recently read an article about how more and more people are using their smartphones to scan barcodes in stores, then buying items online at much lower prices.  I’ve been doing this for years, but the technology has improved that this has now become mainstream.

So what are stores to do in order to compete?  They can’t have the same prices as Amazon or NewEgg – retail costs more to run than mail order.  Yes, they offer instant gratification, but with more nimble supply chains, most items can be delivered overnight and most purchases can wait that long.

So, I predict that next year you are going to see model proliferation.  Large retail stores will have their own model numbers that are unique to them.  In reality, the specifications between a generic (mail order) and retail model will be slightly different – just enough to confuse people.  Its a classic move.  Market confusion leads to the ability to charge higher prices – just look at the airline industry and all of the various surcharges.

The stores that will really hurt are the small specialty retailers that don’t offer enough volume to justify their own model numbers, so they’ll have to compete directly with the mail order stores.

The retail stores will be sure to spin this as a positive for customers – that they have negotiated “special models” with the suppliers that offer enhanced features and functionality, when in reality, they are simply charging more for essentially the same items.

So you heard it here first.  I predict that by the next holiday season, model number proliferation will be widespread.

Too expensive in Sweden....

It used to be that when you bought something, you owned it.  Gillette changed the world, showing that you can lure people in at a low price (the razor) and then extract huge amounts of money from them in the long term (the blade).  Companies that make inkjet printers jumped on this model, practically giving away printers and then charging ludicrous amounts money for ink ($3000/liter).

But there is another side to this as well.  Companies that sell high-end goods force you to buy filters and cartridges for them in order to keep them running smoothly or to keep the warranty active.  No one wants to risk a several hundred dollar espresso maker over a “cheap” filter.

But these costs add up. As I sat awake with my daughter last night, I started to add up all of the things in the house that need replacement items…

• Cleaning cartridge, Braun Electric Razor, replaced monthly, 2.22 kr/day
• Claris Water filter, Krups espresso maker, replaced bi-monthly, 3.16 kr/day
• Kaz demineralization cartridge, Vicks humdifier,  1.65 kr/day
• Tommee Tippee diaper cartridge, diaper pail, circa 20 kr/day
• Water filter, Cat-It drinking fountain, circa .5 kr/day
• Philips Toothbrush heads, Sonicare toothbrush,  1.55 kr/day

All told, at Swedish prices, that comes to 29.08 kr/day (granted, 20kr of that is short term for diaper bags)

The scary part is that most Swedes pay these prices.  There is so little competition on the market here that unless you are willing to purchase from abroad, you have no real choices.  Thankfully there are companies that are changing the game.  Take the diaper cartridges.  In Sweden, you pay about 120 kr for a cartridge.  Amazon.co.uk sells the same (with free shipping) for 31 kr.  The water filter for our espresso machine costs 200 kr here.  I can buy them in the USA for 83 kr each.  Sonicare toothbrush heads cost 93 kr each in Sweden, and only 66 kr in the USA.

All told, by buying things abroad, I reduce my costs of 29 kr per day down to about 10.7 kr (and only 6 kr once the diapers are done with).

Over the course of the next year, I’ll save about 6700 kr ($1000 USD) by venturing outside Swedish borders.

And that is why my suitcases are filled with really strange things every time I fly back from the USA…

Why do we work in jobs that are not right for us?  My theory is that fear compels us to do so.

Job selection is a balance between the position that is best for us at an emotional level and the position that is best for us at an economic level.  Most of us work in positions that do not fulfill all of our emotional needs because those jobs don’t provide the level of income to support us, so we trade-off emotional health for economic health.

So my gift to my daughter is to start her retirement savings.  Yes, she is only ten days old, but with the magic of compounding interest, tax-free growth, and a very long investment horizon (70+ years), I can put my contributions to her retirement in the most risky, but highest reward, investment options.

Most of us start saving for our retirement in our 30′s and 40′s, giving us only 30-40 years of growth time for our investments.  A 12,000 kr (about $1,700 for you Yanks)  annual contribution invested at 10% per year for 30 years yields 2,400,000 kr.  A nice sum, but not nearly enough to retire on (especially considering inflation – a 2% inflation rate makes 2,400,000 worth  about 1.35m in present value ($190,000).

Compare this to a 12,000 kr annual contribution for 70 years.  At 10%, this grows to 113 million kr.  Even discounting for inflation, that’s 29 million kr in present value terms ($4 million).   If the investment can make 12% a year, 113 turns into 345 million kr, or 88 million kr in present value ($12.2 million).  Even assuming an 6% return, that 12,000 kr annual contribution grows to 13 million kr over 70 years, or 3.3 million kr ($460,000)  in present value.  Not quite enough for retirement, but enough to make a big difference in the quality of it.

So my gift to my daughter is the foresight to save for her retirement, even in as she sits here in my lap only 10 days old.  With her retirement secured, she will be able to work in the jobs that she wants for her entire life and not have to worry about whether she will have enough to retire (or worry if the public pension system will go bankrupt).

Now I just need to keep this secret from her for the next thirty years or so

I own the smallworld.nu domain.  Prior to this, I owned and used renzema.org, which I retired in 2008 (after 13 years of use) due to too much spam.  I now have a fairly effective method of controlling spam.  When I sign up for an account at a website, I use the domain of the website @ smallworld.nu, so if I sign up for an account at hotmail, my account name would be hotmail.com@smallworld.nu.

All email going to @smallworld.nu get directed into my personal account.  This allows me to easily filter it, and most interestingly, see who is spreading my address.

When we were looking at options for our wedding registry, we created a trial account at seeyouthen.com.  A few months later, I started getting email at the seeyouthen.com@smallworld.nu email account.  I emailed the owner of the site, who vigorously denied selling my address or being hacked.  He later backed down and said that a company that they had contracted with to send reminders (to try to get me to become a paying member) had been hacked.

The result?  I get about 200+  emails per month to seeyouthen.com@smallworld.nu  That’s almost ten emails per day from a single hacked account.   Needless to say, any email sent to this address goes direct to the bin.  Other notable offenders are collegehumor.com and sharefile.com.  Both of these companies claim that they did not release my information, therefor suggesting that they were hacked.  In fact, every single piece of spam that I get today can be tracked back to one of these three sites.

So why is this important?  Most people use just a few passwords.  But how many times have you either forgotten  your password or been sent a registration confirmation letter with a sentence like, “Hi Bob, thank you for signing up with domain.com.  As a reminder, your username is bob, and your password is letmein123.”

This is the mark of amatuer hour.  If they sent you your password in cleartext (not encrypted), that means that it is not encrypted on their server.  This means that if their server is hacked, then the hacker has access to not only all of the usernames and email addresses, but all of the passwords as well.  This is very scary.  Given that most people have a generic username and password across the web, how hard would it be for them to become you?  The way to recognize (not foolproof, but it indicates that they take security a bit more seriously) encrypted passwords is A) no password in the welcome email, and B) when you forget your password, you are sent a link to reset your password rather than receiving your password via email.  If you are ever sent your password via email, it is not secure.

It probably won’t do much good, but when you receive your password via email, send an email to their support desk and ask them why they don’t encrypt their passwords.  Refer to this posting if they claim that they do.  It’s just sloppy programming and poor practices that lead to these situations.

Protect yourself.  At the very least, use a different password for financial sites.  If you keep all of your passwords in a file, encrypt that file (even using the basic Word or Excel password protection is enough for most people).

Think you’re secure?  Is your password on this list?  Think again…

Update August 9, 2010: Within 12 hours of posting the above text, I received two spam emails to hotmail.com@smallworld.nu.  This is the only location on the web that this email address exists (I don’t use hotmail).  I’m not sure if people are reading my blog, but the computers are!

Why are some shows gripping while others don’t hold your attention for more than a few episodes (and sometimes not even that long)?  As I wait for the baby, I have had ample time to sample some older and new TV series.  It seems that there are a few reasons that shows succeed.  Sadly, first and foremost is eye-candy (both the human and special effect types).

However, eye-candy alone is not enough.  Nor is acting ability.  It is the plot and the intelligence of the writing that will keep a series alive for many years.

One show that particularly interests me is MASH.  Here is a show that started out as a standard comedy.  Over the course of 11 years, it morphed from comedy into social commentary (which is what good comedy is – just look at Jon Stewart’s The Daily Show) .  Early seasons focused on the relationships between Frank and Margaret, comedic, but hardly gripping.   Whereas most shows flounder when the original producers leave, MASH is one of the few that got substantially better.  Midway through the run, Burt Metcalfe and Alan Alda took over production and morphed MASH into the classic show that it is today.

By the time it finished, MASH had covered death, gender equality, religion, the futility of war, race relations, mental disease, and many, many other topics.  How many modern shows would dare to take on one of these topics, let alone all of them?

Few shows age well.  While the stories can be timeless, I can’t really see people watching Happy Days, Cheers, Taxi or Friends 20 or 30 years from now – the fashion and cultural references will simply be too dated for people to relate and the content will be replicated in more-current shows.  However, by costuming the crew in olive-green (sadly, a timeless color) and covering universal themes, I suspect that my children will still be watching MASH reruns.

Note: If you buy the DVD, turn the laugh-track off.  It really ruins the show.

It’s summer in Sweden and the flea markets (loppis) are in full swing.  They are not the same as in the USA.  Here they have a set opening time (typically 30-60 minutes before sales begin).  People enter, browse, and place bids.  At the start of sales, items that have been bid on go to the highest bidder (and sometimes you get a verbal bidding war on desirable items).  However, most things are sold for 10-50 kr in the first hour after sales begin.

The items that are sold are donated by the local community and they typically benefit the local sports association.  You find everything, including plates, garden tools, old TVs, beds, sofas, tables, satellite dishes, windows, doors, kitchen appliances, etc.  Most of it is crap, but you do make some real finds.

Having gone to these markets for several years, I have noticed that each year the quality of the merchandise is going steadily downward.  I attribute this to two reasons.  First is the rise of Blocket.  Blocket is to Sweden what Craig’s List is to the USA, except we have to pay money ($2-10 per ad). In 2008, Blocket listed more than $23 billion of goods for sale (and Sweden has a population of only nine million) and the majority sold within the first week.   As more people become internet savvy, they are selling high value items on Blocket rather than donating them.

The second reason is my own theory, but I think that it is sound.  For many years, foreigners have come to the markets as well.  They are mainly from Poland, but I have seen a few Lithuania as well this year.  Historically the people from Poland would buy up the leftovers for dirt cheap (if it is not sold, it is literally bulldozed into a container) and then resell them back home.  However I have noticed that in the past year or two, the Poles are getting more aggressive.  They are bidding on items in the opening rounds and buying higher quality items.

I have no problem with this, and when you see the cars that they are driving compared to the ones that the Swedes drive, you can easily understand why.  However, this creates a bit of a long-term problem.  One interesting thing at the markets is that you see the same things there every single year.  People buy something one year and drop it off the next.  Of course the system is not completely closed, but there is a fair amount of recycling going on.  Even with Blocket, most items stay in the general geographic area.

Add in foreigners to the mix, and the system breaks.  You take what is an essentially closed system and then pull out the good material.  When the foreigners were buying things that would otherwise be scrapped, the system could support it.  When they are buying (and more importantly, exporting) items that would otherwise be put back into the system in a few years, the long term sustainability of the system falls into doubt.

Market attendance is sustained not by the junk (98%), but by the rare treasure (2%) that is found. However,  if the treasures migrate out of the loop (to foreign lands), there is less incentive to go to the markets.  While 2% of the items may be treasures, new treasures entering (compared to existing treasures that return) are very low (and Blocket has helped to further reduce the new treasure rate of entry).

Given a few years time, I suspect that the markets will not exist any longer – there will only be junk, people will not donate their treasures because they themselves will no longer attend (out of sight, out of mind).  This will be a real shame, as the local sports clubs rely on the funds from these markets (they can easily raise $20,000).

Just an example of where two separate phenomena have interacted to (in the not too distant future) kill a cultural institution.  Who knows, maybe in a few years you will find Swedes going to Poland to buy up their junk?

Out in the field this week.  The entire region is without power due to electricity shortage.  The local hotel has an “Executive Wing” where we are staying.  “Executive” has a whole different meaning here – pillows without pillowcases, no towels, mosquito nets with holes, hot water delivered in a milk jug, and a 15 minute walk through the mud to the main section of the hotel where meals are served.  But it could be worse, right?  That’s right – it can be – the fish that I had for dinner was rotten and somehow battery acid got into my bag and ruined a good portion of my clothes!  Alas, life goes on, and the scenery is so amazing that the hotel and clothes are just small problems.

The region around here is beautiful.  The people who live here don’t have any idea of the value of the view that they have.  We are literally on the side of a volcano – this is the area of Uganda that suffered from mudslides earlier this year.  There is so much water here.  It oozes from the ground in a million little springs.

The children are fantastic.  As we are driving along, all I hear are hundreds of kids yelling “Mzungu” (white person) as we pass.  It is funny how a word can have so many different meanings.  In Kampala, mzungu is almost synonymous with “Give me money”.  Out here, it is more innocent – more just recognition that I am different somehow.

I’ve been to two different training sites now.  It is really amazing – people come out in their best clothes – we had a man in a three piece suit (complete with gum boots) yesterday.  These are people that earn $2-3/day.  The site yesterday was quite literally on the top of a mountain, 45 minutes up a dirt road.  Although there was a classroom, we held class outside under a tree with a whiteboard on a table– truly the Marlboro College spirit.  The training that I am at today is more formal – in a classroom with pieces of paper taped to the wall.  In my humble opinion, yesterday was far more effective.

Back in 2002 when I started business school, one of my professors asked the class two questions – How many of us had been called arrogant, and how many of us saw that as a good thing.  Unsurprisingly, many hands when up for the first question.  Only one hand went up for the second.

I’ll admit, back then I had a different definition of arrogance, and it was linked closely to self-assuredness.  Upon further investigation with several dictionaries, I came to the conclusion that arrogance is a fully negative term.  It has no place in civilized society.  The problem of arrogance is so old that in the form of Pride, it is one of the seven deadly sins.

A lot has changed over eight years.  Although I am still called arrogant from time-to-time (I suspect most people with MBAs are), thankfully I hear it less and less.  To me, this symbolizes that I have grown as a person and I take pride in that (oops! – there’s that sin again).

Living in Sweden is a very effective way of combating arrogance.  There  is a deep-seated belief that everyone is equal – it stems from the Law of Jante.  Being exposed to this mentality for over five years is very effective at knocking one off of one’s pedestal, and that’s a good thing.

I’m really surprised by the actions of the director of a local non-profit (in Uganda).  Granted, he is not a Swede, but one of the stated goals of his organization is to help empower people…

• When entering his office, there is a requirement placed upon all to sign in/out laptops according to the procedures of their host company.  The director seems to feel that he is above this and refuses to give his serial number.  This puts the security guard in a very difficult position.  Does she force the issue, or potentially lose her job because she does fulfill her the responsibilities of her position?
• The host company is kind enough to let the non-profit use one of their conference rooms part of the time.  According to the agreement negotiated with them, there is a physical sign up sheet (and instructions) on the door. When booking the room, there is a requirement to put both the meeting name and the phone number of the organizer.  Directions are posted directly above the signup sheet.  Guess who doesn’t put his phone number?
• He expects that the office manager’s job is to make him his coffee (this one in particular bothers me – always has – even when I was in Colorado).
• Takes telephone calls in the middle of meetings and expects others to just speak over him.

All of these things are little, but demonstrate an attitude that, in my humble opinion, don’t belong at a non-profit where one of the goals is to help empower people.

Showing respect toward the work  of others is the first step in empowerment.

About two weeks ago I put up a post describing my predicament about whether I should return for my final month here.  The process of writing the post was cathartic, and later that same day I firmly decided that I would stick it out.

Fast forward one week: a friend of mine had a meeting with her supervisor.  In that meeting, he stated that she did not know her own limitations (among other things).  I consider myself a pretty good coach, and also quite self-aware.  For me, the easiest way to help people is to pull from my own experience.  In the aim of helping her, I was forced to examine my own situation.  Through this introspection, I realized that I am working at my limitations.  I’ve learned a lot here, but removing myself from the situation is probably the best thing that I can do at this point.

When I came here, I was told that my primary goal (outside of my deliverables) was to build the capacity of my supervisor and help bring better systems into the office.  I have succeeded on the second point (process management has started to gain some traction, people have a greater understanding of why project management is important, meeting times have a new importance, etc) but I have failed in regard toward building capacity in my supervisor.

On rare occasions in my life, there are some people that I just can’t get along with.  Thankfully, I have only encountered a few of these people in my life, as the situation is never fun.  Unfortunately, in the current case, this person is my direct supervisor.  Building capacity is a two way street – I can’t teach if the other person isn’t open to learning.  I am of the opinion that the personality conflict is so great as to blind her to any help that I can give.

I view this as a personal failure, however if I can’t be effective in my primary role here and my continued presence serves as a source of stress for her, then there isn’t much point in my staying.  And to be honest, I’m looking forward to seeing my wife’s belly grow.

I’ve learned a lot here.  I came here originally thinking that I wanted to work for a non-profit organization in the future.  I have witnessed lack of resources (try finding a pen in this office, plus we constantly play musical chairs because there are more staff than chairs), conflicting agendas, lack of clear leadership, and most importantly, lack of clear mission.  Even worse, I realize that these problems are endemic to the sector – from what I can tell, this program is among one of the better run!  I have come to the conclusion that I would never be able to thrive in this type of environment.  I’m used to having the tools that I need to get a job done and although I can deal with some of these problems, combined they create an unworkable situation.

I’ve also been able to try on the role of a consultant.  I’ve had opportunities in the past to be a consultant, but I have always passed on them, preferring to work for the company actually making the product rather than being a sideline coach.  There’s nothing more depressing than spending a large amount of time on a report only to have your report thrown in the circular file because it conflicts someone’s view of the world (something that happened to my team in grad school when we found a way to save a company a large amount of money by throwing out their home-grown distribution system and outsourcing it to UPS).  I also don’t like the idea of the consultant that fills in for a regular employee as it creates a conflict of interest – where do loyalties stand?  With the consultant’s employer, who wants billable hours, or with the client, who wants the project complete?  I don’t think that these situations are healthy.  After this experience, I am most certain that I will not be pursuing consulting.

So, a little bit of introspection.  More interesting things next time.

Lack of infrastructure is a known problem in developing countries.  Some countries, such as China and India, are tackling this problem head-on.  China is building both rails and roads at a blistering rate around the country – even building a rail line to Tibet over permafrost using some of the same techniques that Alyeska used to build the Trans-Alaska Pipeline System.  India is on track to build 30,000 miles of roads by 2012.

Here is Uganda, where the weather is stable, main roads are in reasonable shape and other roads are being built and rehabilitated.  When travelling long distances, you are constantly slowing down for every little town.  Each town/village has many sets of speed bumps, effectively doubling travelling time.  Where the USA and many other countries build bypasses around cities, this idea has not yet reached here.  Kampala has no ring road – to get through it, you need to go through the center of town, a process that can take 2-3 hours if you are travelling at the wrong time of day.

But infrastructure is more than roads.  It also includes power, water, sewage and telephone.

Uganda is lacking in power.  It has hydro plants, but the water levels are low and they are operating at about 50% capacity.  Diesel power plants are powered up to meet peak capacity, an expensive option.  A new 250MW hydro plant is being built, but even that will not bring supply up to demand levels.  This will compliment the 300MW of currently installed capacity.  Estimates are that Uganda will need over 2000MW of capacity within 15 years.  Currently only 3% of the population has access to the electrical grid.

Where grid connections exist, people pay about $0.15 per kilowatt hour   In comparison, using kerosene for fuel incurs a cost of $5-20 per kilowatt hour.  In other words, $1 of grid electricity buys you over 400,000 lumen of light.  $1 of kerosene buys your 875 lumen of light.  To put this in perspective… Running a 20 watt CFL for two days will cost you about $0.15.  For a Ugandan to receive a similar amount of light, they would pay between $5 and $20.  This is a huge structural obstacle that keeps a lot of people in poverty.  A family can can easily spend 20% of their income on lighting.  My power bill (in Sweden) runs about $100 per month (more than half being tax), and includes a refrigerator, several computers and a large TV and stereo.  If I look at only the lighting portion of the bill,  assuming that I have six 20 watt bulbs on for six hours per day, my lighting cost per month is about $3, or about 0.1% of my salary.  A far cry from 20%.

Internet is a not commonly called infrastructure, but given how reliant companies (and expats) are on it, it probably should be.  In a typical developed country, people have Internet at work and at home.  Home speeds tend to be faster (at least in Sweden).  In Uganda, the connection at our office is a magnitude faster than I can get anywhere else (it probably helps that we are sitting in the offices of one of the mobile phone providers).  At home, our apartment complex shares 0.3 mb, and with some other apartments running torrents, the effective speed is a small fraction of that.  Work supplies me with a wireless dongle (EDGE – no 3G here yet) that runs at about 0.1 mb, or basically double the speed of dialup.    Upload speeds are even slower.  If I want to upload a 10mb image to my online photo gallery- about 20 minutes.  At home in Sweden?  About 30 seconds.

So why does this matter in a country where 97% of people don’t have power?  It goes to productivity.  Since people don’t have access to high speed internet (or even any internet) at home, they use it in the office.  Even I am guilty of this.  I feel a need to stay connected to the world, and this occurs through the internet.  When I need to get serious work done, I leave the office and go to the coffee shop, where I only have access to the wireless dongle.  Taking away high speed access results in higher productivity.  Maybe I am just weak, but looking around the office, at least I am not alone.

Further, the internet acts as an enabler of commerce.  This past weekend I had an incident with a banana tree, resulting in a broken Land Cruiser window.  In Sweden, I can search all of the junkyards in the country about 30 seconds using the skrota.se website.  Within five minutes, I can find the lowest cost replacement and have it delivered the next day.  Here, it required the effort of two people for a day and a half to find a reasonably priced replacement.  I know that labor is cheap here, but five minutes vs. 2+ days of labor just doesn’t compare (sadly, when you do the math including the cost of labor, the difference is not that large).