Category: economy

  • The case for faster internet

    The case for faster internet

    The National Broadband Network (NBN) is a project designed to deliver faster and more reliable broadband to Australia’s regions. While a good idea, it’s not without its critics and a fair degree of controversy.

    One of the problems the project has is the inability of NBNCo, the company established to build and run the network, to articulate the benefits and scope of the project.

    Last Friday night “John from Condobolin” grilled the Gadget Guy, Peter Blasina, about the project. John’s questions, and Pete’s answers, which can be found at 35 minutes into his program, illustrates the confusion the surrounds NBN and the failure of the project’s supporters to explain the benefits.

    So how should proponents of the National Broadband Network – people like me who believe that high speed broadband are the freeways and railways of the 21st Century – respond to questions. Let’s answer John’s questions from last Friday.

    Lightning might affect fibre networks

    John’s first question was about lightning affecting the NBN, commenting when Pete confirmed electrical storms would affect the network that “it’s no better than the existing service.”

    Sadly all infrastructure is affected by weather – a freeway is just as affected by fog as a dirt road, perhaps even more so, but it doesn’t mean you don’t build a highway because of that. The same applies for the NBN.

    Interestingly the wireless and satellite alternatives proposed to fibre optic cable are even more susceptible to electrical storms, which perversely makes a better argument for running a fibre optic network.

    I don’t need any NBN

    “I have got quite good reception in Condobolin and I don’t need any NBN, I can assure you” was John’s next big statement.

    That’s nice for John that he’s happy with what he has – the rest of us should be so lucky.

    For many of his neighbours and those in the surrounding district, particularly those dealing with remote suppliers and overseas markets, reliable and fast communications are essential.

    Now is good enough

    A farmer doesn’t need broadband for selling into America, he’s able to do that today, was the crux of John’s next comment after he and Pete had an exchange about rolling broadband out to remote locations.

    It’s true that farmers can do a lot with today’s satellite and ADSL connections, then again they were able to ship exports in the days of bullock carts and sailing ships. We could extend that argument against railway lines, roads, containers and bulk carriers.

    Once upon a time some guy argued against the wheel. Today’s technology has been good enough has always been the argument of those who don’t see the benefits of new tools; we’re talking about tomorrow’s markets and society, not today’s.

    Broadband is all about fibre

    “You’re talking about satellite dishes and things like that, not NBN.”

    The National Broadband Network isn’t just about fibre; fibre optic cables makes up the network’s core and bulk of connections, but wireless and satellite are essential in order to make sure the entire nation has access to the network.

    Unfortunately the nonsense argument that technology improvements in wireless will render fibre optics redundant has been allowed to take hold by self-interested politicians and sections of the media pushing a narrow agenda.

    Wireless, satellite, fibre optic and other cable technologies are all part of the mix, the real argument is on the proportions of that combination and the consequences to the government’s budget.

    Spotting the clueless

    As an aside, the cable versus wireless argument is a good yardstick for measuring the knowledge of anyone joining the NBN debate.

    Someone clueless arguing against the project says investment in fibre optic cable is unnecessary as it’s speed and data capacities will be one day superseded by those of Wireless networks.

    This betrays a failure to grasp the inherent advantage of having a dedicated cable connection to your property as opposed to sharing a wireless base station with hundreds, if not thousands, of others.

    Equally anyone pro-NBN who says that fibre is faster because it travels at the speed of light is equally clueless as wireless, copper wire and even smoke signals also travel at – or close to – the speed of light.

    Games and videos

    “Is this only to watch videos and DVDs?” was John’s last question.

    Well, does Condobolin have a video store? A quick Google search shows it does, along with local and satellite TV stations. So the residents of Condobolin are just keen as the rest of us to watch the tube.

    Increasingly our viewing habits are moving online and fast broadband is necessary to deliver that. John may be happy to exclude his town from being able to do that, but my guess is plenty of his neighbours would like to have that option.

    What’s more, many of those farmers, processors, trucking companies and other service providers in the Condobolin region will need those video facilities for tele-conferencing with suppliers, customers and training companies.

    Building for the future

    Video conferencing isn’t the only application for what we consider today to be high speed networks, these are going to change society and business in the same way the motor car changed us in the 20th Century and railways and telegraph in the 19th.

    Australia made a mess of the railways and the roads, in both areas we’re still playing catch up. The National Broadband Network is an opportunity to avoid the mistakes of the last hundred years and get the 21st Century right.

    Unfortunately, the objectives of building a better nation are being lost in a fog of disinformation, political opportunism and corporate incompetence. We can do better than this.

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  • Mad, bad or dangerous: The One Percenters we need to avoid

    Mad, bad or dangerous: The One Percenters we need to avoid

    “I’m not going pay you, your technician was constantly looking at his watch,” growled the customer when asked why she’d stopped a cheque for some work we’d done for her.

    There’s many excuses for not paying your bills but a tradesman trying to keep the client’s bill to a minimum is an excellent dodge.

    Over the phone call’s ten minutes, it was clear this lady was going to be a tough customer.

    First the job wasn’t done properly, then the charges were too high, she accused us of taking advantage of vulnerable women and finally she was going to complain about us to her union.

    It was clear we were in for a fight to get a hundred dollars from her, so I let it go. She went away believing she was right.

    The saying “the customer is always right” was coined by US retail pioneer Marshall Field and exported around the world by Harry Selfridge, one of his employees who also founded a business empire.

    We can be sure neither of them actually meant that customers are always correct in what they do, just that the key to successful service is the client walking away believing they are right.

    Regardless of how well we deliver on our promises, there are always going to be some that aren’t happy. In most cases this is due to misunderstanding, or just a bad day on our part, but sometimes there’s the one percent of customers who are mad, bad or dangerous.

    The Mad

    Some customers just aren’t quite with us. These people, some of whom have genuine psychological problems, simply aren’t going to be reasonable.

    There’s no point in fighting them as that’s only going to make their issues worse and maybe even transfer some of their problems to you.

    Fortunately as you become more experienced in business you get better at detecting and avoiding these type of customers although there’s always the odd one who sneaks through.

    The Bad

    There’s a certain breed of people – and businesses – who don’t pay their bills, seeing their suppliers as banks and an invoice as an interest free loan.

    Often these customers are charming and the perfect client before the bill is presented then they string you out for months of years before paying your invoices.

    For these people and organisations, who are genuine deadbeats, there’s the fool me once, shame on you; fool me twice, shame on me philosophy. It’s usually better to write them off rather than sink hours of management time.

    The Dangerous

    Of all the bad payers, the most dangerous is the game player. To these people, not paying debts is an intellectual challenge which they enjoy and play for fun.

    These folk will just as happily mess around the phone company or the tax office as much as the local plumber or newsagent, it’s just a game which they’ll play to their maximum enjoyment and your frustration.

    For the big companies, these people can be a benefit as they justify the existing of entire bureaucracies dedicated in getting them to pay; small business though don’t have the time and resources to spend the hours of work over years to extract payment from them.

    Thankfully these folk usually stonewall as the first invoice so there’s early warnings you’re dealing with trouble. Resist the urge to play the game with them as they are usually better at it than you.

    Regardless of which category these bad debtors fall into, in each case it’s better for your valuable time and sanity to let them believe they are right, write the debt off and move on to helping customers who really matter.

    Fortunately these people really are the One Percenters and only representative of a tiny proportion of our customers.

    The taste of copping a loss is always painful, but at least we get good stories from the excuses they give. What’s the best reason you’ve heard for a customer trying to dodge a debt?

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  • What business can learn from Groupon

    What business can learn from Groupon

    Groupon, pioneer of group buying and one the fastest growing companies in history, will have its launch on the stock markets today with an initial public offering (IPO) that’s values the business at thirteen billion dollars, more double the $6bn that Google offered for the three year old company last year.

    A recent Business Insider profile of Groupon had some fascinating insights on this unique company and its growth, there’s a number of lessons that most business owners, entrepreneurs and managers can take from this company’s dramatic growth and market leadership regardless of the sector they operate in.

    Apply tech to your business

    Many people make the mistake that Groupon is tech startup when it’s actually a sales operation.

    Groupon’s business model isn’t really new, what they have done is applied various web technologies to the directory and voucher shopping industries and come up with a 21st Century way of doing things.

    Bringing together different modern tools like social media, cloud computing, local search and the mobile web makes businesses more flexible and quick to develop new market opportunities.

    Prepare for quick changes

    Groupon was born out of another business – The Point. As The Point steadily died, Andrew Mason and his mentor Eric Lefkofsky decided to try something different and Groupon was born.

    This ability to change focus quickly – often called “pivoting” – is essential in changing markets. In volatile times like today where today’s business conditions can’t be taken for granted we have to be prepared for rapid changes.

    Fortunately the cost and time to changes your business focus has dropped dramatically with digital and online tools, which is another reason to embrace tech.

    Get a good business mentor

    Eric Lefkofsky bought maturity and a perspective to Groupon’s young leadership, having a different and more experienced view of the business helped it develop and grab the opportunity.

    An experienced business mentor can be worth their weight in gold.

    Back a good idea

    In Nicholas Carson’s Business Insider profile he describes Andrew Mason role at Eric Lefkofski’s business before The Point as “an intern, ‘kind of squatting in their offices’”. Lefkofski was prepared to back the geeky kid camping on his premises.

    Putting your prejudices and judgements on the shelf to back good ideas, particularly those that don’t cost much to execute, is one way to find where the opportunities lie.

    Tell your business story

    Regardless of what you think of Groupon’s claims, they tell a very good story which has lead to their amazing growth and the development of the group buying industry.

    Being able to tell your story, in your terms, is one of the great advantages the web, local search and social media deliver. There’s no reason why your business shouldn’t be dominating the local market in whatever field you work in.

    Regardless of what your business does, it can benefit from applying the online tools that are available to all of us.

    We may not be the next Groupon but the web gives us the opportunity to build our business to take advantage of the 21st Century. It’s worthwhile understanding the new tools at our fingertips.

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  • The IT industry’s damaged business models

    The IT industry’s damaged business models

    JT Wang, Chairman of personal computer manufacturer Acer believes the release of Windows 8, Microsoft’s next operating system, will see a resurgence of sales for Windows based computers. Market trends suggest those hopes are in vain.

    Right now the Personal Computer market can be roughly split into two camps; those happily running Windows XP who have no need to upgrade and those who are delighted with Windows 7 who have no need to upgrade.

    Short of their computers breaking down, neither group have any good reasons to change to the new operating system as, unlike Windows 3.1, 95 or XP, there is no new technology breakthrough or advance to warrant making the jump.

    To make things worse for the PC manufacturers the rise of cloud computing services extends the life of older Windows XP systems and eliminates the biggest driver of new computer purchases in businesses – the software upgrade.

    During the PC era one of the banes of business owners were enforced software upgrades where vendors would release a new version of a program every year or two and withdraw support for the older editions.

    Frequently the newer software would require the latest hardware, forcing the business into an expensive and disruptive upgrade of all their IT systems.

    Today, software companies following the forced upgrade model are finding customers have viable cloud alternatives which destroys the revenue stream behind those frequent releases.

    When a customer moves to a cloud service, they also delay buying new desktop or server hardware which is partly driving the steady increase in the age of business computers.

    For computer manufacturers the release of Windows 8 could actually be bad news as customers will probably postpone system upgrades until the first service pack of the new operating system is released.

    Even if Windows 8 does deliver increased sales as JT Wang hopes, the trend of steadily falling PC prices as smartphones and tablet computers take market share is inevitable.

    The PC industry in both laptops and desktops has been a commodity industry for some years and any hope of establishing premium pricing from tablet computers has been dashed by the iPad’s competitive price points.

    Regardless of the hopes of the IT industry’s leaders, both the hardware and software sectors are under a lot of stress. It will be interesting to see who adapts to today’s market.

     

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  • Does revenue solve all problems?

    Does revenue solve all problems?

    According to Eric Schmit, Google’s Executive Chairman, “Revenue solves all problems.” Is that really so?

    The truth is it doesn’t. Revenue can solve some problems, while creating others and having plenty of cash coming in may even cover over existing issues that can be ignored while times are good.

    Plenty of governments have found themselves unsuck after rich revenues allowed them to ignore problems in their own society, the Dutch Disease – where a country’s income rises rapidly because one industry booms and crowds the others out – is one example of revenue causing problems. Local Chinese governments are currently dealing with problems bought around by their massive income from selling land.

    In business, owners and managers sometimes find themselves in trouble because they can’t manage the demand that comes with the revenue a growing enterprise attracts.

    Sometimes, the revenue’s fine but there’s no profit. I can earn a lot of money selling bottles of beer for ten cents when everyone else is charging two dollars, but the fact the wholesale price is one dollar means I’m going to grow broke quickly unless I can impress a dumb corporation with my massive customer growth and get them to buy me out.

    The group buying model tends to combine two of the above problems – participating businesses struggle with the demand they generate while the discounts they are giving almost certainly guarantees they are not making a profit on the deal.

    So revenue doesn’t solve all problems, even the most profitable business – legal or not – has its own unique set of problems.

    Life’s easier when your business is profitable, but problems will never go away. Even the good life has problems; deal with it.

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