I know its old news, but I’ve still been thinking about the Facebook PR misfire from a few weeks back. A few people I’ve spoken to lately have asked me to write some more strategic material, so I’ll take one more hack at it here before writing about something else (I don’t want to bore people!). I can’t take credit for the central idea below though; a fellow by the name of Jay Gould used to do this a lot back in the 1800s, and it probably predates him too.
Category Archives: Business
Open peer-to-peer markets
The following is a crude, first attempt to try and define a way for an online market to operate that is entirely decentralized (i.e. there is no central exchange).
In addition to describing some of the mechanisms that would allow such a market to operate, I am also calling for a) the establishment of a foundation or industry association to ensure that standards are created for the necessary systems, and b) the voluntary acceptance of some level of regulation (i.e. government) by the virtual market community. I’ll make cases for both below. Continue reading
Protected: Free Disruptive Business Models
Currency as incentivation
I was going to write a short article on some of the challenges that face virtual currencies in order to obtain main street acceptance, along with some possible solutions. Some of the possible solutions turned out to be interesting, and highly “disruptive” business models, and its a bit premature to discuss them in an open forum. Continue reading
The danger of lock-in
Lock-in refers to a situation where prior decisions make it very difficult to change things later on. Lock-in exists in many areas, but it is in the technical sphere where it is often felt the hardest. A bad decision today can literally make life difficult for oneself – and many, many others – for a great many years. Continue reading
All the gold in the world
I don’t claim to fully understand the economic rationale behind the fierce arguments in the US at the moment regarding gold-backed currencies. A number of very smart people have weighed in on each side. The point I wanted to make is a bit different though; it likely is not original, but I can’t find a source right now. Continue reading
Disintermediation!
There’s nothing new about disintermediation – the removal of intermediaries in business. Its part of the age old battle between middlemen and those who wish to cut them out of the picture. The internet was supposed to cause disintermediation on a large scale, but all it did was redraw the battle lines a bit.
The reason I mention the word is because I’ve been brainstorming business models with a client lately, and we’ve come up with some doozies. Not the usual groceries direct stuff. I’m talking chunks of the financial industry. We’re willing to do coffee with interested parties…
Strategy for Facebook (Part 2)
For part 1 of this article, see here.
In part 1, we looked at some of the issues that may effect Facebook’s future growth and profitability, as well as some of the strategic decisions they could make to counter them. Continue reading
Strategy for Facebook (Part 1)
As Facebook gets closer to an IPO (and corporate maturity), we’re starting to get a clearer picture of where they are aiming, and what their actual competitive landscape looks like.
The recent (silly) spat with Google is an indication that they view the folks in Mountainview as their primary competitor, but there are also other, less visible tensions – for instance the difficult that they’re having in persuading app companies to adopt Facebook Credits. These are likely to come to the foreground as Facebook strives to increase its revenue (and profitability) once it goes public.
Where is the money going next?
Ever wondered how much money there is in the world?
The answer is that nobody really knows for sure, but there are various estimates that involve esoteric calculations.
The thing is though – the total amount of money in the world changes relatively slowly (i.e. it is somewhat inelastic).
New inventions and companies add a bit to the mix.
Major stock market crashes remove some value on the other hand – but less than you might expect. What actually tends to happen when a particular market crashes is that money moves out of that market and into another one. Its somewhat like one of those animal shaped balloons – you squeeze on one part, and the air goes into a different part. This is what has been driving speculation in commodities over the past few years; money moved out of markets like mortgage backed paper, bonds and stocks, and into commodities like oil and gold, because investors don’t want to just sit on cash – they want (or in many cases need – i.e. a fund that invests other people’s money) to make a return on their capital.
Major fortunes have been made by people who are good at working out ahead of time where the money is going to go next. Soros made huge sums of money in currency exchange (most famously betting against the Pound, but also in Thailand and other places), because he figured out where the money was going to go ahead of time.
Here’s the thing: its looking like the commodity rally is slowing down. Maybe. Its hard to call that sort of thing. Certainly various governments are under political pressure to make it uncomfortable to speculate in certain key commodities (i.e. oil), and the Chicago market has been tightening the margins required to buy and sell paper (probably under pressure from the US government), which may tamp down that market a bit.
So where is the money going to go next? I don’t think its into bonds, unless I’m completely off base – the inflation/lending rate thing is too hard to call yet. The stock market seems to be topping out for now, although it may resume growth soon. Nobody wants to touch real estate right now – again too much uncertainty. So is the money going to head overseas? Will investors be willing to go all cash and sit on the sidelines for a bit? My guess is that we’ll see some M&A activity that will be driven by low stock prices, combined by impatient investors with a lot of cash. I also wouldn’t be surprised if we see a lot of instability in currency markets as well, as a result of speculators pushed out of other markets. Again, its a murky situation and nobody really knows for sure.
The point of the vague meandering above is as follows though: I have some ideas regarding how a computer could track global flows of money over time and try to figure out the possibilities of different kinds of outcomes. Something like a “Soros in a Box”, if you will. Not completely original – I know that there’s any number of hedge funds that have proprietary systems like this. I’d be interested in bouncing ideas off of people smarter than myself though…