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Wednesday, October 28, 2009

A Primer on the Southern California Tech Community

Some of you may have noticed the badge on the right side that says "Southern California Tech Central: Featured" and wonder what that is.  Well, I'll tell you:

It is THE resource for tech-industry information in So-Cal.  The domain is http://cc.tcosc.org/

When you visit the website, you will be presented with all of the latest news and analysis from a variety of tech professionals (including me).  Even if you are not located in Southern California, this is a terrific source of information and it is organized very well.  Over the past few years, So-Cal has become a major hub of the tech industry, and Tech Central is the online nexus of that hub.

Tech Central is co-sponsored by the Technology Council of Southern California and TechEmpower.

TechEmpower is a tech-development firm, and the leading eLearning development company.  Its founder/CEO is Dr. Tony Karrer who maintains the blog SoCal CTO.  Tony's blog has a wealth of information, especially for those interested in learning how to utilize sites such as LinkedIn, Facebook, and Twitter for more than just ending up on marketer's spam lists.

--Aaron

Sunday, October 25, 2009

Second Review: Of Two Minds by Charles Hugh Smith.

I have been reading Of Two Minds (OTM)--http://www.oftwominds.com/blog.html-- for almost as long as I have been reading Calculated Risk. Mr. Smith has coined the term “Wessay” as in “Web-essay.”

Mr. Smith has a number of works of fiction that have been published, which I haven't read. But his writing style is fluid and easy to follow, so one day I may give one (or a few) of his books a shot.

His blog is more analysis-focused, with frequent, (about once a day) lengthy posts.

Topics vary greatly, but generally include topics such as housing, stock, sustainability, income disparity, peak oil, and global warming.

OTM often has contributions by readers. Mr. Smith's readers are a very bright bunch and will send their own analysis which Mr. Smith incorporates into his own writings. This provides lots of different perspectives on a topic.

My favorite part about OTM is Mr. Smith's pragmatic take on life: if you live close to work, why not ride your bike there? You save money and stay healthy, which saves you more money.

He was one of the many bloggers who saw the housing and financial collapse coming from a mile away. For example, in 2005 he wrote:
“The wild card no one planned on is the U.S. housing bubble and the consequences of its collapse. That bubble is stiil inflating, ensuring the "pop" will be more devastating than anyone expects; housing starts are still rising, building a classic over-supply where there's far more houses on the market than buyers. As builders drop prices in a desperate bid to dump inventory, they will lower prices not just of new houses but existing housing as well. Not a pretty dynamic, but it's the one which always plays out in housing booms and busts. “

A Rickety Global House of Cards (October 20, 2005) (http://www.oftwominds.com/blogs/house-of-cards.html)

This was not some wild guess either. This was based on detailed and reasoned analysis. Indeed, Mr. Smith was a practitioner of the Holocognical arts while I was still a law student.

Other information about OTM:
The colors are fine, the layout is ok. There are LOTS of words. This is great if you enjoy reading (like I do), it's even better since the content is good. But the blog can be hard to navigate. Overall, I highly recommend giving OTM a read. If you enjoy my blog, you will enjoy that one as well.

Critically yours,
Aaron

Friday, October 23, 2009

Value and Money

Value and money. Two things that business can't exist without (especially if you define business as an undertaking for value).

Value is the last major stone of our foundation, and an essential concept.

Money is, obviously, valuable. So are lots of things: gold, platinum, cars. Those all have value, usually quantified by money. But those are quantities of value in their own right. You can trade gold for platinum, or platinum for cars. Once again we are left with the question: if all of those things are quantities of value, what exactly does that mean?

To answer this, we will look for the common denominator in all things of value. If gold, platinum, cars, and money all are quantities of value, then if we find the common element in all of those, we will have isolated value. Before we begin, we need a wider sample set of things that are valuable. So let's use the following categories:

Naturally occurring items such as gold, wood, and oil.

Money/currency – man made items that act as a “store of value”

Consumables such as cars and tools – these are man made items that people want to own, whose value is measured roughly in proportion with their cost to make

Art -- man made items which are not consumed, and which have value well exceeding their cost

These are very rough definitions, and have plenty of cross-over. There are items which are not on the list, which perhaps should be. I know. I could go into a lot more detail, but it would turn into a Master's thesis. What we've covered so far is enough for this thought experiment.

What creates value?

Naturally occurring items – Oil, wood, gold, etc. have their "value" measured in U.S. Dollars, and that value changes constantly. What we're interested in are the different elements or factors that create that value. The best approach is to go in reverse.

The end result of natural items, for example gold, is the nugget. We're not going to talk about the bracelet (that would fit under "consumable"). The nugget is mined by people. People have to put in labor, which is really time. They use picks and machines (consumables). To put in labor, they have to eat food and drink (more consumables). If you think about it, natural items get their value from the effort of removing them from the ground. We will call this a “transformation.” We are transforming the tree into lumber, the gold vein into a gold nugget, the oil field into barrels of oil.

Consumables – Consumables are made with labor and more consumables and money. What is the ultimate source of the tools to make the cars? Labor and money. The resources (gold, oil, etc.) have to be transformed into the tools (consumables). The source of transformation is labor (time) and money. So consumables = time and money and resources. This is also a transformation. We are transforming the resources into the consumables by applying time, labor, and money.

Art – Art is made almost exclusively with labor and time. The artist has to live by eating (consumables), and needs paintbrushes, paint, etc. (consumables, resources), but the major contribution is labor and time. Art derives its value almost exclusively from the transformation of consumables into something else.

Money – Lastly money earns its value from the stability of the country backing it. That stability is because of the time put in to build the country. Money is the grease that allows the transformations above to happen. Money derives its value by allowing one person to transform their resources, consumables, or art into another. For instance, if Bob transforms resources into a car but wants art, he can transform the car into money by selling it, and then transform the money into art by buying the latter.

So, if you look at everything, and trace them back to their root source of value, we see that transformation is ultimately the source of value. It is the transformation of resources into consumables that people want that creates the value of the consumable, it is the transformation of consumables into art that creates the value of the art, and it is the ease and predictability of transformation that creates value for money.

Understanding that the ultimate source of value is transformation, and ultimately the transformation of resources over time, changes the way we look at things.

Thursday, October 22, 2009

A Nostradamus Moment

A few months back I had a premise for a book. I want to memorialize it because I think it is a good prediction of the not too distant future. Holocognics is really about a logical process: breaking things down to their basics. You can then follow the trends to see what the future holds.

There is a technology called "Augmented Reality." It's simple to understand. It requires 3 items:

1) a camera. Video is preferred.
2) A computer. the computer needs to run what we'll call "translating software."
3) A "marker." The marker is a visual cue that tells the computer what to translate.

A simple demonstration of AR technology involves a paper marker and a live feed. If you have a webcam, there are plenty of websites that have demonstrations that allow you to print out a marker on your printer.

The marker tells the computer what image should be displayed and where. So, while running the translating software and looking at a monitor, you get a glimpse into a different world. The marker appears to be something else. It even interacts with real life. Pretty cool huh? Look at this video for an example:
http://www.youtube.com/watch?v=ZKw_Mp5YkaE

Where can this technology lead?

I imagine people wearing special goggles, I call them "auggles," which allow you to see the augmented world.

Instead of billboards, all you would need is a marker. The marker can even be set by GPS location, so no physical billboard needs to be there, as long as you are wearing your auggles, you will see the advertisement. Shops can change their color or display at a whim. You can even customize your own world, as long as you're wearing your auggles.

The technology exists today to create goggles which, when linked to a computer, will display to its user ANY image at ANY location. A few years from now, it is likely that the technology will exists that will allow you to wear auggles, perhaps as light as sunglasses, and allow you to choose the color of the sky. Or allow Pepsi to have cans which appear to be animated (while wearing your auggles).

I have no doubt that millions of dollars are currently being invested to monetize this technology.

Reading the chicken bones,
Aaron

Monday, October 19, 2009

First Blog Review: Calculated Risk

Regarding blog reviews: I will review blogs that I read, until I run out of those that I read and need more material. They are not all economics, business, or stock related, although a lot are. You may have guessed by now that I am a goal-oriented person. So let me explain the goal of these reviews:

1) They will highlight material that I read often. If I read it often, then I must find some value in it. If I find some value in it, then it deserves to be promoted by me, even if it is just in a small fashion…

2) Perhaps you will be interested in these blogs, but want a summary of what the blog is about before visiting the site.

3) After many reviews we will, hopefully, have a more thorough understanding of blogs, and be able to apply a holocognical analysis to this medium of information exchange.

I will not provide a 1-10 or thumbs up rating. Instead, I will provide a summary of the blog, and what I like/don’t like, as applicable.

Each blog I review will then be added to the blogroll.

First review: calculated risk – calculatedriskblog.com.

The first blog up for review is calculated risk. It’s the first blog I’m reviewing because it was one of the first blogs that I read regularly. I began reading calculated risk sometime in 2006, and I check it almost every day.

The subject matter is broad-based economics. Mostly, CR posts a news article related to a recent economic statistic and then provides some commentary on it. Not surprisingly, a lot of the posts are housing related; not many are stock market related.

CR is a great source for economics news and explanation, although there is not much analysis (ie. how will the news affect the economy going forward and why). That’s not to say it is completely devoid of analysis, just that the focus is on the news and an explanation of what the news means today, not what it means going forward.

There are a couple of items which make CR particularly worth noting:
1) the charts, which are frequent and fantastic, and
2) the Compleat Ubernerd.

The Compleat Ubernerd is an archive of particularly long posts detailing mortgage-related topics. They are very detailed and very interesting (if you’re into that sort of thing). If you want to know how the mortgage industry works, google it. If you REALLY want to know how the mortgage industry works, read the Compleat Ubernerd.

It is very important to mention that the Compleat Ubernerd was made by Tanta (Doris Dungey), who was CR’s co-blogger. Ms. Dungey passed away in late 2008. I did not know her personally, but anyone who read her posts could tell that she was a sweet, funny, and brilliant individual. More information about Ms. Dungey can be found on the CR blog.

With regards to the other aspects of the blog:
The layout is clean and the colors are fine.
The comments tend to be pithy and short, but I don’t usually read them.
The updates are frequent.

Overall, if you are interested in economics news with a healthy dose of housing, then you will enjoy calculated risk.

I hope you enjoyed my review (both of you who actually read my blog). Later this week we will return to our holocognical take on business. To summarize where we are thus far:

holocognics -- a complete understanding of a subject.
business -- an undertaking for value.

We are still laying the foundation before delving into the REALLY interesting stuff, so I hope you hang in there (both of you).

Next up, we will define "value" and talk about money.

Many riches,
Aaron

Saturday, October 17, 2009

Defining Business

Now that we have an understanding of “holocognics,” let’s explore what a “business” is.

Obviously, Microsoft is a business, and so is the neighborhood dry cleaner. But, is a ten year old’s lemonade stand a “business” if it is only intended to last the weekend?

I consider any undertaking for value a “business.” That’s a very broad definition, but one that will be important in the future. Using that definition, an employee is a self-contained business.

Many people would take issue with that: the employee doesn’t pay “business taxes” or “business expenses.” Sure, an independent contractor does, but not a full time employee.

My response is: every individual makes decisions based on their perception of what is in their best interest. Thus, the very act of attempting to survive is a business since survival is an undertaking for value. The study of business holocognics can be applied broadly (and would overlap Economics in many instances).

Too broad a definition is not useful, so the following question must be asked:
What are the basic stages of an “undertaking for value” or “business”?

Here are what I consider the stages of a business:
1. Startup
2. Change
3. Exit (or end or implementation of an exit strategy)

Each of these stages can, and will, be broken down further and defined. Doing so will provide a complete and detailed understanding of “business,” or “undertakings for value.”

The definition of “value” will be the subject of a future post.

Cheers,
Aaron

Thursday, October 15, 2009

What is Holocognics?

Since this is my first blog post, I thought I would explain what this blog is about and what the word "Holocognics" means.

The purpose of this blog is to explore the methods by which business succeeds. I want to share the practices developed by myself and my partner in our roles as consultants working with entrepreneurs, startups, and larger businesses. Hopefully some of the information will be interesting and useful.

If you read something that makes a difference in your business practice, please email me and let me know. Also, if you have any comments, please email them to me. It is true, I am a lawyer, but I like to think I am a personable and approachable lawyer. Also, feel free to visit the Chandler & Shechet, LLP website to learn more about me, my partner, and our business.

When thinking about the approach we take in helping businesses grow, I realized that although we represent clients in court, provide advice regarding our client's rights, register trademarks, etc. we serve a function beyond "lawyer." We help our clients with brand development (I will discuss that term in a later post), create lean processes and systems (for a later post), develop business models (later post), and draft business plans (later post).

But the legal work we do and our role as advocates make us more than just "consultants."

There is a lot of cross-over between these roles, and that is what makes our practice unique. If we were to teach our methods in an academic setting, what courses would we teach? Would it be law school with business classes or business school with law classes? I don't know, so I came up with a word for the interdisciplinary study.

Holocognics is a new word made up of the following: "holo," "cogn," and "ics."

Holo is the root for "whole" or "entire."
Cogn is the root for "know."
Ics is a suffix which means "things having to do with." Think of "optics" meaning "having to do with opt (roughly translated 'opt' means 'seen')."

So, holocognics is "things having to do with a whole knowing" or, roughly, "regarding a whole understanding."

As the blog title would suggest, I will explore a whole understanding of business -- what makes it function, what makes it profitable, what makes it valuable (different than profitable), how to make business "work." This is a pseudo-academic, pseudo-practical undertaking which necessarily will involve discussions of Economics, Politics, and Marketing, as well as many other subjects.

I hope that you, as an entrepreneur, CEO, COO, and/or "other" will find such discussions interesting, but more importantly, useful. If you work for someone, I hope you will gain some insight into the function of business (and how business functions) and why some of the requests your boss makes of you seem random. Perhaps you will even be inspired to start your own business.

I understand that although I may enjoy discussions of how the second-derivative of a supply curve affects the price of oil, and delving into an analysis of why calculus helps explain that, others may read math equations and ask "but what does that have to do with the price of gas in Egypt?"

So, I will try not to get too technical. I hope most of my posts will be significantly more interesting than this one.

One other aspect of this blog that you should be aware of: I plan to occasionally review other blogs. If you need an excuse as to how that fits the theme of my blog, I am sure I can come up with something. But, to be honest, I enjoy breaking things down into their basics and learning what works and what doesn't, and the proliferation of blogs makes them an easy thing to evaluate.

Hey! That fits in the theme!

Until next time,
Aaron