A catechism of business cliché – with apologies to Myles na Gopaleen Thursday, Jun 21 2007

 

Question	Response
What am I here to do…?	….I am here to tell you that…
What conveniently located fruit will we go after first?	The low-hanging…
In what condition was I born?	…ready
What discovery process will we apply to the onion?	We will peel back its layers
What additional distance will we go?	…the extra mile
Outside what container do we need to think?	…the box
What percentage do we intend to give?	110%
What do we want to obtain the maximum of for our expenditure of a buck?	…bang
On what horizontal surface do we want to avoid leaving money?	The table
What mutually satisfactory situation are we aiming for?	…a win-win situation
What duration of haul are we in for?	…the long haul
To increase sales what do we intend to place more of on the street?	Feet
What example of analog instrumentation do we intend to move?	The needle
What lateral translation do we intend to apply to the paradigm?	We will shift it
What kind of upward pointing job is he doing?	Stand or bang
In order to initiate the process what two forms of lurching locomotion will we employ?	Rocking and rolling
To what major religious figure will we urge the other party to come in our discussion?	Jesus

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Is the airline industry an example of excessive competition? Friday, Jun 8 2007

Economics divide businesses into oligopolies, monopolies or those in perfectly competitive markets.  Theory doesn’t address excessive competition – markets so competitive that nobody makes any money.  For an example consider the US domestic airline industry. It seems impossible for a carrier to make money for a sustained period, but players never go out of business. Economics says that companies exit markets if they lose money.  

To the casual observer airlines rarely seem to go out of business, but go into Chapter 11 bankruptcy regularly as clockwork. Why can nobody make any money and why don’t these apparently unsuccessful operators get forced out of business permanently?

In fact, over the years numerous airlines have gone belly-up, if you include those acquired by other airlines. The few successful airlines, such as Southwest, have carefully avoided acquisitions, but mergers are fashionable among the incautious. Wikipedia lists more than 200 defunct airlines, including such notables as PanAm (1927-1991), Braniff (several existences) and TWA which lasted from 1930 until being acquired by American Airlines in 2001.  

Clearly there is excessive competition in the airline industry. I think there are two reasons for this. One is an abundant supply of people just itching to start an airline, none of whom have any experience or knowledge in the business. Some do manage to beat the odds, Virgin being one, although they do not operate in the cutthroat US domestic market.  Numerous others such as Trump, Hooters, ValuJet (now AirTran) and Song (merged back into Delta), have been willing to jump into the sacrificial fire. A new entrant, Skybus, is launching the ultra-low fare model made popular in Europe by Ryanair.  I will be extremely surprised if they are profitable, but I expect they will survive several injection of financing from their hopeful backers.  This regiment of entrants inevitably pulls down potential returns.

The second reason for the excessive competition is the apparent willingness of large lenders to the industry to lose big sums of money.  When airlines are in bankruptcy there seems to be an endless troop of banks willing to advance more cash in the expectation a recovery in the industry is just around the corner.   Additionally airline costs are still very high, and bankruptcy is seen as a model for getting down to a lower-cost model that is thought to be a requirement for survival.

This is a fairly miserable situation for the customer.  Employees have seen their pensions go west, so are generally demotivated and surly.  The airlines have no money to spend on planes so the conditions range from down-at-heel to alarming. Operators, desperate to fill seats, offer very low prices to the casual traveler, subsidized by us business travelers, who pack in despondently. 

I am waiting to see the emergence of small, business-only flights on domestic routes.  If this happens then the big carriers will melt away like summer mist, taking a fortune in frequent flyer miles, but otherwise unmourned.

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The Changing Economics of Atheism Wednesday, Jun 6 2007

The great advantage of an organized church is that it can develop and maintain a reliable income stream. Listen to any evangelical radio station or read the novels of Anthony Trollope and you quickly realize that money is the chief preoccupation of the church leaders. Finance gets a lot of time and attention in churches, managing it and to making sure it continues to flow in. Atheism has no such institutional advantages. The problem with atheism is that there is no money in it.

Several organizations exist for the propagation of atheism, but since the obvious advantage of atheism is that you can stay in bed on a Sunday morning, there is no clear mechanism for raising funds. Atheists don’t gather where they can be exhorted. For the cynical who believe that evangelical organizations are established at least in part because of the power and influence that accrue to the founder, it might seem that the same motivation should inspire a guru of non-belief to start a non-church. This might be a little too obvious and blatant. Even if it were successful in generating cash flow, what would an atheist organization do with the money? All you need is to support a few web developers.

I suggest this is actually a problem for society. Atheists are invisible. There is no organization that a TV station can call upon to defend the interests of atheists when someone like former President Bush says that atheism is incompatible with being an American – something that he would not have considered saying about any other minority. Since nine percent of Americans describe themselves as atheists, this would appear to be a large amount of people to antagonize. Another problem with this invisibility is that the average person can be lead to believe that an atheist is some kind of crazed neo-Marxist hiding in the woods, probably making pipe-bombs.

All this has shown some signs of changing in recent months with the publication of several books by atheists that have received a lot of publicity. Christopher Hitchens’ God is Not Great is the most recent one, hotly following The God Delusion by Richard Dawkins and Letter to a Christian Nation by Sam Harris. Sam Harris is notable for having been catapulted if not into fame at least notoriety by his book.

Suddenly there are some spokesmen for atheism who come across as being reasonable beings, somewhat passionate about their non-beliefs, but otherwise quite normal. In Hitchens, the cause has a formidable, polished and assertive debater, who reduced Sean Hannity to incoherence in a recent discussion.

Society now effectively enriches people solely for their adoption of atheism as a personal creed, which has not happened before, at least not to this extent. Atheists may regret that two of these authors appear to be definitely non-American (which might be viewed in some quarters as bolstering Mr. Bush’s opinion), although Christopher Hitchens has recently become a US citizen.

What happens next? If non-believers are really as much as nine percent of the population, then it would seem that politicians cannot ignore them indefinitely. Historically a minority is ignored as long as there is an unspoken agreement between the two parties to do so. Typically, a politician will break ranks when he or she reckons the advantage to be gained is worth the potential dismay among existing supporters. Eventually the cause of the minority goes mainstream and both parties battle for their vote, with the advantage usually going to the original champion.

There is no sign that atheism will get the nod from anyone, judging by the tone of the presidential nomination debates. But that could change, especially of someone emerges as an articulate spokesman for non-believers at large.

The biggest problem for politicians who might want to court the atheist vote is how to address it. After all, on Sunday morning atheists are all in bed.

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How to run a magazine subscription department… Sunday, Jun 3 2007

Like most, our family subscribes to several magazines. I get Wine Spectator and The Economist, we get a horse magazine, one on computer games, Gourmet and so on. All of the various subscription departments seem to operate in the same way, so I have developed a set of Standard Operating Procedures for anyone contemplating setting one of these up:

· You have to snag the first-time subscriber by making it essentially free. The classic was the school fund-raiser, still a good get, but airline miles work well too. Find a list of dormant frequent flyer accounts – these are worthless because the account holder no longer uses that airline but he doesn’t want to see the points go away. Offer a list of magazine subscriptions for points and you have him.

· You can now sell the list of magazines that the guy ordered to a direct mail company. This will cover what you need to pay the airline for the miles

· When he has subscribed, send him lots of copies of the magazine instantly, recent enough that they are almost, but not quite, back issues. You can probably go back a month or two and even three is worth a try. These copies were going to be pulped anyway, and you are pulling forward the time when you are going to get real money from him.

· After three or four issues have gone out send him an offer to subscribe for another year at a deep discount, especially if he commits for 24 months.

· Start hitting him up for gift subscriptions. Depending on the magazine you can target these to specific dates. Wine Spectator is a favorite Fathers’ Day pitch. Anything slightly old-fashioned works for Mothers’ Day. As soon as you hit September out come the holiday gift subscription offers, and you can hit him up with “That Special Person” any time during the year.

· By now he has had six or seven issues (half were back issues) so his subscription is in imminent danger or expiring. Send out a reminder, but reduce the discount. He won’t know anyway. Slow down the deliveries a bit, now. You want him to see the issue in the stores before he gets it in the mail. With luck he is hooked and will end up buying next month’s issue for full cover price when on a business trip somewhere. This is gravy! The subscription issues he gets in the mail will have an ominous countdown insert “Only five issues to go!”. (By the way, make sure these aren’t just cards stuck in there. The experienced target simply shakes his new issue over the trash bin. You want them stapled into the binding so they appear at two places in the magazine).

· Now start sending out the new year’s subscription demands in the form of a friendly-looking reminder, but in an envelope like a bill. Have a box he can check to renew and include a pre-paid envelope. Chances are he will just do it along with his bills. You are vulnerable right now.  This is the danger time and it is vital that he hold out and then renew with another school fundraiser.

· If he doesn’t renew, send him one more copy after the expiration, “as a courtesy”, and then follow it up with a stern-looking invoice. “You may have overlooked our recent invoice…” Most people will cave at this point.

· Once you have got him to subscribe for one year at full freight you are home free. You can now start hitting him up for life insurance and other stuff, as you have a legitimate business relationship.

· Start over again with the gift subscription offers…

All-in-all, this is guaranteed to work.

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