Selling Out

I like Extra Life Radio, and listen to it as often as I can. Occassionally something comes up in the discussion that gets me thinking, and this week's episode did just that. The host, Scott Johnson, mentioned that one of the things that really irritates him is when he hears folks use the saying "oh, they totally sold out". He mentioned this in response to criticism of the recent Mt. Dew ads featuring a World of Warcraft tie in.

That got me thinking about the phrase. Scott's beef was that it didn't make sense. After all, Blizzard (Activision) is in the gaming industry not to create some love-in for RPG fans, but to make money. If working with Mt. Dew leads to more money, then that's good business.

Is it really though? I do agree that this term "Selling out" gets thrown around rather flippantly, but sometimes, it is spot on. Branding is incredibly important to some companies. Great care must be taken not to dilute that brand or associate the brand with things that do not synergize with the brand. For instance, you probably won't ever see a Rolex tie-in with McDonald's. McDonald's is all about convenience and being inexpensive, while Rolex is about luxury and prestige. If such a combination were to occur, it could be accurately described as "selling out the brand".

I do agree with Scott Johnson that the pairing of WoW with Mt. Dew does not diminish either brand, and thus the "selling out" comment is not relevant. On the other hand, I do believe it is important to listen to your consumer base, and to be cautious about how, where, and when your brand image is used.

When Does a Quarter Cost More than 25¢

I had an interesting experience at lunch yesterday. My coworkers and I often go out for lunch, and often to the same places. It was on one of these trips that I realized a quarter can be worth a lot more than 25¢ given the right circumstances. There were seven of us heading to the restaurant, so we took two cars. After being seated, we ordered drinks: five waters, a coke, and a diet coke. The waitress (we'll call her "Kay"), returned with the drinks and a scowl on her face. She put all seven drinks at the corner of the table, then unceremoniously dropped seven straws in the center of the table. Not a big deal, but usually a waiter/waitress will pass around drinks and straws individually rather than asking the guest to do it. We placed our food orders and waited for it to arrive...

...and waited and waited and waited some more. It was more than 30 minutes before our food arrived. That's killer on a workday lunch. In the meantime, the drinks at the table were getting low and the waitress was not interested in offering refills. In fact, in the entire time that we waited for food, we never saw our Kay.

Once we were all finished and our checks arrived, six people paid by credit card and I paid with cash. My bill was for $7.25 and I put a $10 bill on the table. Kay asked me if I wanted change, and I said yes. She said, "Are you sure you want change?" Ummm, YES! Firstly, service was bad already, and a $2.75 tip on a $7.25 meal would be a nearly 38% tip! This should have been my first clue that Kay wasn't a math wizard.

Kay returned with the receipts for all of the credit cards and pens...and no change for me. I gave her the benefit of the doubt and assumed she just needed to go back for it. Everyone at the table knew I needed change, so they waited....and waited and waited and waited. When it was clear that Kay wasn't going to give me my change, one of my coworkers called her over and I again asked for my change. With a heaving sigh Kay got her change purse out of her pocket and produced two ones and a quarter for me. Hmmm, not the right change for a $7.25 bill. Wanting the situation to be done and to just leave, I left the quarter on the table. I figured the 50¢ she had shorted me with the quarter was still better than a 10% tip, and definitely more than she deserved. We all returned to our cars to leave.

As we were buckling in, we see Kay come tearing out of the restaurant to the other car. We can't hear her, but we see she has a receipt and is talking emphatically with my coworkers in the other car. We assume someone forgot to sign their receipt and leave. When we get back to the office, one of the guys in the other car drops by my office and puts a quarter on my desk. He said Kay ran out to the car to let them know that we "forgot our quarter". The guys tried to explain to her that this was an adequate tip since she had already shorted me, but it wasn't getting through. Apparently she stomped off in a huff.

That was crossing a line for me. I can deal with bad service (I've lived in Maryland, home state of bad service at restaurants). Running out of the restaurant, harassing the wrong person, and being insolent due to your own ignorance is too much. I called the restaurant and let the manager know that, while we enjoyed their food, I needed an assurance that we would never deal with Kay again if we chose to return. The manager was profusely apologetic and assured me that Kay would not bother us again in his restaurant.

So here we have a case of a quarter being worth more than 25¢, it was worth Kay's job. I'm sure Kay probably hasn't learned any kind of lesson here. She's probably hating my guts for being a meany. Still, I do hope that at some point she is able to learn from this experience to know that you really have to pick your battles. When making that decision, make sure you've used good math.

Arguing on the Internet

I need to learn to stop arguing with the internet.  Until I do, here is my retort to one such misleading message I couldn't leave alone.

Wouldn't that be great!  But wait, Snopes to the rescue!

http://www.snopes.com/politics/gasoline/bakken.asp

This is long, so go ahead and delete it if you aren't interested in hearing things you don't already agree with.

The truth of global warming truly hit me on my trip to the Phillippine Islands.  On the front page of the paper was a story of how the newly elected leader of a Micronesian country was forced to make his top priority the full evacuation of his citizens.  The reason?  Global warming has caused sea levels to leave the highest point in his homeland only 20 feet above sea level.  In five years or less the entire country will be submerged and the population displaced.

This isn't a problem that only the Pacific islanders suffer either, although Hawaii is another good example of a location soon to be submerged beneath a combination of lava flows and sea water.  Beaches are eroding at the fastest rate ever.  New York is also battling rising sea waters.  International relations with Russia have been strained over the claim of the newly opened arctic shipping lane, created by the continuous degradation of our polar caps.

There are alternatives to "Drill Baby Drill" that will result in our independence from foreign oil.  Even better, they will move our country into an era of technological leadership in the world where we again create the products everyone wants and needs.  

Taking the hard protectionist list isn't a solution either.  Even if we determined to become independent of foreign oil, but failed to proliferate our technology abroad, we would still be in the same mess.  Consider Brazil, Russia, India, and China (the BRIC nations): fastest growing economies on earth, and fastest industrializing.  If every household in these nations had a car, even a modest 32 mpg car, our oil supplies would be sapped and our air unbreathable.  Don't think it is going to happen?  Indian conglomerate Tata has already produced a vehicle that costs less than $2,000 with the intention of getting the population on the road.

Returning to the thought of drilling, I have worse news.  Even if we were to start drilling EVERYWHERE we possibly could within the boundaries of the USA (and even extending our international waters) that oil won't be available for processing for a minimum of ten years.  This quote from planetforlife.com regarding the Alaska National Wildlife Reserve sums it up nicely:

ANWR has the potential to reduce oil imports by 5% for 2 decades beginning in 2015. Other sources of oil within the U.S. will be depleting during that time. There is no realistic way to reduce dependence on imported oil if oil consumption continues at its present rate.

Further reading materials:

http://lifeaftertheoilcrash.net/

Lending and Home Sales

Is this the right offer for the times?  On the one hand, it is a great idea to offer a potential home buyer the peace of mind that, should you lose your job, your mortgage will be one less worry.  Wait a minute though....isn't risky lending one of the components that got us into this economic mess to begin with?  Exactly what kind of buyer is this ad going to attract?  If it attracts responsible buyers purchasing within their affordable range who are uncertain about buying, then great.  Getting responsible buyers to make responsible purchases is the goal of all of the economic stimulus we'ver heard about recently.  If, however, it attracts irresponsible buyers who KNOW their job is in danger, or encourages those with uncertain employment to get a bigger loan, it is a terrible idea.  This same sort of offer is found in not just home buying, but in nearly all areas of major purchases.  Hyundai recently ran television ads with a very similar message.  

I'm all for doing what it takes to get responsible people spending, but I hope that the lenders tied to these deals are donig a better job of screening applicants before giving a loan.  

Resume Writing

Over the years I've had the opportunity to review hundreds of resumes.  In doing so I've found that there are certain things I scan for in a resume.  If I scan and find what I'm looking for quickly, you'll get a phone interview.  If it isn't there, or I don't find it on a quick scan, you might be out of luck.  

So here are some of the things I look for in a resume:

Your Name - In a large, bold font at the top of the page.  If I met you at a recruiting event and I somehow managed to remember your name, being able to flip through the stack and find you is going to be to your advantage.  Too often I see resumes where the name is lost somewhere in the page, and I have to go hunting it down.

Contact Information - Give me at least your current e-mail address and phone number where I can reach you.  In this age, mailing address isn't that important, but it doesn't hurt.  It should be near the top by your name.

Objective - A one line meaningful objective.  What are you looking to do?  Do you hope to climb the corporate ladder?  Happiest writing code all day?  Part time, full time, or intern?  Like dealing with customers?  Let me know so we don't waste each other's time.

Categorized Skillset - This should be a bulleted list of your major skills that you feel comfortable using.  This is what I'm scanning for to see if I will read the rest of your resume, and if you'll get a phone interview.  Do not pad this section with skills you no longer use, or would not feel comfortable being tasked with.

Job History - The job history is both a blessing and a curse, and it is where I see most applicants struggle to find the right way to discuss what they have done.  My pet peeve is to get a resume that reads like a personal diary.  I have had folks submit 17 page resumes.  I simply don't have time for that.  Be concise.  Three pages or less.  Backup the skills you bulleted earlier.  Tell me when you used your skill, and in what way.

Education - The education section is not a deal breaker for me.  If I've found the skill I'm looking for, and you have work experience to back it up, then you can leave it out.  If you are switching careers and have no job history with a skill, include your education as an alternative reference.

Last year I spent some time making campus visits and collecting resumes from students.  Here are some things to avoid with your resume:

Paper - Students spend an inordinate amount of cash on having Kinkos print their resume on the finest paper stock they have.  Kinkos loves it, especially at 75 cents a copy.  The truth is, as soon as I get your resume back to my office it hits the scanner, and your original hits the recycling bin.  You'll need lots of copies, so use whatever cheap paper stock is available.

Fonts - I don't know why folks feel an intense need to use fancy, script fonts.  They are hard to read, and that isn't helping you.  Don't stress on the font, just use the default for your word processor and forget about it.  

Clubs - I've heard recruiters recommend including your professional and non-professional memberships on your resume.  Frankly, I don't understand why.  Your membership to IEEE or the local Kiwanis doesn't tell me anything about your aptitude for my open position.  Save it for the face to face interview.

That is all that comes to mind at the moment.  I spent this past weekend brushing up my own resume, so all of these things were fresh in my mind.  If you have any additional tips or pet peeves for resumes, I'd love to see them in the comments.

The Economic Crisis

My wife asked me a great question last night, "Are we really in an economic crisis, or are we only in trouble because the news is telling us we are in trouble?"  In other words, are all the layoffs, plant closings, and personal penny pinching going on around the country truly a reaction to the current economic condition, or are we just reacting to what we are seeing on the news (a self-fulfilling prophecy).  It is a little of both in my opinion, but you have to really look at what has happened to our economy to understand why I say that.

So what has happened?  In my understanding, there was a lot of bad debt out there, and it finally got called.  The ridiculous mortgage debt gets the lion's share of the blame because it was by far the most readily visible form of bad debt, but there was lots of other bad debt mixing around hidden in accounting books and financial forms not so readily recognizable to most folks.  What happened was that this bad debt that could never be recouped simply became too great.  Financial institutions were forced to realize that they were never going to be able to call those debts, so they had to write them off.  Unfortunately, there was often only a pittance of tangible assets to back those debts, if anything at all.  This means that when the financial institution wrote off the debt, they didn't have any collateral to recover.

Take the example of a home mortgage.  Let's say that the builder constructs a home and sells it for $100,000.  Let's say that this home is in an area with explosive growth.  The first owner then sells it to owner #2 for $200,000.  Owner #2 sells to owner #3 for $400,000.  Finally, owner #4 purchases the property for $1,000,000 by taking out a loan from his bank.  Owner #4 is not able to make a down payment, and elects to take on a interest only 2 year mortgage that will re-adjust to the current lending rate after two years and become a 30 year ARM.  On paper, owner #4 now has a tangible asset (the house) worth $1,000,000 and an outstanding loan of $1,000,000.  Let's say the interest rate was set at 6% so his monthly payment is $5,000.  Now, let's say owner #4 only makes $6,000 a month.  After a couple of months of being able to make his payments, he starts to fall behind.  After 6 months, he simply can't pay, so he stops paying his mortgage altogether.  The bank forecloses on the property and evicts the owner.  So now the bank has a (on paper) $1,000,000 property ready to sell in a hot market.  However, imagine that this happened for EVERY property in that neighborhood.  Or at least a majority of them.  Suddenly that $1,000,000 home isn't worth quite so much.  In fact, it may fall to the original builder price of $100,000.  This means that the bank is out $900,000.  Even worse, it is out that kind of money on every home loan that failed.  

The net result is that the lending institutions were incredibly cash short.  Without any money to spare, the lenders have to be very rigorous in determining who they will lend to, and have to increase rates in order to make any attempt to recover from this loss.  For some lenders, it is simply too much, and they fail altogether.  We saw this on a daily basis through much of the third quarter.  For others, they reach out for a government loan (that $700 billion dollars you've heard so much about) to keep them afloat long enough to start recovery.

Now comes stage 2.  The majority of businesses rely on some form of short term credit or debt to get by.  Whether it is a car salesman who needs short term debt to acquire inventory, or a small services firm that uses credit to fulfill paychecks, short term debt is a primary cog in the business machine.  With little money to lend, only the most reliable businesses are going to get the credit they need.  Those who don't are forced to make some hard decisions: fold the business, reduce costs (through layoffs), or find some other cost savings measures.  It's not a free ride for those businesses that do receive their credit either, as they get much less than they had hoped for.  The net result here is what you see in the news every day: massive layoffs and corporate bankruptcy.  

So what's next?  Stage three (again, my own interpretation here) is a drastic reduction in purchasing, both at a personal and corporate level.  Sales predictions for every business are heading south because there is very little money available to buy any more than the bare necessities to get by.  All of the workers that went through layoffs are cutting every corner they can to get by until the next job comes along.  Businesses aren't investing in new equipment until their own sales improve.  It's a nasty downward cycle.

And here is where I get back to my wife's question: does the financial crisis really impact us?  To some extent, yes.  My company is very profitable, and we look to remain profitable throughout these tough times due to the nature of our products.  However, we do recognize that sales are going to be significantly less, so we've made some prudent cost cuts to help insure our safety.  One of those cost cuts includes my not receiving a salary increase this year.  This across the board measure will help save the company millions, and will help us to avoid any layoffs.  So in that sense, yes, the economic crisis has affected us, but only by three degrees of seperation from the root cause.  On the other hand, I have no concerns about losing my job, nor of not receiving my paycheck.  Although the news talks every day about personal spending cuts, our house can continue to live as we always have.  Part of this is due to job and financial security, and part of that is due to the way we live.  We have always chosen a lifestyle that means living well within our means.  We don't carry balances on credit cards, nor do we regularly depend on short term debts / credit.  Our only debts are a car loan and mortgage, and we've made sure those are well within our budget to pay each month.  We also were prudent savers, with four months salary in our cash reserves as well as healthy 401K, Roth IRA, and 529 savings plans.  This may come off as a bit boastful, but it is because of our conservative behavior that, for the most part, this economic crisis will not have a significant impact on our lifestyle.  In fact, this may be a time where our lifestyle improves due to the increased buying power of our dollar.  

So in answer to that original question, yes, we as a nation and as a world are in a very difficult economic time.  At a macro level, the economic crisis is real and great number of people are going to be affected by it.  The only way out of it is to find a way to recover from the bad debts that started this mess, prevent it from happening again, and make good credit available to those who can pay it back.  At the micro level, assuming that there are no further bombs to drop, our family will feel very little affect from this economic crisis.