May 2017 – Solving Citizen

How To “Fix” a Free Market

Free markets (and the world economy in general) can be lucrative to predict, but that doesn’t stop entrepreneurs from enduring and becoming successful. Here is a brief summary of economics in the role entrepreneurs play:

There arises a desire or demand in the market that will remain until there is a remedy provided by an entrepreneur. This remedy is value creation which is deserving of compensation. The compensation is converted by the entrepreneur into capital that can be further invested or stored wealth.

This very means of production is what drives the economy. You might hear the common misconception that spending is what drives the economy, but nothing could be further from the truth. It is the production, delayed satisfaction and savings that drive the economy. Also inherent in entrepreneurship is risk. Risk is what keeps people from becoming an entrepreneur. I want to show you a couple of ways of eliminating some of that risk so that you might be successful no matter where you find yourself in the market.

Majority rules in the free market economy and people vote with their dollars. That is why it is he sensual for an entrepreneur to determine with the voice of the customer truly is. There are many tools to determine what the VOC is.

These tools help you figure out what’s important to your customers, what’s profitable to you and if your priorities are consistent with theirs. You can use; Customer Segmentation to identify different needs for different customers, or you can use Kano Analysis to help you define your customer’s priority level of your different services.

Tools like this will help you determine the voice of your customer no matter where they are in your economy. You could navigate a decent economy like the one in America where there is very little restriction to capitalize on, or even in the harshest economic conditions like in Venezuela where your customers are starving.

I guess what I’m really trying to say is that if you’re afraid to risk and you have in your mind that you might fail, then you might be right. But I for one am a winner, and “winners win” no matter how many times they fail.

-Brandon

Own your own satellite for $1,000?

The average person today can’t even fathom the dream of owning their own satellite but here we are. What an amazing and wonderful time to be alive! And as companies like Spacex work to reduce the cost of aerospace infrastructure, the crazy idea of space travel for the common man is becoming a reality before our very eyes. The rocket industry has its role in this story, but now I want to focus on the growing industry of the space travel business and the cost reduction of satellites.

After 2010 NASA started a program to make the cheapest and smallest satellite possible. Because smart phones are more sophisticated than most satellites in orbit, the idea was to make a satellite that runs on Android. This idea was revolutionary because at the time all you could do was higher a satellite imagery service like Digital Globe to do space travel jobs for you. Since then we have seen the beginning of a variety of satellite companies like Planet Labs, Spire and Skybox Imaging (which was purchased by Google in 2015).

In the past couple years colleges like University of Kentucky and Arizona State have had students building their own satellites and putting them up to into orbit just to push the limits of the industry. Arizona State even reduced the cost of theirs to $1,000 (and an additional $20,000 to launch) A few things that satellites can do include television, telephones, navigation, development and space science.

Now I know what you’re thinking “what would I do with a satellite?” Well if you’re a farmer it could help you determine clement and environmental change, and it will assist you with land stewardship. For people who travel to the remote places in the world it can give you a reliable signal without having to rely on a ham radio. You can even get an attachment for your iPhone to make it a satellite phone for around $500!

satellites and internet are changing our world so much that organizations like Ahumanright.org are claiming internet service be converted to a right. If you are a business owner it may be inevitable that you invest in the space travel industry. Whether through a mandate, or subsidy it is likely businesses will be taxed to create a cost efficient infrastructure for the world to have wifi.

Wherever this journey takes us it will be an amazing one. You may start out by having the best Instagram photos or becoming your own internet provider, but may end up taking that venture into interstellar worlds. Who knows what will come of that.

-Brandon

Will the dream of self driving cars be replaced by flying cars?

Have you seen the new commercial where the car drives itself? It’s so exciting to see the future unfold. I remember watching George Jetson fly around in his car thinking “that’s what my future is going to look like”, but as time ticks on, my future seems to look more like the matrix (or some other post apocalyptic movie) than the cartoon of my childhood past.

While I don’t see myself becoming a car battery in the distant future, I do think that things won’t be the way I always thought they would. Now keep in mind I am presenting you with my wild speculation, but hear me out. Self driving cars have much anticipation and analysts think that within a decade our economy will be hit hard by self driving automation, but I’m not seeing it come from automobiles.

Already we’re seeing homeowners insurance being reduced because of automation and the LA Times has mentioned that self driving cars could flip the auto insurance industry on its head. But that’s not all automation is doing. It’s also giving us software to help on a global scale. A farmer can deploy a drone that will fly over an area miles wide, run the images through an algorithm, and tell the farmer what course of action he must take. Throw that software into a network of drones like they did in the 2017 Super Bowl halftime show, and the sky is the limit!

Amazon has already invested in infrastructure for an air delivery system, including airplanes and even a company to develop their drone delivery service. In addition their ambitious projects are helping to develop regulation that will likely evolve and reshape the aviation industry.

Right now the closest I can get to my dream of flying around the skies like George Jetson is to jump in a helicopter and fly around, but such a dream would be too costly for the average person to achieve. Although they are coming out with automated systems for Helicopters, insurance prices are too high for the technology to make an impact on the aviation industry to favor the consumer. Also, we are a long way off before drones can carry people off into the sunset, but that’s not stopping companies like Ehang from trying.

Now back to my wild speculation. Automated driving systems will make a big impact on our economy and our future, but they will only last a short time. It will be like that 5 minutes you had a pager, and then the cell phone came out. When the line between helicopter and drone disappears, and insurance prices fall (which is a major reason for high aviation costs),we will see prices in aviation fall. Finaly we will see insurance liabilities transfer from the driver or pilot to the automated network provider. We will see the flying car become a reality.

So. Is it a far-fetched childhood dream to have a flying car? No. I may even see it in my lifetime.

-Brandon

Musical.ly killed the MTV reality star.

I remember the good old days when I used to have to get up and fix the rabbit-ear antennas on my television set. We had to turn the knob to change the channel until one day cable was affordable enough for us all to enjoy. Finally! We had a remote control to flip through a new fantastic library of channels. The infrastructure required for this to happen was under my radar, as well as many other customers who watched Hollywood unfold into this huge monstrosity.

Cable was a place where you could have a channel dedicated to an entire subject. You had news networks, sports networks, history, and SCI-FI. However cable television was fundamentally changed once audiences got their first taste of reality TV. Soon after Hollywood spun out of control when YouTube hit the scene and everyone could have a channel dedicated to themselves.

Although people will occasionally tune in to a do-it-yourself house remodel or pause mid-scroll to see that delicious meal pop out of the oven, the cable networks are quickly loosing their viewers to streaming services like YouTube. The infrastructure is again changing and unfolding into an even larger monster than the one before it. The infrastructure is simple enough, in fact Amazon even has a package that will enable you to bypass the cable network altogether. Really all one has to do is subscribe to a cable and phone network and they can watch anything they want. But what do they want to watch?

Us!

We are watching anyone and everyone. The truth is that most people have access to the technology that was once a fantasy far far away in Hollywood. We can build a channel or even a network online using YouTube or similar services. It is not uncommon for some shows to transition from YouTube to Netflix, or vice versa. The streaming services that Amazon, Netflix and YouTube are offering are seriously jeopardizing the cable networks. In addition, Facebook is going to start making it’s own original content to compete with Snapchat’s shows, and YouTube just announced that they’re going to start streaming ESPN sports which will be the final nail in the coffin of cable television if they don’t do something.

It is an amazing time to be alive and witness such power being wielded by the masses. It gives me gratification to see reality TV ridden channels like MTV sink because people are taking their music videos back through karaoke, in apps like Snapchat and musical.ly. Not to mention Spotify and SoundCloud are enabling any musician to grasp the power of the record industries. Also Amazon is going to roll out a next generation of Alexa with a TV screen on it.

Ultimately it warms my heart to realize that each individual has access to what was once unobtainable Hollywood magic. In my opinion people have little reason NOT to start something up themselves. If there can be a channel for everything, then people can have a channel for doing anything. So go build a studio with your smart phone, and see if you have what it takes to be a star. Who knows? I may just tune in.

-Brandon

Modern day Trading and Bartering

The term trading and bartering seems ancient. One might think of cavemen trading shells or Indians trading beaded jewelry but what some people don’t realize is that it’s very common today even with the biggest corporations. Take Facebook and Google for example. They offer what seems to be a free service, but actually they are just trading that service for information.

The idea is to create value for somebody else through a service or product. Then that value is traded for other value from another party. Through this basic concept of exchanges in the market, economies will thrive. In fact I have traded a service in this very blog post. In exchange for coverage of my blog I have promised another I would mention him in one of my blogs. I can’t think of a better blog post to mention him in then the one I could use him as an example. (Thanks Tim it’s nice to work with like-minded people)

I met Tim through a bartering service called Simbi. Simbi is a place where you can trade a product or service for another product or service. They also have their own credit system they use Called Simbi’s. The information on my website to the particular services I offer are here. I have had somebody come and clean my house, come and trim my dogs nails, and cut down some metal shelves for me and more, through services on Simbi. In exchange I have done things from critiquing resumes to helping people move.

Trading and bartering seems to be becoming more and more common as more people struggle trying to fill the holes in their finances. I have had family members who had their automobile professionally painted through an exchange of another service. Also people are starting to sell more and more items online through services like Craigslist or the Facebook market in addition to services like eBay.

I want to talk a little about the purchaser and vender relationship. Services like Simbi and The Facebook market bring an aspect to buying and selling things that is missing from our society today. Because we use money for an exchange of goods and services the transaction is impersonal. This is because it’s quick and there is rarely a long-term relationship developed between purchasers and vendors.

W. Edwards Deming (who I have talked about in the past) says this about purchasing:

“economists teach the world that competition in the marketplace gives everyone the best deal. This may have been so in the days gone by, when the baker had his customers, the Taylor his, the cheese-maker his, and so forth. In those days, it was fairly easy to make an intelligent purchase.

It is different today. The price tag is still easy to read, but an understanding of quality requires education.

The purchasing department must change its focus from lowest initial cost of material purchased to lowest total cost. This means education in purchasing. It is also necessary to learn that specifications of incoming materials do not tell the whole story about performance. What problems does the material and counter in production?”

If you plan on managing ANYTHING Out of the Crisis by Deming is a must read.

He also explains why it is so important to have a strong relationship between supplier buyer. He says it is important with continuing delivery of material. Although your vendor might have a higher price than their competitor, over time you will pay less. This is true even if you were to buy at the lowest cost from another vendor.

Ultimately, the greatest value of any transaction is the relationship between the two parties. The cooperation of the two will create long-term quality both will benefit from and become prosperous.

-Brandon