Gates on "Stuff"

Where the stimulus money is coming from

2009-12-29T16:26:00.004-07:00

I've said this to many people in several different ways, but what this recession really means for most North Americans is that they won't retire as early as planned or that they'll have to continue working at least part time to buffer their savings.

Well, here's some talk from Calculated Risk with a great quote courtesy of the NY Times.

“What the average citizen doesn’t explicitly understand is that a significant part of the government’s plan to repair the financial system and the economy is to pay savers nothing and allow damaged financial institutions to earn a nice, guaranteed spread,” said William H. Gross, co-chief investment officer of the Pacific Investment Management Company, or Pimco.

Of course, this basically screws over fixed-income retirees, but it also damages prospects for those close to retirement. If you're 60 and planning to retire at 65, you're basically making no money in safe investments, but you also don't have any time to "ride out" highly volatile investments like stocks. Unless, of course, you wait until 70 or 75 to retire.

It sounds absurd, but what else are you going to do? We've put ourselves into a really tight spot here. The Obama plan (for better or worse) is to inflate the money supply, which is going to be done at the expense of those people who want to retire. To be fair, the McCain plan wasn't really any different.

I guess the big question is really if this is simply to be expected? Personally I think the whole concept of everyone retiring at 65 and living to the ripe old age of 90 is also pretty absurd, so though I blame the US for making some pretty bad financial decisions over the last 3 decades, I also think that we have to get over our delusions of multi-decade retirements for everyone.

Classic fluff

2009-04-04T17:59:00.002-06:00

Here's a recent ZDNet article: 10 ways to make your boss love you

This is pretty must a classic fluff piece. Filled with specious comments and even contradictory.

"Simply doing your job isn't enough anymore..."

Huh? My job is to bring in more money than I cost my employer (i.e.: to provide profits). If I continue to provide direct profits for my employer how am I "not doing enough"?

"...- you have to make sure your boss knows how well you're doing it."

No really? Wait a second, isn't it my boss's job to know how well I'm doing? If my boss doesn't know how well I'm doing and I don't know how well I'm doing, am I actually doing my job?

If you and your boss don't know how well you're doing then you have problems way beyond these tips.

If you really dig into these tips, most of them are your job.

#1: Make your boss look good

Your job.

#2: Do more with less

#9: Automate it

IT is automation. Automation is fundamentally "doing more with less".

#3: Be positive, proactive and professional

#5: Get back to basics

Be professional = Behave as if this was your profession = Do your job

#4: Talk the talk

"Speak the language of the business...Make sure you are seen as involved in activities that lead to revenue generation"

Language of the business = Your job

Generating revenue = Your job

#7: Stay informed

Welcome to IT.

#8: Become a collaborator

Your job in IT is to solve other people's problems. Failure to collaborate is a failure to do your job.

#10: Be special

"If your existing skills don't match up with the needs of the business then make sure you develop some news ones."

Does this quote even make sense? If your skills don't match up with the needs of the business, what the heck are you doing? I mean *your job* is to meet the needs of the business, but if you don't have the skills to do that what the heck are they paying you for?

So like I said, the piece is really fluffy. Basically tells the reader to do their job.

The Times they are 'a-changing

2009-03-31T23:31:00.002-06:00

Well, we know that Newspaper are going to die, and we'll have to see about print media in general. In fact, my current guess is that the next decade of iPhones and Blackberries and Kindles and podcasts and audiobooks will signal a "paper reversal". In no way do I expect "paper" copies to go away, instead I expect them to slowly be limited to only specific, revered content.

But hey, I'm already receiving my bank statements and pay stubs electronically. So the amount of paper-only content is fast diminishing.

However, I have two great links about paper today.

Time Magazine talks about the End of Excess. Which opens with a great line:

Don't pretend we didn't see this coming for a long, long time.

A few other choice quotes:

We cannot just hunker down, cross our fingers, hysterically pinch our pennies, wait for the crises to pass, blame the bankers and then go back to business as usual...This is the end of the world as we've known it. But it isn't the end of the world.

Which echoes things I've been saying for a long time. The US is going to change and it's going to change very dramatically. The "middle-class" is no longer going to be the center of this giant bell curve, things will tier much more. The US will need a broader base of producers, of people working dirty jobs.

Of course, with such a small population (on a global scale), the only way the US can stay ahead of the curve is to become an intellectual mecca for the new generation of problem solvers and thought leaders. Of course, with such a small realy population base and an underfunded education system, there will be a need to import these people.

Further increases in productivity and prosperity require ingenuity and enterprise applied at the micro scale... As China and other developing countries finally achieve the industrial plenty that we enjoyed 50 years ago, the U.S. can stay ahead once again by pioneering the next-generation technologies that the increasingly industrialized world will require...And no other nation assimilates immigrants as successfully as the U.S.

Those are just my choice quotes, the whole article is a good read.

And here's a good summary about the death of the newspaper. I think this one quote really sums it up nicely:

It makes increasingly less sense even to talk about a publishing industry, because the core problem publishing solves — the incredible difficulty, complexity, and expense of making something available to the public — has stopped being a problem.

He goes on to mention that we don't really have a good replacement model for all of these journalists we're putting out of work. Personally, I get the feeling that between ease of publisher, ease of search/aggregation and ease of rating, it's quite probably that the future of news will be a truly distributed network. Not an Associated Press style of "distributed network", but rather a loose network of data collectors and aggregators and researchers. Each of which can produce data for the next set.

In the article he makes a mention of reporters attending a town hall meeting "just in case". But in this new era of data, it's quite possible for one to film the event, have it edited for highlights, transcripted and then reviewed, blogged, twittered & pod-casted by multiple people all within hours. And unlike the previous model, these people don't even have to be the same the same people or the same group.

Of course, none of this is very conducive to being done with paper, which may be why Time is calling for changes and the Times will be changing.

Irrational Pessimism

2009-03-30T02:17:00.004-06:00

This is in reply to a post on MillionDollarJourney.

@Ed:This recession is, of course, not over yet and may deepen, but none of these statistics are expected to get as bad as the prior recessions.

There are several logical flaws in the comparisons here:

#1: The interest rate on today's mortgages cannot reach the level of those previous recessions. There is already an excess of available homes and lots of people still on ARMs. Interest rates that high would absolutely destroy the economy.

#2: The interest number in 1981 was high b/c of inflation. Volcker, the Fed Chairman, wanted to wring out inflation by slowing the growth of money. He basically raised interest rates until the stagflation stopped.

#3: Your S&P 500 and TSX lines are both based on nominal differences. For a fair comparison you should calculate net change plus inflation. Either way, it's still pretty clear that the drops last year are in line with the drops in the other to recessions.

#4: Inflation, what models do we have stating that this isn't going to sky-rocket?

Clearly, the 0% inflation is due to the fact that the gvmt "printed" money approximately equal to the amount of money that was simply lost via bankruptcies. Of course, the 0.1% number dates back to January, but the most recent number that we have is from February.

Since the end of February, Obama has agreed to a trillion dollars.

The US is likely going to run a $2,000,000,000,000 deficit this year. That's two Canadian GDPs. Much of that money is going to come from Quantitative Easing, i.e: simply inventing money. In fact, that's the goal, the government wants to create inflation. From Paul Krugman of the NYT:

...having some inflationary effect — is what the policy is all about

So we're going to have inflation. We have to, but you haven't seen it yet b/c the money is being invented right now.

What's more, Obama has promised more trillion dollar deficits. Without a dramatic increase in US production, these deficits are going to cause significant inflation.

#5: The numbers are still getting worse.
An average of 55 forecasters in the January 15 Wall Street Journal survey expect real GDP to eventually reach only -2.1%

January 15 predates the enstatement of the Obama administration. Obama has likely seen the most active 100 first days of any president ever. He has produced several plans that simply did not exist in any way on January 15. You need to get more recent data than this.

Industrial production appears to have bottomed in September 2008.
Industrial production in 2009 has been down for 4 months.

The numbers I'm reading are even lower: From February 2008, industrial production has declined by 11.2%.

The news is full of stories of massive lay-offs, but unemployment is only expected to rise to 8.9%
Unemployment numbers are currently at 8.1% (from 7.6% the previous month). And across all sectors:
In February, job losses were large and widespread across nearly all major industry sectors.

The US national debt is into record highs outside of WWII.

The US is operating a tremendous trade deficit and has been for 25+ years. That number will not turn around.

The only politically feasible way out of the mess is (sadly) the printing of money combined with real economic growth. Of course, China's not really happy about the part where the government prints away its debt (and Canadians should be pretty peeved as well).

But the US has to find a way to convert their dollars into real assets and frankly they have some of the most expensive assets in the world, so they're not doing really well in that category.

#6: Everyone is wondering how low the stock market will get, while trillions of dollars sit in cash on the sidelines waiting for the right time to jump back in.

Where does this data come from?

From what I can see, the banks and insurance companies are tragically under-capitalized (i.e.: lacking in cash). The banks don't want to mark their assets to real market values b/c they're complaining that there is a lack of liquidity in the market. The current US plan with the "private/public partnership" is founded on the concept that these assets would be under-valued if sold at current market prices b/c of a lack of competition and liquidity. So the US government is betting a 500 to 1,000 billion bucks and providing massive leverage to private investors in an attempt to heal the banks. And while this is happening you're claiming that many trillions of dollars are sitting around just waiting to be invested.

If these trillions are waiting to be invested, why does the US government have to cook up plans with 12:1 leverage?

@ED, I don't think that you've made a very good case for yourself with one chart, old data and zero hyperlinks. It's obvious that your data doesn't add up. It's also clear that you're missing something really key about the US economy.

If they do not reverse the trade deficit, the economy will collapse. It's very key that we understand the size of the deficit. The US has been on a 25-year credit card spending spree and they don't have an easy way to even start paying back the money without dramatically "tightening their belts".

Even then a trillion dollars represents $33,000 for every US citizen. That's one median income here in Kansas City. That's a lot of debt, it's not going to be easy to pay off.

I'm going to posit that we're actually under-estimating the breadth of this financial crisis but that we'll have to wait until 2010 for it to widely understood.

The "Time" has yet to come

2009-03-12T23:20:00.006-06:00

Last week Time Magazine ran a special on the US financial crisis. The first article is House of Cards: The Faces Behind Foreclosures. The article is centered on two Kansas City homeowners both facing foreclosures. I think that a few choice quotes from the article really speak to the root of this US financial crisis. People simply don't get "it".

The crisis is fundamentally about wanting too much at once. But the face it has consistently shown is one of over-leverage. Over-leveraged people, over-leveraged companies and an over-leveraged government (ostensibly all the same thing).

This article tries to paint a picture of those getting those getting the short end of the stick, but all I see are over-leveraged people out of time.

A few choice quotes:

We have entered the one-strike-and-you're-out era. One lost job. One medical emergency. One bad risk or misjudgment of the heart...

We're geared to believe that risk begets reward and our tomorrows are brighter than our todays. One-strike-and-you're-out is a neck-snapping reversal for a culture accustomed to assuming that fate is a welcome friend...

People like Paula Stevens and Joseph Zachery weren't flipping houses or lying on their loan applications. They didn't pile up mountains of credit-card debt. They worked hard for what they had and shared their modest portions with others...Their bitterness stems from a feeling that they've held up their end of the social contract, but now the terms of the deal have been rewritten by malign forces....

Not everyone who has fallen behind on a mortgage is a loser complicit in the housing collapse.

That last line is from the closing paragraph. (emphasis mine) So the big question here is "are these two people 'losers'?" Are these two really innocent bystanders in the housing collapse? I think the answer is no and the reason should be clear simply by analyzing the risks under-taken by both parties.

Joseph Zachery

Occupation: Firefighter from 1986 to recent. Ended at $60k / year.

House: $100k house, needed renovations

Worked a second job: Like most firefighters, he always had a second job...he started his own business, demolishing houses condemned by the city.

He used the equity from his house to buy demolition equipment, resulting in a mortage where "he owed nearly twice the original purchase price."

Crisis: he gets into an accident on the job.

He's shuttled around between hospitals, he gets full disability from the fire department (plus some electroshock treatment?) and he's now living on pension. He get $50k / year. It costs him $800 / month for medical, leaving him with $2,400 for everything else. But get this, his mortgage is $1,600! On a 100k loan that doesn't make any sense. But the problem here is that he actually owes 190k which he's paying off at 9%.

So why did he end up here? Was it the work accident? What did he do wrong? What are the risks he took?

Leveraging non-existing home equity:
He didn't pull out just the home equity he "actually had" from his down payment or his mortgage payment. He pulled out "speculative" equity that the bank extended based on the prevalent housing prices at the time. He wasn't borrowing "his own" equity, he was borrowing equity that he hoped the house would have.
Rather than taking out a business loan for his small business, he took out a loan against his home meaning that a crisis in his life would likely cause his to lose his home.
Leveraging his ability to fix the home:
As stated, the home was a fixer-upper. He was banking on his ability to fix the house in order to prop up the value of the house. Of course if he wasn't able to fix the house for some reason, it's value would bleed from lack of maintenance.
Leveraging his second job:
He knew his pension income and he knew his medical payments, he knew the money he had to work with. Based on the fact that he's losing his home, it's pretty obvious that he wasn't going to be able to keep his home on just his pension. He needed that second job to keep him going.
Under-insuring:
This is a really big point.
There is no indication that he has disability insurance on his second job. Here he has a second job that he needs to keep in order to remain solvent. He's dependent on his own mobility and capacities. But he's not insured if he loses them.
Yes he had disability from the fire department, but that was only for his fire department salary. Where's his insurance for his other business?
He buys 100k in equipment, but doesn't buy 100k+ in disability to cover his potentially catastrophic liabilities.

So if you look at the risks, he was basically gambling that this wouldn't happen. He's unmarried, he's supporting his mother, his kid is in college, he's has no "backup support".

He's a firefighter, he runs into burning buildings for a living and he's gambling his livelihood and his home on the fact that he won't be injured.

So he got injured and lost his home.

Paula Stevens

Occupation: Gateway tech support. No college degree, serial "entry-level" worker. In her best year she grossed 42k

House: 3,000 sq ft, purchased in 1994. Re-financed 3 times, now owes 159k (@ 9%!)

Crisis: lost her job at Gateway and can't find one that pays as much.

So the obvious risks:

Living without a buffer:
"It takes $14 per hour for me to meet my bills...That's what I was making at Gateway when I was laid off. But no one wants to pay that much..."
If you're making $14 / hour, you need to be living off $11 or $12. How else are you going to save up cash for retirement or even just emergency expenses like job losses?
No professional development:
She made it to 56 and somehow doesn't have the skills that she can market for $14. There's no sign that she took college night courses or professional training.
Where did the equity go? the savings?:
She's 14 years into a mortgage and she owes 159k. The median home price in Kansas City during the last recent peaks was just under 190k.
But she bought in 1994, close to the bottom, 14 years ago. She most likely owes more on the house than its original asking price. And she's paying 9% on it to the tune of $1,400 / month.
And where are her savings? It doesn't seem like she had retirement plans of she would have money right now.
Family Obligations:
...but her oldest daughter, Maggie, 28, has a new baby and is enrolled in nursing school. "I just have to get her through that," Stevens explained

To put #4 in context. I am currently living in the heart of Kansas City in a luxury apartment in a premium location. I have 1100 square feet, 2 bedrooms and 2 full baths. In-suite washer/dryer/dishwasher and a few other luxuries. You could very comfortably have two people and child here.

I pay less than $1,400 after utilities. That's less than her mortgage and this is a luxury suite. You can get an older apartment or a townhouse down the street for $600 to $900. That would make it a lot easier to balance the bills.

So where does that leave Paula? She's obviously over-extended, but all of the signs are pointing to her basically not having savings. Her telling quote is this defeatist line: "That's how it works. You just keep starting over." Rather than spending her life accumulating, she just kept starting over.

My personal opinion (because it's my blog): neither of these people should be in their homes. They should both be renting, either really close to family or really close to public transit.

Disagree? I'd love to hear other thoughts.

The US labour problem

2009-03-07T22:32:00.003-07:00

Here's a great quote from the founder of Mint.com on the mint blog.

While the downturn in the economy has meant a flood of resumes for sales, marketing, and general business positions, the engineers, scientists, and researchers who actually make the next innovations possible are still in very short supply.

I think that he really captures the fundamental US problem. All of the job futures are in sciences & engineering. But the US has been a services economy for decades. Bankers and financial analysts don't actually "make" anything. Lawyers and Accountants don't really "make" anything. They are fundamentally just business overhead. Sales people help connect people and products, but a year in the US will show that we clearly already have more than enough people in Sales and Marketing.

Yeah, maybe I'm biased b/c I work in the computer industry. But if you look around at the "future jobs" boards, they're all centered around "making stuff". And that's what the US needs to do become financially solvent again. They need to "make stuff" that they can export. You can build a better battery and export that to China. You can build windmills and power stations and ship them across the world. You can train great scientists and have other countries license their technology. But you can't export Lawyers and Accountants. And you certainly can't export US bankers :)

Of course, the US has had some serious educational issues over the last couple of decades, especially in the realms of education in "Math and Sciences". So we have a populace that's ill-prepared to tackle the new problems.

The mint.com founder (Aaron Paatzer) suggests an increase in the H1Bs and other foreign visas. And he has a point. Smart people from around the world can migrate to the US and enjoy a US quality of life. It would make a lot of US citizens unhappy and importing "the rich" would definitely "make the poor poorer", but I strongly suspect that's going to happen anyways.

Maybe making the US into a mecca for brains will provide it a means of conquering its financial crisis. It's not a great deal for the "average American" who will still see a decrease in quality of life, but they're going to see that anyways. Maybe salvaging lifestyles for the top 20% of earners will at least provide reason for continued US solvency.

Big vs. Small in IT

2009-03-02T14:25:00.005-07:00

Posted this to Hanselman over the weekend, and it's probably worth a redux in my own blog.

The underlying issues being discussed is that Joel Spolsky ripped in to Uncle Bob Martin. A couple of summaries are available.

On to the reply:
@Scott, I think a valuable read relative to this topic is Malcolm Gladwell's book "Outliers". Bob makes that comment that "it takes 5 years for a developer to really become experienced", which is a statement backed up by the research in this book (10,000 hour rule). A lot of this podcast felt like "dancing" around the subjects discussed in the book.

The core of your podcast is dancing around the question of "What is good enough?"

The definitions of enough vary quite dramatically from project to project and person to person.

In particular the definitions will vary by the size of the project / company. And this is where Joel and Bob really work at odds. They are coming from two completely different realms of project / company. Let's say there are 4 classifications:

Small / Micro / Start-up
Medium, established niche
Large, thousands of users, typically a legacy base
Web-scale, millions of users (Google, MS)

Now Joel clearly comes from world #1.
Bob is from world #3 or 4.
Scott, you're from world #3 (& now #4).

For most developers in world #1 or 2, Bob's SOLID principles are at best guiding lights for solving the "next big bottleneck". (And there's a lot to be said about first having bottlenecks worth solving) There is simply not enough value generated by writing interfaces for the large mass of internal layers that are never exposed. Lots of objects simply don't need a "single responsibility", because the cost to change is very low. In my simple DB app, I don't extend more than 1% of my classes, so why do I worry about the OCP? In "Fog Creek" world, there's a lot of leeway in the term "Quality".

The cumulative sum of generating unit test for vast swaths of Maintenance screens simply doesn't justify the time spent on this screens. In fact, most people in world #1 & #2 seek out tools (like CSLA) quite specifically to generate Maintenance screens b/c they just don't justify any custom functionality.

Let's flip this into a practical application. (with no offense to Jeff Atwood here)

I can tell you right now that StackOverflow will not scale to 100x as it is currently architected. If the number of StackOverflow users grows by 100x the entire architecture will need to change. No, I've never seen the codebase, I've just listened to the podcasts (Hanselminutes and their own) but just listening to the problems it's obvious that things would need to change.

For example, to achieve 100x:

They would need multiple databases.
They would need specialized services to push data back and forth.
Your rep score would be updated every 60 minutes by a service (not in real time).
There would be a server responsible for updating RSS feeds. Data about updates would be pushed to the DB and replicated to bulk insert files on the RSS server to manage the reads against the primary.

As I said above the SOLID principles would be a guiding light in solving these problems.

They would need to break out interfaces for "high-communication" features and build standard interfaces for communication (Web Services, Bulk Insert files, etc.).
They would need to reduce connectivity dependence. Web servers would read from local DB copies and update themselves periodically.
LINQ-to-SQL would suffer as tables became stored on different DBs. They would need an IOC model for managing connections at a table level so that they could point connections at the right spots.

Of course, in the process of growing by 100x, they would move from world #1 into #3. And the nature of these SOLID principles is that they become more valuable as the scope of the project grows and the available resources to build that project also grow.

I work for an ad network, so I live in world #2 & #4.

In one world we serve 100s of millions of impressions in a day. In another world, we operate a user interface with 100s of users. The definition of "Quality" varies dramatically between these worlds. In one world, we can build drag & drop UIs with MS AJAX and leverage the servers for good response times. In another world we write these massively scalable and distributed apps with lots of interfaces and IOC and robust, error-resistant code.

When Joel talks about Bob having "never written much code", he's talking about Bob not having written very much of the type of code that Fog Creek writes.

When Bob lays out the framework for a new project he simply has too many tools that do not provide value in Joel's world.

When Joel lays out the framework for a new project he ignores many of the tools in Bob's framework because he's never really needed them before.

And that's OK... I mean look at StackOverflow, it already has every dev on its mailing list :). It doesn't actually have to grow 100x to cover its potential market.

IT misunderstood again

2009-02-01T01:42:00.003-07:00

So found this off the wire:

Study finds IT pay up in six areas, down elsewhere

Research firm's CEO says 'we've never seen anything like this before'

Here are the six areas:

Management / Methodology / Process
Database
Messaging and Communication
Architecture
Security
Networking

Now for skills that are down:

Application Development
SAP & Enterprise Development
Operating Systems
Web / e-commerce
Systems Networking

So in classic fashion, those trying to research the industry have fundamentally misunderstood the industry. And I think that the problem is obvious, how do you actually "track skills"?

The report claims to track over 354 IT skills. That's a lot of skills, of course, it could also just be a lot of fluff. Anyone who's looked for a job in IT knows that the market is acronym-crazy. It's also short on any form of acronym meaning.

I mean, what the heck is the difference between "Networking" & "Systems Networking"? According to the stats, that difference is worth 3%+ in pay.

What counts as "Web / e-commerce"? It's obvious that general e-commerce is becoming commodity, that's to be expected. But is "web" really worth less? Facebook app development, Google App Engine, Microsoft's Azure, Amazon's AWS... these are all "Web" technologies. Where do they fall? Heck, Azure and AWS are also Operating Systems technologies.

So get that, skills in AWS have actually dropped in value. Right.... Huh?!?

I think the reason the CEO has "never seen anything like this before" is really that he's asking the wrong questions. Trying to track IT pay by grouping across these massive skill sets is doomed to fail. In fact, trying to track IT pay by any grouping of skill set is seriously flawed.

And the reasons are simple:

There are too many IT skills and new skills are constantly being created
Each skill has a lot of gradients
Skills with different names can be very closely related
Skills are constantly being picked up by experienced people

So how anyone plans to track that is beyond me. Last year's "Database skills" are not this year's and they're not next year's. Why you would group them under the same category each year and then pretend that they correlate demonstrates a misunderstanding about the way this industry works.

Enough to Retire?

2008-11-12T14:33:00.001-07:00

Just came across the 10/10/4 model as presented at Mint.com. It demonstrates a pretty tenuous grasp of reality.

Comments below.

Jess:the life expectancy in the US is only 77 years according the the CDC

Is the current life expectancy or the life expectancy for people who are currently 20 and won't hit 77 for another 50+ years? Do we have a link for this?

Even if we change the model to 80 years (let's give medical science a little credit), that still leaves us with 45 years of working to 35 years of not working. That leaves us with 45 people working for 35 people not working.

Imagine that you're living in a (global) village with 80 people. 45 of those people do all of the hunting / gathering / farming / house-building. The other 35 people are either non-productive children or old people who sit around smoking pipes and eating food brought in by the other 45 people.

Either way.

If you save 10% / year for 45 years, and receive no effective pay raise between 20 & 65 (i.e.: pay raise = inflation). Then you would need ~3.25% real returns (that's returns above inflation) for basically the entire 45 years to meet the goal of having 10x your annual income. That doesn't sound like much, but here's some perspective.

Right now TIPS bonds are offering 0.7% real returns (they were offering 0.0% returns just a few months ago). Real Stock market returns over the last decade are into the negative. If you earn 0% real returns one year you have to make 7.5%+ real returns the next, just to make it up, that's not easy.

What's more, you're subject to a very critical period. At year 30 you have about 5x of your 10x. From year 30 to 45, you're only going to save 1.5x (putting you at 6.5x), which means that you're relying on 15 years of solid returns to make up that other 3.5x. If you have a 5 or 10-year drought, you could end up way short. And a 5 or 10-year drought is going to happen somewhere in those 45 years.

Finally, we made the very unsafe assumption that your "real income" doesn't change. Realistically, your income increases over time.

According to the 10/10/4 model: "...by the time you are 65, you will need 10x your income immediately prior to retirement to retire at the level you want.."

So you need 10x your final income, not your starting or even your average income.

Let's say you're 20 and making 30k today. Your "10x" number is 300k. You save 10% for 10 years and save just over 1 year's worth of income (say 31k). At the end of 10 years you make the big switch and find a new job earning 45k (again, no inflation). Awesome for you!

However, now your "10x" number is 450k, but you only have 31k in the bank. You're behind, right? You're at year 10, you should have at least 10% of your target number, but you only have 6.8%. So what if you continue to plow along for another 10 years and then get another pay raise to 60k? Now your 10x number is at 600k, you're 20 years in to the plan but you're way behind the curve. You should have saved 120k (+ interest), but you're nowhere close to that number.

And then you have to account for medical. If you're earning 60k but receiving 10k in medical benefits (may be low-balling in the US), you now need 700k in savings (not 600k).

You can see where I'm going with this. If you follow the 10% savings route and you also follow a normal pattern of increasing income throughout your career, the 10x goal is very difficult.
- Your increasing income makes previous savings insufficient.
- High medical expenses inflate your "10x" number.
- You need consistent returns well above inflation and you need them at the right times.

Don't get me wrong, I'm a savings advocate. I save 10% and then some in tax-advantaged accounts.

But I make no pretenses of making it to 10x without saving more, getting lucky or making some savvy investments.

Again, the model presented above is very broken. Readers can follow this at their own risk.

Extra Code Worst Software Waste?

2008-10-03T08:34:00.001-06:00

Please Note: this is an older post I found in my archives. Originally dated August 13.

Another blog reply, this time to a devlicious blog post by Derek Whitaker.

re-creating massive amounts of code is expensive and time consuming

Umm... no. If codegen is expensive or time-consuming, you're doing it wrong. If members of the team have a difficult time using code, you're doing something wrong.

You're simply attributing the problems to the wrong source. Godegen is clearly not the issue here. The issue is implementation and training.

So you come up with this as a substitute:

Code you create now, but do not have a direct, immediate need for NOW is waste.

But the NOW timeline is really short-sighted.

Here's a classic. We've rigged our generated entity code to have special handling on any columns named "CreatedDate" and "ModifiedDate". Of course, lots of the primary entity tables we created simply didn't have these columns.

Now, to start with, we don't have a reporting interface or any business logic associated with these columns, so according to your logic adding these columns (i.e.: adding code) is a waste. And of course, that continues to be true until a problem arises that is solved by having these columns (except that they don't exist). I can't now go back and add these columns and suddenly get the data, but hey at least I didn't waste any time, right?

The problem with only handling immediate needs is that it opens the door to ignoring common failures.

Take my example. I know from experience that having these columns on specific tables will be useful. Maybe not now, but definitely soon. And we're not talking about full table-auditing, just a couple columns. We can get that information for a time usage so small that it's basically free and you're telling me that it's a waste because we're not going to use those columns now?

As always, good judgment and experience must be applied when making decisions about what code and features to build. I've spent a lot of time "paying for" mistakes that were wrought from the "we don't need it now" mentality.

In the case of our two dates (Created and Modified), we had to fight through support issues that relied on the non-existent data. A year ago, our product didn't have a support team, so nobody put them in, we didn't need them NOW. That cost us time and money for what should've been a "free" feature.

Turns out we'll likely need a full change history on a couple of the tables.. That's fine, we can't get that "for free", so it's OK that we didn't "waste time".

And what about features that don't get used? If I build 5 features and only 1 gets used, is that waste? Technically it is, but realistically, not every feature is going to be a hit. In fact, it's generally acknowledged that failures are a very important component of success. Maybe it just takes the implementation of 5 features to find one that "sticks", all of that "unused code" may be a "success" in some people's book.

I think you can get my point here, waste is not as simple as defining code that does or does not get used. You also have to factor opportunity costs for the code that is written and the "timing of the time". Hours are not equal, the hour when your datacenter is down has a very different value than the hour I spent writing this post.

Calling unused code the "Worst of the wastes" is difficult to swallow without a little deeper comparative analysis. But given the difficulty of even analyzing the value of unused code, I think you'd be in for a challenge there.

Housing illusions

2008-08-12T13:44:00.002-06:00

MillionDollarJourney had a post about Cash Back Mortgages.

Instead of the usual comment, I've devolved into one my blog replies, original comments included.

@Nolan: However it does not change the fact that if you buy a house to live in it, and the payments are reasonable for your income, then you are better off owning than renting in the long run.

This has been hashed and re-hashed on this forum and elsewhere. The data in no way supports your thesis and I would urge not to spread such dangerous information.

At best, owning a home is a lifestyle decision with a set of associated risks. We can argue this elsewhere, but there are a dozen guys who've run the spreadsheets. You've successfully listed a few of the risks:
... the ones who can’t afford their payments, speculators (like you said), and the ones who panic and sell when housing prices fall.
but there are more:

Risk - People with jobs that are heavily dependent on some local resource (mill-towns, mining towns, etc). This is actually doubly risky, b/c if you're losing your job it's likely that nobody else is moving in which means that your housing "investment" won't be doing well at the very time you need to sell.
Risk - People working in highly transient / mobile fields. If you're in IT and changing jobs every 3-5 years (quite common), being tied to a location can be quite costly. If you're an athlete, a long-haul trucker, etc. similar logic would apply.
Risk - purchasing a high-maintenance house. Even if you can "reasonably afford the payments", you still need to afford the maintenance. A 20k basement repair on a 120k house is a realistic risk and would definitely wreck your financial plans.
Risk - property tax increases. As independent homeowners you're still on the hook for these taxes, Yes there are processes, but it takes personal time (read "money") and you don't necessarily have a lobbyist group on your side.
Risk - school district changes: This is primarily in the US where people pay premium home prices for "top-rated" school districts. A certain % of value is actually tied to the continued school district prosperity. Buying a house for your 5-year old could be a liability by the time they're 18 and it's time to "downsize".
Risk - Energy Costs: once you buy a place you're locked in to paying the energy required to keep that place running. If your rental place sucks up too much energy (due to size or just poor maintenance), you can move at the end of the lease or request changes (you're income, you have a good bargaining chip). If your own home leaks heat (or cold), you're on the hook for this cost. I don't know if you've noticed, but energy costs are going up almost universally. Right now, 50% of the earth's population is using about 4% of the world's energy, and we still haven't figured out that whole "cold fusion" thing. That's a lot of pressure for energy costs to continue to rise.
Risk - Politics: don't like that new factory that's being built just around the corner? Think it will influence your house price? Well, the ball's in your court now, b/c it won't be easy to move, especially with that factory weighing down on your home value. (also, see property taxes)

I want to echo one of Jordan's comments here: ...ignorant customers just desperate to get in before they’re “priced out forever” or other such non-sense.

If you are making above-average income you will not be "priced-out forever". The rules of supply & demand still apply. Either house prices will deflate drastically or the salary prices will rise to match the growing cost of living. House prices do tend to be stubborn, but since 1990 we've since house prices grow well beyond the rate of inflation, with people re-investing the money from their first place into the second (and third and so on). Barring government interference they're going to dip like every other investment.

Personal aside: I expect this dip to happen when the average baby boomer retires and "downsizes". But it may be happening sooner, check out this blog on Edmonton housing market (with lots of pretty charts). Notice the Supply vs. Demand and the Price and Inventory Comparisons?

If you want a home and can't afford one, just keep saving your ducats and investing elsewhere. Especially the 20-somethings and 30-somethings with "good jobs" (i.e. average or above-average income).

Did I miss any home-owner risks?
There are definitely some renters risks, but that's a different post.

Why I avoid "the news"

2008-08-04T12:04:00.002-06:00

I think Dave McClure from 500 hats, basically summed up CNN in one succinct diagram and comment.
out of a possible 20 "news" items on CNN.com, a full 15 focus on death (usually violent death), crime, weather, religion, or celebrity. of the remaining 5 items, 2 are related to politics, 1 is related to business / entertainment, 1 is science, and 1 is random. in other words, about 80% of news is simply death, weather, or fame.

Thanks Dave, couldn't have put it better, of course YMMV.

Consumer confidence vs House Prices

2008-07-16T09:24:00.005-06:00

I for one believe that most housing in the US is way over-priced. I'm currently living in KC and I'm seeing some "reasonable" prices. But I think it's worth noting that I'm making twice the median income and I can't see buying anything out here.

That's right, my wife doesn't work, so together, we make the median income for a two-person family and the cost of owning our own place is prohibitive. Of course, house prices are dropping, which makes me feel great, maybe I'll be able to afford one soon, but it looks like people aren't. I just found this graph on swivel (which is a pretty cool site BTW).

Of course, in the grand world of causation vs correlation, I'm going to chalk up the drop in confidence to more factors than just dropping house prices. If anything, it's likely the economy in general mixed with a healthy dose of "back-to-reality". For great helping of "back-to-reality", check out this post on MDJ:

California couple, family of 8, 100k / year:

No medical insurance for the themselves OR the kids.
$135,000 in credit card debt.
Two mortgages totaling $658,000.
Large mortgage with payments of $1800/month, but payments will increase to $3300/month in a few months.
They have 3 cars, 2 of which are leased, the other one they own. The cost is $1700/month.
Wife spends $300-$400/month at Starbucks (It was the wifes morning routine).
$60/week on tanning and manicures
$4k on hair extensions in the past 2 years.
Constantly shopping.
The wife would regularly buy brand new clothes for the kids, then have a garage sale a month later to sell the “used” items at pennies to the dollar. (This one blew me away)

Scary stuff.

Maybe it's time to practice "positive cash-flow techniques". Of course, YMMV.

MS Office by subscription

2008-07-02T23:26:00.000-06:00

Here's the news link from ZD NET:
New Microsoft Office subscription bundle to hit in mid-July

Basically they're bundling several basic services together. Some are comparing it to Google's free stuff, but it's also comparable to Mac's "paid-for" stuff:

includes a version of Office Home and Student 2007; Windows Live OneCare,
Microsoft’s PC management/security bundle; a few Windows Live
communication/collaboration services; and Office Live Workspace, Microsoft’s
online-collaboration add-on to Office.

I talked about this previously. And I honestly think that subscriptions are the future of all. Obviously, the "talkback" forum was filled with open-source people who don't "get it".

But I think that the populace is finally ready for the concept that everything on their computer is comprised of "services" and that software is alive.

Unfortunately, MS missed one big piece here: Outlook. The early adopters who will want this service are the same type of people who will also want Outlook.

Counter offers when leaving?

2008-06-24T23:05:00.005-06:00

Inspired by a couple of good links, original post here with further thoughts at Ron's wisdom and Frugal Dad.

Lots of great links and all kinds of neat ideas and lists of reasons “not to accept a counter-offer”.

But I think the reason is simple.

You don’t want to work for anyone who feels that the counter-offer is a good idea.

Sure it’s an ego boost for you, but it’s really desperate management decision. Do you want to bank your future on desperate management?

The game is simple, an employee generates X revenue and the company pays that employee Y, where Y is X minus expenses and a risk-adjusted profit margin. In fact, it’s a lot like the stock market (actually, it is the stock market, but that’s a different discussion). Either way, the goal of the employee is to maximize the hourly yield for the work they’re willing to do, they want to maximize Y. The goal of the employer is to maximize profit, they want to maximize X and minimize Y.

The problem of course is risk. If you “over-minimize” Y, then you drain X (lower productivity) or you lose X all together (employee leaves). In the grand scheme, employers have been doing a lot to minimize Y: reduction in pension, reduction in health care allowances, no more 20-year gold watches or 10-year sabbaticals, etc. But many employers still insist on making some silly decisions with Y.

In Patrick’s case (the original poster), the competition was willing to pay 30% more Y. Assuming that Patrick could generate an equivalent X, the company felt that Patrick was a small enough risk to pay him 30% more.

That’s a very big difference in evaluation. That’s the same thing as me thinking a stock is fairly-priced at $100 when you think it’s fairly-priced at $130. Of course, we commonly hear about 20 & 30-somethings jumping jobs to make these types of pay raises because it's the only way to get a raise.

There are typically three reasons this happens:

The company is doing poorly and cannot afford to pay the employees more. Or they’re likewise not generating money from having the employee around.
The company is trying to extract as much profit as possible from the employee or using the employee’s profits to fund a different venture.
The company really has no clue (typically poor management). Any/all of: they don’t know the market rates, they don’t know which employees are generating money or losing money, they don’t have a growth plan, they don’t have a succession plan, they don’t understand what the employee really wants…etc

In a case like Patrick’s I’m sensing a heavy dose of #2, with a little #3.

What I don’t understand is why they suddenly perceived me as valuable as soon as I mentioned leaving?

It’s up to management to manage and mitigate risks and they really blew this one. (And remember the profits they make are their “risk-adjusted” piece of the pie) Not only did they underestimate your value by 30%, they also underestimated the value of their counter-offer by another 10%. That they would even go back to “up the ante” again means that they were still suffering from a #2 brain fart.

So back to the original thesis. You don’t want to work for these guys.

If they suffer from #1, then they’re likely laying people off and even if you don’t lose your job, you won’t be getting a good pay raise.
If they suffer from #2 and they’re underpaying by 30% (or more), then they’re not showing a lot of foresight.
If they suffer from #3, then you’re resting the fate of your next raise, your next promotion and even your next paycheck on the back of someone who doesn’t have a clue.

You don’t want to be working for these guys. You want to be working for proactive managers. You want people who have vision, who can see problems before they arrive. You want people who lead, people who hire more staff before everyone gets too busy, people who give pay raises before you have to ask for them, send you to training before you need it.

So if your employer makes a counter-offer, they are not one of these people. They’re one of the hordes of reactive managers. Just because they’ve finally realized they’re behind and can afford to pay you more doesn’t mean that they’ve changed their ways and stopped being bad managers.

So don’t accept a counter-offer when resigning your job, you don’t want to work for the type of people who make counter-offers.

Of course, ymmv.

Backlash starts against 'sexy' databases

2008-04-29T12:44:00.002-06:00

Backlash starts against 'sexy' databases

Wow, actually a good summary of this new "anti-database" movement. Of course, the whole controversy all comes back to one guy: Michael Stonebraker. He started the storm in a few different places (and seems totally misguided).

But they, it's big enough that it reached the high scalability site. Link has lots of useful information and one great quote:

SimpleDB shifts work out of the database and onto programmers which is why the SimpleDB programming model sucks: it requires a lot more programming to do simple things...Programmers like problems they can solve with more programming.

I think that last line needs to be modified: Inefficient programmer like problems they can solve with more programming. I don't like making a bunch of problems for myself, especially when it comes to useless optimization. The goal here is to program solutions that require less programming in the future. You build tools that extend your thoughts and write more code for you.

That's what an RDMS does, it's just a collection of code that manages data so that you don't have to. Seems kind of foolish to pretend that we can do better at this than the pros.

What That Car Really Costs to Own

2008-04-22T10:49:00.002-06:00

Wow, MSN Money actually has a decent piece about Money... Oh look, it's sponsored by Consumer Reports.org. That helps with the explanation:
What That Car Really Costs to Own - MSN Autos

I can't really argue with many of their points. Consumer Reports seems to know what they're doing. I am annoyed with one thing, though it's purely philosophical. It's the concept of factoring in the resale value of the car.

Yes we have historical data, but who wants to be the one trying to sell a Honda on the year they start making lemons? Plus the resale value is only good if you plan on selling the car. Otherwise, you just drive all cars until they're worth some irrelevant amount of money and you call it a day. At that point you want the car that cost you th least to get to the end of the line. Of course, the cars that require the least repair also tend to be the cars the highest resale value.

So you're kind of "double-dinging" certain cars. Especially when they all become basically worthless after a certain time.

The problem with tech recruiters

2008-03-16T22:27:00.002-06:00

This quote was pulled from a post on the Joel on Software forum. The post is about providing a salary history to a recruiting firm. Partway down, a recruiter (likely with an axe to grind), makes a couple of serious posts. Most of the points are easily refuted or quite weak and somebody on the forums does a good job of picking these out.

But the recruiter also makes a good point:

Why don't we know the difference between a 60K and a 100K programmer? Because only a programmer could tell the difference and if the person was all hat, no cattle or the real deal. Most programmers would prefer to, say, program, than wade through 20 resumes and phone screens just to get to talk to two people who might be a good fit for whatever reason.

Of course she's perfectly right. And this is the fundamental problem with technical recruiters: They're completely unqualified to do the job.

It's not their "fault" per se, it's just endemic to the field. Being a good tech recruiter requires a ton of technical background, plus some business savvy, some sales skills, some research skills, networking skills and a ton of patience. Of course, if you already have all of these skills, then you have a job that pays way more than being a recruiter!

Personally, I would rather just avoid the recruiters all together and seek out the job I'm looking for rather than the other way around. Of course, YMMV.

Academia is doomed in the wired world

2008-03-12T10:38:00.002-06:00

OK, so we start with the mandatory link;

Student faces Facebook consequences

Basic premise is simple. The University wants to ban the student for managing a Facebook user group where students helped out on Chemistry homework assignments. The interesting thing about these assignments, is that they actually weren't even given the same questions!

So here's a kid facing suspension for making a virtual study group where people can't even really share answers b/c they have different questions.

There are two big problems here:

Study groups have existed forever and are a fundamental part of university, especially sciences. However study groups are prone to cheating.
Online access to resources have made learning more accessible, but they've also made "cheating" far easier. Universities are mildly scared about the accessibility part as they are financially vested in remaining the key holders. Of course, they're also publicly funded (especially in Canada), so they have to maintain some openness. But what Universities are really scared about is cheating. Credibility is ridiculously important for Universities and "cheating" undermines that credibility.

So cheating is the common factor here. From the academic mindset, the math is simple:
Study Groups = maybe cheating
Online = maybe cheating,
therefore Online Study Groups = definitely cheating

The logic is clearly flawed, and in this case it's pretty clear that no wrongs were committed. In fact, if people were using the group to cheat, it would have been trivially obvious to prove. If two students really wanted to cheat, posting up answers to a Facebook group is the worst possible way to do it.

Of course, the problem runs much deeper than that, this type of behaviour demonstrates a deep-seated fear in the academic halls. And it stems primarily from problem #2.

In all reality, the University should be providing and managing groups for this type of "study grouping". My wife graduated from the University of Manitoba last April and they had a "WebCT" system (now Blackboard). Systems like this increase transparency and provide quality resources for students, but even today it's tough to get full support from the older academics.

I personally love this concept of openness, but maybe the older academics are on to something. They have long been the private gatekeepers of the secret academic world. By increasing accessibility and allowing things like on-line study groups, they've increased their burden of work while reducing the value of their time.

The wired world is a connection tool for everybody. The web is a democratizing tool in an academic world that is far from democratic. This whole concept of suspending a student for managing a virtual study group is nothing but a demonstration of a deep-founded academic fear.

The irony here is that kicking out our hero will likely cause a backlash that will cause the university to lose credibility in the eyes of the public.

It's a bad place to be, of course YMMV.

4 Pillars Reply: Dave Ramsey

2008-03-08T23:15:00.003-07:00

Quest for 4 Pillars, just put up an interesting post about Dave Ramsey Methods.

The main points are simple

Make a commitment to get out of debt
Start a cash emergency fund
Pay off debt using a debt snowball
Save 3-6 months of expenses in savings
Save 15% of household income into retirement savings accounts
College funding for children
Pay down mortgage quickly
Build wealth and give

And the conclusion from a Financial blogger's perspective is equally simple:
...these things that I do go against the “Ramsey” way but that’s ok because I’m not in need of any kind of financial rescue...I believe that for a lot of people, Ramsey’s methods can be very beneficial.

But I personally think that we're missing something really big here: Dave Ramsey is pimping a diet change and not a lifestyle change. This thing reads like a draconian weight loss plan and asks you to do things based on what he believes. He's imposing his lifestyle beliefs and telling people to save vast sums of money b/c that's what they should do.

Really, why should you save 15% into retirement savings (#5)? What if you don't plan to retire? What if you want to take mini-retirements? What if you want to invest that 15% into educating yourself? If you don't have a college degree, shouldn't that be a priority before retirement savings, how about before saving for your kids' education (#6)?

Paying down your mortgage quickly (#7) could turn out to be a horrible decision. What if you live in a mining town or a factory town? Throwing money at your home could leave you light on cash and investment money when the plant closes down and crisis hits.

Making a commitment to get out of debt (#1), is like making a commitment to losing weight without making a commitment to keep it off. The commitment here to live within your means.

This sounds like the "Wealthy Barber" plan of "Save lots of money so you won't be poor." The only two novel concepts here are #3 and #8. Giving, addresses the karmic nature of money which seems to be that those who give don't have trouble finding. And the debt snowball addresses the psychological aspects of debt payoff that some number-crunchers seem to forget.

But really, this is all just a diet plan for debtors. I know several people in debt and I wouldn't package up this advice with my name on it.

Of course, YMMV.

Java dying?

2008-02-22T10:37:00.003-07:00

Interesting link from InfoWorld, worth at least a brief read.
Java increasingly threatened by new app dev frameworks

I can't really disagree with his supposition and he pulls a lot of numbers to support his case. But from a high-level view, what the heck is happening?

I remember 1998, when Java was still a fledgling "web" language. I was around in 2000 when I became the last class at my University to use C++ for first year courses. And here we are in 2008 talking about the "death of Java" and comparing it COBOL. The article explains that Java is effectively being supplanted by .NET, Ruby on Rails and PHP, but I don't think that it's capturing why?

Here's my theory: languages are alive but Java hasn't really fought to survive. Microsoft's .Net is a comparable technology, but the last few years have seen several innovations from MS: WCF, WPF, LINQ (and and everything underneath it), MVC (i.e.: struts) and all kinds of other things that seem to be just around the corner. Even VS 2008 doesn't feel done. Most people are barely rolling out .Net 3.0 and MS is already pushing around 3.5 and elements of future versions.

But Java just doesn't have that developer backing. Sure IBM evangelizes the stuff and educational institutions like to use anything they can find for free, but it's still "behind the curve". Eclipse is definitely becoming competitive, but I just don't see the whole framework of tools/language/support being pushed as hard or as fast by IBM/Sun as MS is doing with their tools.

Of course, we'll see how PHP and Ruby (the apparent heirs) actually perform over the coming years. All of the arguments I've heard for/against the technologies seem mostly ideological. People don't like tools that make them uncomfortable.

But at some point the language becomes just as relevant as the tools around that language. And I'm not convinced that Java is really dead, so much as Java needs a better toolset.

Of course, YMMV

News? Bad requirements-gathering hurts IT projects

2008-02-12T09:44:00.000-07:00

Study: Bad requirements-gathering hurts IT projects

Obviously nobody is surprised by the results... actually, I lie, I am surprised by the results.

The number of failures is huge. They provide some ideas, but I have two pretty solid explanations myself.
1. IT is voodoo magic
2. People still don't know what they want so projects become too big.

The second one is quite self-explanatory, but still widely misunderstood. Undertakings of more than 2000 man hours (that's 3 people for 4 months) are never as simple as we'd like to believe. They're also too big for most software.

Software is organic, it needs growth time. It's also really easy to spend way too much time on software. The big industry fallacy is that good software can be developed over several months (or sometimes years) and then just magically work at the end of the day.

It can't but very few people in power understand this. Until we start "growing" software with smaller deliverables (call it Agile or Iterative if you want), but until it's "organic", then our software is going to suck. Until we recognize the organic limitations, we're going to keep budgeting software projects like we would a bridge and this too is going to fail spectacularly.

Of course, YMMV.

A Slashdot reply: Young IT Workers Disillusioned, Hard to Retain

2008-01-13T20:37:00.000-07:00

So off the Slashdot wire, via Network World comes: Young IT Workers Disillusioned, Hard to Retain

The lead-in quote: Young IT employees pose a challenge to many managers who say the Millennial generation holds employers up to unrealistic expectations and makes unreasonable demands for their services.

*Sigh*

It's a good read, it's nice to hear one side reported; but I feel there's a whole other side to this that's not understood. Most "millenials" that I've met have very little concept of business and business finances.

The average worker expects to sit around and do as they are told and basically "be taken care of". The average worker never sits down with their boss and says "I'm making X and I want to be worth X+10%, what do I need to do?". There's an expectation that simply showing up will get you there. Most workers I've met simply let the company decide their next step. I've even met tons of smart and skilled developers who simply don't know the math behind their salary. They can't ask for a pay raise or different benefits or some other employer concession, they don't even know how much they're worth. They don't know what income they generated last year or the typical overhead cost on their time.

Meanwhile, from the other side, most companies I've known are simply terrible at managing workers and projects and growing their #1 assets. They set up win/lose pay structures that heavily reward management instead of the workers. They ask for more work hours instead of more project deliverables. They expect employees to train outside of work instead of accounting for the cost of "in-the-week" training time. They ignore the concept of "apprenticeships" and the time required and just add juniors to the team as a single unit of time (instead of the .2 units of time they actually generate). They fail to build progression plans (including scheduled pay increases for young workers) and then wonder why they get caught with their pants down when the best young workers leave for more money and the bad ones hang around.

It's a two-way street and there are ample examples of failure on both sides. There are tons of "sweatshop" workplaces and tons of workplace Princesses.

Of course, YMMV.

The annual Gift Card debate

2007-12-11T18:55:00.000-07:00

So the war is now raging, Violent Acres has weighed in:
Fuck the Cheerleader; Buy a Gift Card, Save the World - Violent Acres

And so has Liz Pulliam Weston, already the reason I don't read MSN money, she now claims to know that Gifts cards are not gifts. Now I don't think she's totally off-base, here's a great quote:
A gift, ideally, says, "I thought about you. I considered your likes and dislikes, your needs and wants, your dreams and desires, and found you this token of my esteem that I hope will delight you."

But she really takes the whole thing one too far with some other notable quotes:

Would a lover, in the flush of romance, lean close to the object of his affection and present . . . a gift card?...

Heaven forbid that givers use their own judgment and spend a little time picking out small items that might give the recipients pleasure. Just give us the cash and get out of the way.

Followed-up by some interesting advice:
1. Make certain events off limits.
2. Combine a card with a real gift.
3. Think twice before giving one to someone you love.
4. Don't add to the recipient's burdens.

V of course has some strong views the other way:
Every year for my birthday, I always get a gift or two in the mail from someone I haven’t spoken to in months. I find it incredibly insulting. All year long, these people couldn’t be bothered to call me on the telephone, shoot me an email, or meet me for dinner. Yet, they feel as long as they mail me a fucking candle on my birthday, our friendship status will remain.
...
And yes, I’m giving out gift cards this holiday season. Merely because I know most people aren’t yet at a place in their life where they can look into a box and simply say, “This is just an object. It doesn’t mean anything.”

Idea #4 is actually pretty key to giving a gift card, giving a $50 gift card to Banana Republic is like saying: here have a pair of expensive socks. But it's really no better or worse than just buying a bad pair of socks from BR and giving them as a gift.

Idea #1 is tainted by the adding that weddings should always receive gifts, which is exactly the opposite of what couples want. Most modern couples are paying for their own weddings and they're already living together long before they wed. So why do they need another toaster? Weddings are expensive gatherings, so basically every couple that I've known that married in the last 5 years (and that's like 10 of them) would have preferred cash or a good gift card over anything else.

Heck the fiancé and I were saving up about 10k to pay for our wedding expenses, the best gift (other than something hand-made and personal) would've been straight cash to help pay for the catering and the rental. Of course, this isn't true for everyone, some couples really are moving out right after marriage and for these guys, I'll buy a gift off the registry.

As to the rest of the advice and the raging debates, I figure that Liz has some useful advice it's just mixed in with being a little extreme. V of course, is practical as always (if a little evil), but doesn't always think highly of people.

I'll draw a line in the middle and say that gift cards are a fine gift as long as they're as thoughtful as the gift you would've purchased. Buying a GC is like buying a night out for friends or buying a week of morning Starbucks or a freebie nail job or a couple of reams of fabric for your next quilt. Buying a $50 GC to a $50 / plate restaurant is just as bad as buying diamond studded earrings for a girl who doesn't have pierced ears or giving a crisp, red $50 to your independently wealthy friend.

The nature of the GC is not inherently that it's a bad gift, it's that it's gift that requires thought just as much as any other gift. Bad gifts are bad gifts, cash, cash-equivalent or wrapped in a big box. So just buy gifts that are appreciated (and take the time to wrap them, it shows that you care)

Of course, YMMV

Bill Gates on Innovation

2007-12-10T10:21:00.000-07:00

So a few days back, I wrote a post attacking a piece that talked about stifled innovation.

And I stood up and defended a lot of MS work. Well, lo and behold, here's Mr. Gates himself singing some of the same tunes: Bill Gates on Innovation | WebProNews (Printable Version):

Anyway, tablet computers, is there somebody else out there doing tablet computers? IPTV, is there somebody else out there doing — by definition what we do is the baseline. Everything Microsoft does is the baseline, and what we don’t do, that’s what’s innovative I guess. (Laughter.) And by that definition the other guys do all the innovative things.

It's obviously a slightly different take, but he's really got his finger on something: MS generally doesn't get credit when it does new stuff. So for the most part we look at MS and just see all of the common, everyday old crufty stuff that we figure is there.

Look, I'm not a Vista nut, but I also haven't counted MS out of the software world.