Where Does Trust Fall in the Four Ps of Marketing?

Protesters raise their open palms showing the word "No" during an anti-bailout rally in Nicosia

I’ve finally dribbled through “Buffet: The Marketing of an American Capitalist”, and ironically, the most thought-altering thing I’ve learned has not been directly about investing. It was the  value proposition in trust.

Warren Buffet made a mistake investing in a well known firm, Salomon Partners. The firm had had a great run, becoming the one of the exclusive Treasury trading partners and competing with the likes of Meryl Lynch, when one bad apple spoiled the barrel. The trader in charge of bidding on Treasury bonds successfully cornered the market by making illegal bids, some in the names of Salomon’s customers. John Gutfriend, the much feared CEO at the time, had neglected to disclose the illegal activity to the Fed.

he-worked-his-way-up-and-was-made-a-partner-at-salomon-brothers-in-1972Once discovered, the case blew up, and as trust in Salomon disappeared down a sink hole, and customers dried up. Investment banking is an industry built almost entirely in trust. Companies trusted Salomon to pull together investors and provide capital. Clients trusted Salomon to obtain the securities they desired at the best price. Salomon would have gone under right away if Warren Buffet hadn’t stepped in to infuse the firm with what it had lost: Trust.

Trust is stronger than faith: It’s built from experience. Trust is knowing your doubles partner will hit that perfect serve in the lefthand corner every time. Trust is knowing the phonecall to your mom or dad will always reveal the answer. Trust is opening the fridge knowing your roommate didn’t finish off your beer. Trust in China is knowing those Korean noodles are clean and safe to eat. Trust is that brilliant coworker that always solves the problem.

hypocrisy-superman-dupont-reducedA brand is an insurance seal on your favorite product, the Brooks Brother’s shirts that don’t shrink, the bottle of Tide that never fades your sundresses, the Teflon coated pans that eggs fall smoothly off of. In the Four Ps of marketing, branding falls both in product and promotion. Tony the Tiger promised the same sugary goodness every morning, in the same way Batman promised the same daring rescue at the end of each 30 minutes – with commercials – program.

bank-run

Building trust for a brand means can mean providing awesome customer service, every time, like Zappos. It can be a slow process, taking years like the bakery next door. Trust can come from a base of brand advocates, as Salesforce used at nationwide conferences. You can build off trust in another brand, as Facebook built its user base off college brands. A brand can also be inextricably tied to a trust in a single person, as Apple was with Jobs or Berkshire is with Buffet.

For social media, your followers trust your personal brand to deliver similar content, in a consistent voice. It’s said to gain followers 90% of your tweets should not defer from your “brand”. Different networks offer consistent types of content: Pinterest has beautiful travel photos and recipes; Instagram offers angles on views you missed and styles that will make you cooler; Spotify always has different bands and playlists with artists you forgot about. Even Google Plus has found a following with gamers and other subsets that want to talk all day, every day about some obscure topic.

So what’s the value of trust? Procter and Gamble once calculated a lifelong Kleenex customer as being worth $600. Today P&G deals with Tide thieves who retail stolen bottles for half the price, so coveted is the brand that promises to make Kmart jumpers smell as special as Crewcuts. Trust lost can destroy a politician’s career, a marriage, a brokerage firm, an imported brand, a livestock industry.

rfd-tide-sfSpan

Maybe the true value of trust can be measured in time: the seconds, minutes, hours, days, years, decades you spent experiencing the same mouthfuls of frosted flakes, loads of laundry, fried eggs, crisp shirts and restful nights knowing your money was safe in the bank.

Exporting Technology from China: Is It Legal?

Just when China is starting to look promises for foreign companies looking for a higher educated workforce, they go and change their patent laws. As of a few weeks ago, Beijing has decided to issue “compulsory” licenses to domestic companies looking to manufacture patented drugs in China. The changes are said to be “for public health” and is allowed under the WTO for nations where expensive drugs are unaffordable. With a burgeoning middle class, China clearly intends the generic drug licenses for export markets.

China’s MNC licensing and operating regulations aim to keep the export-to-import ratio high, block foreigners from marketing competing products in China, and develop the Chinese economy into a global competitor. Although Chinese IP laws have become increasingly reliable with a few major cases such as the WTO U.S. versus China win on movie licenses, the tech industry continues to struggle. Apple is facing a lawsuit over its iPad trademark while Chinese phone manufacturers are warned of impending suits thanks to their rapidly expanding Andriod export market.

合作项目: Right to Produce

A common model for foreign companies has been a 合作项目, hezuo xiangmu, sharing-the-work mutually: “是指专利权人将其所拥有的专利技术许可他人实施的行为”; “The law allows says the licensor allows the licensee to exploit the patent”, exploit meaning implement or carryout the patent. These are often manufacturing agreements and the foreign company retains protection for its patents. These type of relationships are tricky because the intellectual property transferred has been very difficult to protect, and Chinese courts historically sided with domestic companies in order to facilitate domestic development.

WOFE: Right to a Factory

In order to protect technology, beginning in the eighties some companies chose to set up WOFEs, wholly owned foreign enterprises, located in SPZs, special economic zones. SPZs can offer lower taxes and local government investment in infrastructure. WOFEs can only take advantage of Chinese labor for manufacturing and are not allowed to sell their products in the Chinese market. Protecting intellectual property is easier in a WOFE, because not only is there complete sharing of patented technology with a Chinese firm, but the MNC can keep tabs on exactly who else may have access to technology, such as suppliers and temporary workers.

合资企业: Right to Sell

When looking to sell products domestically, foreign companies found the easiest entry was through 合资企业, “hezi qiye”, joint ventures or “mutual earnings enterprises”. Most original ventures were with a 国有企业, guoyou qiye, state-owned enterprise. In a Communist country, all companies were state-owned. In modern times privately owned Chinese companies not only exist, but are doing extremely well. Joint ventures with any Chinese companies usually allow 51%+ ownership by the foreign firm, and contracts may stipulate the foreign enterprise is allowed managerial control.

As the Chinese name implies, 合资企业 financial gains are shared based on the percent ownership, but what about the intellectual gains from products developed in China? In a joint venture, the enterprise which is established is a new company. Board members represent both the Chinese and the foreign company. Intellectual property developed by the enterprise belong to the newly created Chinese-based company, and joint venture contracts with the companies may span decades, effectively tying the foreign company to the Chinese firm.

Conversely, in recent years foreign companies are feeling less attractive to Chinese entities, and more of a short-term partner. The change is coming as China comes into itself and has begun to think of itself as a global competitor. The joint ventures which once helped Chinese the government through 国有企业 share profits from foreign businesses operating in China, now are consider a training process for Chinese companies looking to acquire technology and go global. Companies entering these type of relationships first should register IP with Beijing.

R&D: Right to Innovate

In order to win over the Chinese government, many MNCs have created R&D centers in China. L’Oreal, Seimens and Merck are a few. The Chinese government often builds R&D centers with the latest infrastructure, design and telecommunications systems to cater to foreign MNCs. The trade-off is giving the foreign MNC access to domestic markets while giving educated Chinese workers experience in high technology and science industries.

Right to Remunerations?

What began as a show of good will, has turned into a battle for rights to the innovations coming out of developed R&D centers. According to article 20 of Chinese patent law, a Chinese entity or individual looking to file a patent abroad must first file in China. China’s patent laws are a first-come-first-serve basis and do not require proof of invention. Although an R&D center may be a WOFE, as long as it is on PRC soil, it is subject to the PRC’s patent law.

The Chinese government assumes a right of the Chinese entity to any improvements made, meaning any contractual or joint-work done in China allows the Chinese counterpart to claim IP rights, equity, profit-sharing or some other ownership of any invention done by them. This rule even applies to Chinese citizens employed by a foreign firm!

In order to file for a patent abroad, the foreign firm must then go through the Chinese patenting procedure. The process begins with finding a Chinese patent agent to represent you, then obtaining the right to file a patent claim. According to article 10: An assignment, by a Chinese entity or individual, of the patent application right, or of the patent right, to a foreigner must be approved by the competent authorities designated by the State Council. This process can test a company’s guanxi, or political connections, and may subject it to bribery requests.

Once patent filings are made, the Chinese patent bureau will investigate the claim in a similar way as the U.S. government does – however the patent will be liable to Chinese export-import laws which regulate technology and industries considered advantageous or unique to China. The laws also take into account technology such as computer security, which may be considered a domestic threat if exported to foreign countries.

If the patent is approved, the Chinese employees working on the development may still claim royalities or payouts for their work. MNCs employing Chinese workers need to stipulate in contracts that the rights to patent filings and any work done under their employment belongs to the foreign MNC’s parent company. A compromise may be joint patent ownership in China and full ownership abroad.

From the Madtown: I Stand With Walker

Tonight Scott Walker is the winner of a state he already won the right to run. They are saying its a test for the country, the “stirring of something on a domestic level” and a warning for Obama. While the pundits speculate about the 62 million, (by some estimates 34 million Republican, 4 million Democrat, the rest special interests), which lambbasted the state the last months, I can’t help but wonder: Have any of these people ever been to Wisconsin?

Do they know it’s mostly Catholic and Lutheran, and yet prochoice? Do they understand the thick accent derived from German and Scandanavian settlers which still influences the socialist ideals? Do they know it’s one of the most literate states in the country? Or the fattest? Do they know that La Crosse is a place, not a sport, and jorts never went out of style..the rest of the country merely came back in? Do they understand, to a Wisconsin voter, politics are the most fun since football season is over?

Last fall as the nation turned its attention on my hometown, I hoped they would see what I saw: The liberal, diverse, highly educated (most PhDs per capita), Best City to Live In several years running capital city. Madison’s economy is a town similar to my new home, Washingon, D.C. It runs on the government, a handful of insurance companies and the internet and tech fueled startups like ShopBop and Epic, which employ the bright, hard-working and conscientious graduates the UW turns out every year.

It’s a smart city. Which is why I was shocked in horror to watch last fall as a bunch of out-of-towners drove tractors around the capital, and my little brother and sister’s high school classes poured into the Rotunda to cheer in red and white sweatshirts along side my former classmates. But then that’s Wisconsin. We’re the only state that owns our own football team: This is not a sit back and watch the t.v. ads kind of voter.

Is this a state which reflects the country? I’d like to think this country’s population is half as passionate, as well-informed and half as loyal as the average Wisconsinite. This is a state of people who will paint their faces blue or red or green, (my Catholic gradeschool voted for Ralph Nader one year), but never gets drunk on anything except beer. Political affiliations are an identity, and supporting some cause, any cause, is a favorite past-time in a state with 3 seasons of winter, but every mind is always independent.

If you ask an 18 year old Wisconsinite why they voted for Walker, or against, beyond the tears and jeers, you will hear a logic as crisp and as clean as the air on a January morning in Eau Claire, (where Obama once said he’d create green jobs). In the satirical outfits worn by college students and postgrads, (some of them my friends – see Where’s Waldo), you’ll find ideological statements that hit too close to reality. No, there was no way Democrats could outspend Republicans in Wisconsin.

In this heated liberal seat like Madison, my mother said it was bad enough you couldn’t put a Walker sign on your front lawn for fear of retaliation. The teachers had taken the fight into the classrooms, (National Honors schools, some of the best public schools in the country). And yet, when you drove into the cornfields just beyond the Beltline, spreading between Madison and Milwaukee, and down to Janesville where the oldest GM plant still operates, there were the “I’m with Walker signs”.

There on the front lawns in an America as idealistic as a BP commercial, Wisconsin voters were loyal to their governor. Just like they were loyal to Tommy Thompson, Republican, and in Tammy Baldwin, Democrat and openly gay, and to Paul Ryan, Republican and antiwar. Because the funny thing about a state that tried to recall their governor, they’re a pretty loyal bunch.

Scott Walker did what he believed was best for the people of Wisconsin. He balanced the budget, decreased unemployment, and protected the majority of the state in a time of economic uncertainty. He didn’t win on womens rights, or social issues, or individual privacy, or gun rights, or domestic security, or foreign policy, or social welfare programs. He didn’t win as a Republican governor; He won as the governor of Wisconsin.

Obama and that rich guy Mitt Romney? That’s a whole other game.

From my Facebook

Tom –
A victory for taxpayers across Wisconsin and America! Thanks to all the volunteers who helped make this historic victory possible!

Amanda –
Guess I won’t be taking my teaching career back to Wisco for a while…

Michael – shared a link.
Misinformed USA: Why average Americans vote for Republicans

Christopher –
Yet another day in Wisconsin history that makes me so happy I no longer live there.

Sarah –
Yay! Proud to be a Wisconsinite!

Rachael –
today was a good day because i got my first hire, pretty little liars returned, and i realized how smart my decision was to move to chicago. =)

Newman –
Its times like these I just retreat more into myself.

Kristin V. –
Learned 2 “important” things today: 1. The Turtle Lake mascot is not a turtle but rather a “Laker” and is a picture of an anchor (very disappointing). 2. it is legal to throw anything out your window in this part of the state.

Kyle –
I’m moving to the moon.

Annie –
Wisconsin will live to fight another day. Tomorrow is my last day before finals with the freshmen. Even if my state doesn’t respect what I do, my students have.

Kristen E. –
miller park with my favs!!

My favorite:

Mona –
BREAKING: Madison, Wisconsin Voter Turnout Over 100% http://t.co/XrJ2Silh

Ellen Pao: Fifth Generation Feminism in Silcon Valley?

This morning the Twitter story of the day screamed at me “Men invented the internet“. “Ellen Pao, a junior partner in her early 40s at the distinguished venture capital firm of Kleiner Perkins Caufield & Byers, filed a sexual discrimination lawsuit against the company and her colleagues there.” Her claims in the wake of Facebook’s board “diversity” scandal, sound all too familiar: The frathouse behavior, the silent passing over for promotions, the “quiet” acceptance of male dominance in leadership roles. Her accusation a partner retaliated against an office fling gone sour could be straight out of “The Social Network”. Is there no fury like a Silicon Valley tech nerd rejected?

No. There isn’t. I say it from experience, from the women I’ve known who think coke-bottle glasses are cute, and attend Girls in Tech events, and the coders, and designers, and social media geeks who pepper the dark corners of the internet with their unfulfilled fantasies. While chasing their interests they’ve inadvertently struck gold. The tech community is an incredibly self-assured, physically insecure and competitive subculture. The competition to be known, to make it big and to bring in the dollars, is a brilliant light show streaming from the tiny liquid crystals we are composed of. Competition is coded into their DNA.

In biology there is only one kind of competition: Gaining the most resources to have the most successful offspring.

According to Pao’s accusations, the men at Kleiner justified keeping women in the lower level roles and salaries. They said women would not succeed because they were “too quiet”. One partner told Pao women were not invited to dinner deals because they would “kill the buzz”.

Competitive instinct is part of a new thought school both sides of the feminist debate are trying to understand: How do the biological differences between men and women affect the way they behave in the business world? Ellen Pao was a venture capitalist. Interestingly, finance is analyzed most often because it is one of the most lucrative career paths, and if success can be measured by accumulation of resources, a money career definitely trumps them all. It is also a male dominated field.

One study was investigating testosterone levels of women in finance. Another study had shown men tended to make riskier decisions, and earn the top most and bottom majority of ROI in their portfolios, while women made “safer” decisions and the middle to upper-middle in ROI. The scientists wanted to know if women with higher testosterone levels engaged in riskier or more competitive behavior than women with lower levels: The answer was yes, the more testosterone, the riskier the behavior within a gender.

So where does that leave us? Is it fair that men can be expected to be more competitive? Can women compete with them while they are competing for women? Should we start testing testosterone levels instead of personality tests?

There have been five eras to feminism:

1. Getting the vote
2. Entering the workforce
3. Demanding equal pay
4. Wanting to be “one of the boys”
5. Gaining maternity leave and the acknowledgment women are different, but equally capable.

In fourth-generation feminism we’re taught it’s better not to complain. Stories like Pao’s raise the hair on our backs, but are dismissed just as quickly. Sandy Kurtzig, an entrepreneur funded by Kleiner Perkins, would be a fourth-generation feminist. She is quoted: “I always thought the world was going to be gender-blind.”

I was raised by a fourth-generation feminist, in a slightly socialist city which caters to smart girls with athletic abilities. In the 1960s my mother had been given a common test to determine how “masculine” or “feminine” she was. She was an only child who liked trucks, sports and rough-housing with a family of five boys. The test makers told her she “thought like a boy”. Thirty years later in shoulder pads and Chanel, she was still playing with boys, while I was growing up with Barbies and not knowing the difference.

When I left for a university which was 70% women, in the business school, I never knew why my friends complained about the gender ratio. All my classes were filled with tall, masculine bros. In business school, they taught us a survival of the fittest theory which states all discrimination is ultimately bad for financial success because it illogically excludes a potentially better fitted talent pool from competition. Rather than teach business students it’s morally wrong to discriminate, the idea appeals to our pocket books: Why exclude a bunch a intelligent workers who can make you more money?

No transition in thought is ever complete, and fourth and fifth generation feminism run parallel in society still. I’ve seen the divide in academia and the transition to the career world, where fem lit majors choose to put on skits from the Vagina Monologues, and business majors put on closed-toed heels to give presentations on Michael Dell and Steve Jobs besides their 6 ft. tall team mates. A “blind” fourth-generation feminist can walk confidently into a PR firm or Wall Street after graduation, but as soon as she’s found herself in a cubicle farm of pearls or briefcases, the gender lines become clearer. A career choice that was based on personal interests or financial ambition begins to elicit a subconscious nagging question: Was this my choice or society’s?

How to Time Travel on Web: 2 Research Tips

A lot of what I’ve done at various jobs involves research, and most research today is done through the web. In science and business, knowing where you have been is critical for knowing where you are going. Scientists read hundreds of “old” papers to find methods and discoveries they can use to plan their own experiment. These papers in a way are “case studies”. Business analysts use financial, distribution, product cycle, interest rates and loads of other data when looking at company, making a deal or solving a problem.

Social media analysts use some old data to create new business proposals, but mostly they want “new” data: the latest information and technologies available. On occasion however, to illustrate the evolution of the web, I’ve used this amazing tool, “The Way Back Machine“, which allows you to see archived snapshots of your website. This is a picture from the front page of my blog, a year ago:

Try it yourself!

The second tip I’m proffering up is a simple variation on a Google Search. I choose daily topics for my community’s Twitter handle. Today’s topic was “Chimeras”, as from the recently created chimeric monkeys. (Chimeras are organisms with multiple genomes, different DNA.)

The search was unfruitful thanks to Google’s recent algorithm changes which give greater weight to newer content. (A reason one should blog on one’s company website, and often.) The results I was receiving were for the monkeys or a successful hockey game from yesterday. Search for chimeric:

Search for chimera:

In order to eliminate the cute little baby Rhesus monkeys, I used Google’s time period search. I started in 2000 because information in in DNA research over ten years old doesn’t have much significance with modern discoveries and changing technology. I picked a month ago as the end date, although even last week would have been far enough to clear the viral monkey story.

The results were exactly what I was hoping for, no more big black monkey baby eyes looked back at me imploring the necessity of a future of hybrid creatures. Now I could browse articles which topped the news in another time, a simpler time, like January 2011.

And this is how I stumbled upon….HUMAN CHIMERAS!!!

What are you researching? What you like to discover? Happy hunting!

Second Financial Crisis Coming

From what I understand, the mortgage crisis was brought on by the falling prices of real estate, with homeowners who had homes more than they could afford being unable to refinance as the value of their homes dropped. Something is fishy about this I don’t understand: Why were suddenly so many homeowners not able to pay? I understand that it was building up bad mortgages, but I can’t help but think in 2005-6 something must have been slowing in the economy for so many homeowners to all be behind in 2007…

So here we are, in the second dip of the Recession, arguing whether balancing the budget will get us out or if overspending, as the government did after the Great Depression will help. Currently the US government is backing Freddie Mac and Freddie Mae, which means they are responsible for about half the mortgages in the U.S. If unemployment continues to skyrocket, and the housing market continues to tank, the government may have to bail out even more mortgages. Thanks to a dwindling taxable population, “Obamacare”, the continued “wars” and democrat spending, we’re looking at an increasing deficit.

Interesting, banks and the Fed have had exactly opposite reactions to the economic crisis. While banks are looking to deleverage, (one friend told me small banks were at 40x debt to equity before), the Fed has been leveraging up, loaning and purchasing $7.8 trillion over two years. All while keeping interest rates, the amount banks pay to borrow, at nearly 0%. This was down to stall deflation after the market crashed by pumping money into the market, thinking this would spur growth. Except it hasn’t.

There’s four big problems right now:

1. Small businesses are struggling
2. Investors are moving money overseas
3. The Fed’s money policy has us set up for inflation
4. We’re not making things

First thing to remember about small businesses is they grow into large businesses. Without entrepreneurs we have little innovation in industries. According to the small businesses association, they generated 65% of new jobs over the last 17 years and employ half the private sector workforce. They generate 13 to 1 more patents per employee. The account for 97% of all exports. Now, small businesses are having a harder time borrowing money from banks and investors are more wary. Obamacare has added burden on small businesses with the health care bill. If we’re looking to reduce unemployment, look at Main Street.

Goldman Sachs is predicting up to 14% growth in non-Japan Asia. Why non-Japan? As an industrialized nation Japan has already seen its biggest spur in growth, so when investors are looking to high returns they’re going to look at economies which still have a long way to go. Although many say China is currently “overleveraged” and admits to stalling out because of reduced exports to bankrupt Western nations, they will still see about 7% growth rate. Four reasons for that: 1. As our WalMart nation goes further in the red we’re relying more on cheap Chinese goods, 2. They are not dumb enough to float their currency and will continue to subsidize businesses 3. They have a had a higher savings rate so consumers still have money to spend 4. They are a developing country and so have farther to climb. Other countries to look at include developing Southeast Asia, South Korea and wait for it…Mongolia, whose gold mines are riding the gold boom.

As said before, the Fed has been pumping money into the economy to increase growth, but there has been no increase in growth. Add a 33.8% increase in fuel import costs in the last year and you have inflation. After WWII, the government was in a similar position, highly leveraged and set up for inflation. At this point we were going from an industrialized nation to a manufacturing nation. Most of the government’s money had been put in things like new technologies and infrastructure – roads to move military goods which would soon serve to move consumer goods faster than trains and cheaper than planes. Our only hope for avoiding inflation as in the 1950s would be major economic growth so the rising cost of goods was offset by increases in productivity and new products.

That’s not happening because we aren’t innovating fast enough. From Obama who has no idea how to run the economy to Bloomberg who kicked the Occupiers out, politicians are finally getting we have a problem with the innate value of the economy. Obama’s Presidential Address was littered with references to South Korea and their impressive focus on infrastructure and technology, including putting high-speed internet into every home in the country. Bloomberg recently visiting Hong Kong made a speech “Stop Blaming China” calling out Congress for focusing on a “trade war” with China and trying to label their clean energy as noncompetitive. His argument was why would we want to attack a country for creating cheaper ways to green energy, innovations that would benefit every nation, especially our own? Instead the U.S. needs to focus on what it is we’re going to offer the world in return.

What China Thinks You’re Worth

This post obviously deviates from my previous posts on digital strategy, but I feel it justifies the overall theme: Marketing in a global economy. It’s also been burning on my mind for a couple weeks…

How to Speak French in China

The picture in my blog banner was taken in Carrefour on a Sunday. Carrefour is a French grocery store which became successful in China. When I first went to Carrefour in 2006, it was the best place to get imported brands, a little higher priced and moderately patroned by Chinese. In 2008 when that picture was taken, Carrefour had dramatically reorganized the store to cater better to Chinese tastes. They had gone from a Whole Foods style store to a SuperFresh.

It was still a little above the normal Chinese grocer, but focusing on fresher produce, an impressive fish market and household staples. The bakery was more “Chinese”, and catered to bulk buying of mooncakes and local candies for holidays. There were more discount signs and the ads were of happy Chinese couples. The foreign goods were pushed into a smaller section and the previous space was stocked with wine. The beauty selection was extensive, and staffed with saleswomen as in a department store. And as in the picture, the store was packed. Clearly Carrefour had figured out what was “foreign” was valued at in Chinese.

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Your Value in RMB

In international finance we briefly covered a concept called derivatives (my professor’s pet fave). Derivatives in calculus are horrible equations talking about the growth rates of growth rates. Abstract math ideas have always bugged me so I cringed hearing of financial derivatives. In finance however, they are any financial asset whose value is derived from a real asset. Mortgages are a type of derivative, and as we saw in the crisis, there can be derivatives of derivatives, which get riskier and riskier as you move away from the real asset.

In a way the economy is a derivative. There is no direct asset underlying the U.S. economy as the government stands to borrow on it or as currency exchange rates tend to fluctuate on it. The dollar is no longer backed by gold, and the government doesn’t own enough assets in land or patents to back itself up. The asset is the American people, and the promise of us continuing to innovate and pay more in taxes over forever. So how do we crawl out of this recession and become an asset worthy of the American dollar?

I chose to make references to Asia because I know Asia. I’m also a firm believer they have the right focuses: Education, self-interest, hardwork, saving, innovation. Many would agree those focuses created the strong middle class in America from the 1940s to 1960s. South Korea in the 1990s was just beginning to emerge on the world market. Their focuses were on education, hardwork, South Koreans and frugality. Samsung up until that point had been “ripping off” American innovations in technology, making the same goods cheaper and somewhat shotier.

Samsung had a great CEO at the time. He was what Jim Collins would call a “level 5 leader”. He was sick of shotty goods and copycatting and knew Samsung would never grow to compete globally without innovating. So he called together his top people and all the workers of a manufacturing plant and had them pile Samsung electronics into the middle of a field. Then he set them on fire. From that day forward he said, Samsung was going to be known as innovator, and they were going to create products that hadn’t been done before.

Its far-fetched to say a single change can take place in American culture as happened in that factory which will alter behavior substantially. It would not be a change that happened quickly. It would not be one that would be appealing, as any drastic change involving hardwork isn’t immediately. It is a necessary change though, as Warren Buffet, and Bloomberg and even the Occupiers agree with.

The change has to begin with an admission of guilt: We defaulted on the American Dream, and it’s going to take a long time to earn it back.

Making Money Move

I know/knew a crazy guy who’s story I like to tell. He was 21, and on a date with my best friend of the time, drinking coca cola on the water in Hou Hai, Beijing. “What are you going to do with your life?” says my friend, the actionary, activist, to her globe-trotting, silver spoonfed, soap operaesque paramour. “I’m going to make money move,” he responds.

“You see this coke can?” he says. “Someone had to make this coke can, build the factory, produce the coke, transport it, create the advertising and sell the can to us.” “Ok,” she says, “so you’re going to make that coke can?” “No,” he responds, thrilled with his audience. “You’re going to make the coke?” she says. “No.” “You’re going to sell the can?” “No.” “You’re going to do the advertising?” “No”. “What are you going to do then?!” she says, realizing she’s talking to a nutjob. “All those things need money,” he responds like philosopher. “I’m going to make money move.”

This story I tell again and again, about that crazy a-hole my friends once dated, and how very opposite my “type” he is. But I think it’s time to eat my can. Since Jobs death the Apple ad “here’s to the crazy ones” has been boinging around the internet. (Often by me, I’ve watched it about 100 times.) It’s a very GenX,GenY, rebellious, appealing, au moment concept – let’s be the creative crazies, the Don Drapers of the world. It encompasses the artists, the writers, the social media evangelists, the PR pros and the creative technologists, like Roman Cortes, the one who created the scrolling pure CSS coke can you may click the above image to view.

It’s easy to worship the artists, theologians, philosophers, the Georgia O’Keefes, Ben Franklins and Steve Jobs of the world. We can see what they created, repeat their wisdom to our children, even hold their art in our hands as tools for our own creativity. I’ve made it no secret I worship these American Gods, as well as the armies of developers, coders, entrepreneurs and creatives “building the digital matrix”. Their work is judged by its beauty, visual appeal and “cleanliness”. A line of code, like a geometry proof, is considered “beautiful” if it is simple. This is an easy skill to admire, cleanliness.

The people I’ve neglected to show my admiration for are Untouchables of the artistic world: The business people. My people. They are the stark grey and blue-pinstriped background to an artist’s painting, the cool steel frames holding up a Frank Lloyd Wright, the red electricity shooting through the Matrix. Without them businesses do not grow, offices do not exist, value is not stored in currency, exchange rates do not even out, buildings do not rise, and developers go hungry on ramen.

For Georgia O’Keefe her patron became her husband, Alfred Stieglitz. Apple became Apple, Inc thanks to Angel investor Mike Markkula. And Benji, one of our Founding Fathers himself was a financial guru. Franklin actually left $1000 pounds each to Philadelphia and Boston, with the wisdom of compounded interest.

Franklin was also a champion for paper currency. Money was a hard idea for the colonists to accept. Paper currency had no innate value, unlike gold, silver, or even copper coins. (Anyone in this bad economy who’s had their wiring ripped out by scavengers while on vacation can attest to the value of copper.) Even the first documented currencies, seashells, beads, even salt, held some innate value. Paper, as the Germans found out when their economy crashed, has no innate value, save for the ability to create interesting wall paper. But crazy Franklin saw things differently, and in treatise after treatise, he ushered in the “second era” of paper money, where we moved from colonial checkbooks to cold hard cash.

200 years later, with the extinction of Confederate currency, the Gold standard, the rise Wall Street, the Crash, the runs on the banks, and a new clever phrase no one could ever attribute to this Franklin, “money is the root of all evil”, and Ayn Rand, novelist, creative, artist, echoed crazy Franklin’s idea of money:

“So you think that money is the root of all evil? Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?”

In 1886 John Stith Pemberton a pharmacist from Georgia, worked with druggist Willis Venable to formulate, test, and perfect a beverage to be used in curing what ailed you–and relieving Pemberton of his morphine addiction acquired during the Civil War. Pemberton never created a business from his concoction, but sold the formula to entrepreneur Asa Candler. Candler would become an American tycoon and briefly owner of America’s tallest building from coca-cola. It was Candler who set up the factories to produce the syrup, began the bottling franchise system which puts the burden of selling on the bottlers, and began the marketing department which made Coca-Cola a world wide brand.

If it wasn’t for Candler, the multi-millionaire, dirty businessman, with his aggressive marketing, and inventive distribution system, my friend may never have had her conversation on the banks of Hou Hai, the other side of the world from Venable and Pemberton’s Georgia pharmacies. Candler not only made money move, but the artwork of a coca-cola can.