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Friday, December 05, 2008How Cisco's CEO John Chambers is Turning the Tech Giant Socialist
To the fading strains of U2's "Beautiful Day" -- a projected slide of two executive types sitting lotus style and meditating got a few chuckles -- Chambers bounded to the front of the room. Looking out over the group, he paused before discussing Cisco's business. First, he wanted the analysts to know that, well, he felt their pain. "We went through a life-threatening experience in 2001," he said, referring to the good old days when a market bubble was just a tech-sector problem. "At first, there is disbelief, then understanding ... then how do you position yourself for the future?" Most companies come out of things like this stronger and more flexible, he assured the nervous crowd. "But if there is anything we can do in any way to help, we will be there for you." He waited a beat, took a breath, and moved on. "Now, let's take a step back," he said -- and began talking about just how much stronger and more flexible Cisco is today. Sure, Cisco's stock has gotten hit in recent months along with everyone else's, but the company's underlying business remains robust. Back in 2001, Cisco went from being the most highly valued company in the world to a cautionary example of the excess of bubbles. Today, in the midst of an even wilder economic spiral, the company has a cushion of $26 billion in available cash, two dozen promising products in the pipeline -- each of which is targeting a minimum 40% market share -- plus an unprecedented forward-looking strategy to unleash what it's calling a "human network effect" both on and off the Cisco campus. Cisco is the plumber of the technology world. Roughly three-quarters of its revenue comes from the routers, switches, and advanced network technologies that keep data moving "7/24," in Cisco vernacular. The company's outlook has been buoyed by the hunger for cheap and easy video -- not just from regular folks whiling away the online hours watching cats on a wheel, but from network spending and infrastructure upgrades for companies, a market that's expected to reach $50 billion by 2013. "It was a market transition we saw early," Chambers told me during one of several exclusive conversations in New York and San Jose. And Chambers has greater ambitions, even now, in the midst of turmoil. Or, perhaps, especially now. He has been taking Cisco through a massive, radical, often bumpy reorganization. The goal is to spread the company's leadership and decision making far wider than any big company has attempted before, to working groups that currently involve 500 executives. This move, Chambers says, reflects a new philosophy about how business can best work in a networked world. "In 2001, we were like most high-tech companies, with one or two primary products that were really important to us," he explains. "All decisions came to the top 10 people in the company, and we drove things back down from there." Today, a network of councils and boards empowered to launch new businesses, plus an evolving set of Web 2.0 gizmos -- not to mention a new financial incentive system -- encourage executives to work together like never before. Pull back the tent flaps and Cisco citizens are blogging, vlogging, and virtualizing, using social-networking tools that they've made themselves and that, in many cases, far exceed the capabilities of the commercially available wikis, YouTubes, and Facebooks created by the kids up the road in Palo Alto. The bumpy part -- and the eye-opener -- is that the leaders of business units formerly competing for power and resources now share responsibility for one another's success. What used to be "me" is now "we." The goal is to get more products to market faster, and Chambers crows at the results. "The boards and councils have been able to innovate with tremendous speed. Fifteen minutes and one week to get a [business] plan that used to take six months!" As storm clouds form for the rest of the business community, he says, "We're going to gain market share." Rain? What rain? Continue reading..  
Thursday, December 04, 2008Analyze any new business ideas or opportunities..!!!
1. Is it really any different from what is currently on the marketplace? 2. What wants and needs am I fulfilling? 3. Who will be buying my products or service offering? 4. How strong are my competitors? 5. Is the market for my idea growing or shrinking? 6. Do I have the time and energy to follow through? 7. Who is going to handle what? 8. How much initial capital is required? 9. How am I going to raise extra funding? 10. What is my maximum total loss including money, time and effort? 11. What is the potential for return on my investment? 12. How long is the time frame between initial investment, break even point and getting a return? 13. What is my exit strategy? I believe that one should be very careful about how they invest their money. Very often I see people that invest a huge sum of money when the potential for return is low and the risks are high. In this scenario it is better to leave your money earning interest in the bank. The ideal business idea or opportunity for me, offers a potential for high return, with low initial investment. It focuses on a fast growing marketplace and there is something unique about the proposition. Alternatively another great form of investment is when the potential for return might not be high but the risks are low, little effort is required and the profits are almost guaranteed. I will only usually consider this type of investment if the payback is rapid and the amount of work required is low. Let me give you an example based on personal experience on how not to do it. One of the first businesses I started was a packaging company. The market was served by established players and it was being eroded by cheaper imports. Britain's manufacturing base (my customers) was declining as the UK was slowly turning into a service economy. Margins were tight and my customers were willing to change suppliers at the drop of the hat. Although we did end being successful, the amount of effort and sheer stubbornness required was out of all proportion to the money making potential. This is a classic business idea that should be avoided at all costs! I vowed when I sold this business that next time I was going to get into a fast growing market place where exactly the opposite was true. Your evaluation for investing in an opportunity might be different from mine, based on your propensity to risk. If you have a family to support than this reduces the amount of risk that you can take on. Your age, your sex and business background all greatly influence the types of opportunities that you can examine. Before starting a new business, bear in mind that working as an employee has many advantages to being self employed. Your hours are fixed, the return of investment of time might be less but it is certainly guaranteed, at least for the short to medium term. Starting any new business especially for the first time is risky and demands extraordinary effort before any returns are forth coming. How do you analyze any new business ideas or opportunities? Labels: business idea, Business Lessons, Consulting
Wednesday, December 03, 200810 Investing Books Recommended By Warren Buffet
by Arthur Levitt Levitt, the Securities and Exchange Commission’s longest-serving chairman, supervised stock markets during the late 1990s dot-com boom. As working Americans poured billions into stocks and mutual funds, corporate America devised increasingly opaque strategies for hoarding most of the proceeds. Levitt reveals their tactics in plain language, then spells out how to intelligently invest in mutual funds and the stock market. His advice is aimed squarely at small, individual investors, as he explains how to look for clues of malfeasance in annual reports, understand press releases and draw more from reliable sources. The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by John C. Bogle Filled with in-depth insights and practical advice, The Little Book of Common Sense Investing will show you how to incorporate this proven investment strategy into your portfolio. It will also change the very way you think about investing. Successful investing is not easy. (It requires discipline and patience.) But it is simple. For it’s all about common sense. Speculative Contagion: An Antidote for Speculative Epidemics by Frank Martin Speculative Contagion is an insider’s riveting real-time and real-money account of the inflating Bubble, accented with the genuine suspense to be found only in real-life drama. The epidemic of tech-driven lunacy gradually affected more and more feverish investors all too prone to be infected by the insidious absurdity of the times. In the midst of it all, Frank Martin found sanctuary in the treasure trove of history. Benjamin Graham on Value Investing: Lessons from the Dean of Wall Street by Janet Lowe In this book, Janet Lowe presents a brief but interesting biography of value investor Benjamin Graham. The book also provides a nice overview of the history and theories behind modern value investing. The Theory of Investment Value by John Burr Williams Though the book was first printed in 1938, it is still the most authoritative work on how to value financial assets. As Peter Bernstein has commented: “Williams combined original theoretical concepts with enlightening and entertaining commentary based on his own experiences in the rough-and-tumble world of investment.” Williams’ discovery was to project an estimate that offers intrinsic value and it is called the ‘Dividend Discount Model’ which is still used today by professional investors on the institutional side of markets. Where Are the Customers’ Yachts? or A Good Hard Look at Wall Street by Fred Schwed, Jr Humorous and entertaining, this book exposes the folly and hypocrisy of Wall Street. The title refers to a story about a visitor to New York who admired the yachts of the bankers and brokers. Naively, he asked where all the customers’ yachts were? Of course, none of the customers could afford yachts, even though they dutifully followed the advice of their bankers and brokers. Full of wise contrarian advice and offering a true look at the world of investing, in which brokers get rich while their customers go broke, this book continues to open the eyes of investors to the reality of Wall Street. The Intelligent Investor: A Book of Practical Counsel by Benjamin Graham Since it was first published in 1949, Graham’s investment guide has sold over a million copies and has been praised by such luminaries as Warren E. Buffet as “the best book on investing ever written.” The hallmark of Graham’s philosophy is not profit maximization but loss minimization. In this respect, The Intelligent Investor is a book for true investors, not speculators or day traders. He provides, “in a form suitable for the laymen, guidance in adoption and execution of an investment policy.” Where the speculator follows market trends, the investor uses discipline, research, and his analytical ability to make unpopular but sound investments in bargains relative to current asset value. Paths to wealth through common stocks by Philip Fisher Paths to Wealth through Common Stocks contains one original concept after another, each designed to greatly improve the results of those who self-manage their investments — while helping those who rely on professional investment advice select the right advisor for their needs. In this book Fisher analyzes how worthwhile profits have been and will continue to be made through common stock ownership, and revealing why his method can increase profits while reducing risk. Many of the ideas found here may depart from conventional investment wisdom, but the impressive results produced by these concepts — which are still relevant in today’s market environment — will quickly remind you why Philip Fisher is considered one of the greatest investment minds of our time. Bull: A History of the Boom and Bust by Maggie Mahar Citing studies by esteemed economists John Kenneth Galbraith and Charles Kindleberger, Mahar reminds readers that self-blinding euphoria is a regular feature of every bull market. In vivid detail, she documents the trends and outsized personalities that fueled this particular bull market, including the surge of leveraged buyouts of 1984-1987, the mania for junk bonds, falling short-term interest rates, the rush of individual investors into 401(k) retirement plans, the power (and appetites) of mutual funds and the media frenzy that lent an unlikely allure to quarterly corporate earnings reports. The book serves as a reminder that investors should employ skepticism towards information coming out of corporate management. Security Analysis: Principles and Technique by Ben Graham and Dave Dodd Benjamin Graham’s revolutionary theories have influenced and inspired investors for nearly 70 years. First published in 1934, his Security Analysis is still considered to be the value investing bible for investors of every ilk. Yet, it is the second edition of that book, published in 1940 and long since out of print, that many experts–including Graham protégé Warren Buffet–consider to be the definitive edition. Common Stocks and Uncommon Profits by Philip A. Fisher Regarded as one of the pioneers of modern investment theory, Philip A. Fisher’s investment principles are studied and used by contemporary finance professionals including Warren Buffett. Fisher was the first to consider a stock’s worth in terms of potential growth instead of just price trends and absolute value. His principles espouse identifying long-term growth stocks and their emerging value as opposed to choosing short-term trades for initial profit. First published in 1958, this investment classic is considered a must-read as the foundation for many of today’s popular investment beliefs Labels: Business Lessons
Tuesday, December 02, 2008Learning to Work with Social Networks
While many marketers want to use social networks as part of their strategies, they still have no clear list of best practices for the medium. Getting friends to spread a marketing message to each other is a great goal, but how is that best done? A November article in Ad Age detailed efforts to use the connections between social network users. Paul Moore, director of insights at Yahoo!, found that targeting friends of a given sports fan led to more reach than targeting fans who did not know each other—even if the fan’s friends did not identify an interest in sports themselves. “We got an additional 40% reach from people who would otherwise not be targeted by this ad because their sports-enthusiast behavior wasn’t apparent,” said Dr. Moore in the article. Other approaches included targeting opponents in video games played on social networks. Nearly three-quarters of retail executives surveyed in August by Zoomerang for SLI Systems said they thought social media would have a greater impact on their marketing goals in the near future. But the lack of established social network ad and marketing strategies is, in part, why use of the medium is still relatively low. The fact that it is a new area also helps account for the wide range of marketers’ reported social network usage: 16.9% of US marketers surveyed in May by PROMO magazine said they used social networks in their campaigns, compared with the 62% who said so in a July William Blair study. Labels: social networking sites
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