Money

In previous posts I briefly wrote about money as a tool and happiness as an end goal. I spoke briefly with Alex and Rachel of Community Sourced Capital today about our relationship with money, and how a zero-interest loan to a familiar business helps establish the idea that a monetary investment need not be about generating a monetary return, as long as there is a tangible benefit.

Unfortunately our economic system has become one which is focused on producing the most monetary wealth possible, regardless of the impacts. We use measurements like GDP, GNP, the Dow index, and the national debt to tell us how healthy our economy is, but the problem is that these measure none of the things that really matter to happiness or wellbeing. Just as disturbingly, by focusing on these numbers we start to conflate a means with an end.

If we look at money at a basic level, it is simply a tool for satisfying human needs. On Wall street, CNBC, and in much of pop culture, however, money is seen as an end in and of itself, or as a tool to make more money. The idea is that money will somehow solve all of our problems (personal and national) if we can just get enough of it, and that government's job is to help create as much monetary wealth as possible, and to keep it safe.

The right wing would have us believe that the government is overstepping its bounds insofar as it prevents the rapid accumulation and protection of wealth, and the left argues that we should tax the rich because economics is a zero-sum game. What if we could develop a new (old) attitude that both sides could buy into, in which money is put in its rightful place as not good or evil, but a tool among tools?

Check out this video for a wonderful take on money:

A new way forward?

I would argue that we should begin to measure our country's success in other ways:

-Number of people with meaningful employment
-Crime rates
-Environmental health (air, water, ecology)
-Mental and physical health of the population
-Education levels
-Lack of household debt
-Equality

What if these were our national priorities? I would argue that some of the money that has been tied up for so long in wars, wall street, and company coffers might begin to flow toward meaningful purposes. I even think that many (but not all) of the wealthy might choose to start using their wealth for social good and even allow themselves to be taxed at a higher rate, if it were to satisfy important national priorities.

Is this possible, and what would it take? Are people so tied up in their own self-interest that we cannot get there, or could a concerted effort of propaganda, social networking, and relationship building take us in a new national direction, in which the common good is placed above abstract measures of wealth, without sabotaging individual freedom?

I'd love to hear your take!

To Kill Fast Fashion

The recent garment disaster in Bangladesh has brought to light the plight of garment workers in the way recent school shootings brought gun control to the forefront. Hundreds of people died in the collapse of a clothing factory that provided miserable wages and horrible conditions to workers producing cheap clothing for Walmart, Mango, Joe Fresh, and other major brands.

Something I was thinking about quite a bit before this disaster was the proliferation of "fast fashion" retailers. H&M, Zara, Uniqlo, Old Navy, Target and others design and sell low-cost clothing that is meant to be worn for a season and thrown away (or recycled) shortly thereafter (kind of like Ikea does for furniture). Vast amounts of clothing end up in landfills, having used huge amounts of water to produce. Styles change rapidly to respond to the latest runway trends and keep ahead of consumer tastes, so the quality doesn't really need to be high, since it will be out of fashion within a year. It seems ironic to me that a company like H&M which is devoted to high volume, low-cost fashion would claim to be sustainable.

I believe it is time for a return to high-quality, long-lasting clothing. Not to pat myself on the back too much, but right now I'm wearing a Banana Republic shirt I've owned for 6 years, a 3-year old pair of Sperry Topsiders, a ten year old leather jacket, and a pair of shrink-to-fit Levi's that I only need to wash every couple months, and I think I look pretty sharp! Admittedly, I'm not sure about the conditions in which these were produced, but at least I know I'm not contributing to poor working conditions and water-intensive production methods more often than I need to. I've certainly given into the temptation to binge at Zara, H&M and Target once or twice, only to be disappointed with the quality when the crotch blows out or my tie unravels, whereas when I've chosen to buy a high-end item or two it has generally lasted long enough to get a bit of money at a thrift store a few years later. What's somewhat ironic is that I probably end up spending less money in the long if I choose a few high-quality items that I really like.

Of course, I'm a dude, and I can get away with a small wardrobe (how many girls do you know who wear the same pair of jeans every day for months at a time?) But my point is that we need to apply the "reduce, reuse, recycle" ethos to our clothing, and that might mean paying a bit more for something that was ethically produced and of high quality, and wearing it for longer than a single season.

The big question is, what will it take to take this mainstream? Must we have international regulations on apparel production to kill the fast fashion lifestyle, or can it be consumer-led? I'm not sure, but I'm going to do my best to be conscious about my consumption habits, and the more of us doing this, the bigger impact we can make.

What you can do:
-Buy American when you can afford it (beware of Saipan-produced clothing though)
-Pay more for high quality, well made materials
-Wash clothes less often and hang dry when possible so they last longer
-Limit your purchases to items you'll actually wear, and that might stand a chance of staying in style for more than a month
-Get your clothes tailored or repaired before you give up on them
-Dress up quality staples with unique accessories from a thrift store
-Buy a pair of raw denim jeans and beat them to shit. This is the ultimate in slow fashion. They'll look better than anything off the shelf. Before and after pic of such a pair:

Triumphant return to the blog world

Hi everyone! 

After 8 or so weeks without a post I suppose it's time to catch up! I just spent the weekend at an amazing property in Astoria, Oregon, called Alderbrook Station. The owner, Daren, has been steadily fixing up an old fishermen's boathouse and netshed - where fishing nets were made, repaired, and stored for the vast fishing fleet based at the mouth of the Columbia in the 1800s and early 1900s. It's now a vacation home, event space, and all around great spot to refresh before the last couple weeks of school.

Should money be our priority in business?

Blogging has been hard this quarter because I haven't felt like I had much to say. Or nothing original to say at least, even though I've had plenty on my mind. However, Jill Bamburg's TEDxBGI talk touched on something I've been pondering lately: it's so easy to talk about the triple bottom line (people, planet, profits) and have the best of intentions, only to let profit rule by default. Because it's easy to measure money and, when push comes to shove, money is what so many of us want. In our society it is very easy to be ruled by money, rather than seeing money as a tool for a greater purpose.

Even as a BGI student, I often find myself slipping into that mindset: I need to make money and protect my money for money's sake! Too much time spent in finance and accounting spreadsheets can begin to skew our perception of money and build it up as something more important than it really is. How do we begin to adopt a new way of thinking?

Being honest with ourselves is a good start. Reminding ourselves that money is only a means to an end, not the end in and of itself, can keep us from getting greedy.

One destructive way of thinking is to focus on how our lives and businesses can increase our monetary resources. Instead, we ought to develop goals for the impact we want our businesses and lives to have, and then go about using our resources to accomplish them. Because really, this is what gives life meaning, not the endless pursuit of wealth, property, and leisure.

So what are some practical ways to keep money where it belongs on our list of priorities?

In Jill's talk, she spoke about using linear programming in building a business model. I won't get into the details, but it's basically using an excel function to determine various business decisions based on various goals and constraints. For instance, if we want to maximize profits while limiting our fuel use to a specific value, excel could easily tell us how many of which product to produce. However, this is the conventional approach and prioritizes money over all else. What if profit were simply a constraint in the service of a higher goal - that is, benefit to society?

For instance, what if the goal of our music business was to maximize the number of musical instruments in local schools, while still maintaining a profit margin of 8%? Instead of cutting costs or producing the most expensive instruments to meet the soul-killing goal of maximizing profits for their own sake, we could be having a great impact on the lives of children while still operating a healthy business, all the while increasing our own happiness because we are pursuing, and fulfilling, a worthwhile goal.

And really, many of the most successful businesses are those whose unique purpose is prioritized above simply making money.

Is Big Business evil? (Makeup post)

So here it is! Last day of the quarter and it turns out a blog post is a nice break from editing a 70-page paper. Who knew? I'm going to talk about something entirely unrelated to my team project.

Something I've pondered during my two quarters at BGI is the question of ideal business size. In the current economic and social climate, large businesses are often vilified for for their impersonal size, tendency to put small companies out of business due to economies of scale, and - let's face it - their incompatibility with the aesthetic sensibilities of the urban bohemian class. Retailers like Walmart, Home Depot, McDonald's and Safeway lose out on popularity points with the socially conscious, and oftentimes the main reason is they're "a national chain." Is this really fair? And what are some benefits of companies being large?

An article I read the other day (and I can't for the life of me remember where it was) argued the idea that, in some cases, big business is superior to small business in the contributions it can make to society. The most obvious is that products become cheaper and more accessible to the middle class (good or bad depending on your viewpoint). But more importantly, there are many products which would simply not be feasible if it weren't for large-scale business with huge R&D budgets.

For example:

• Electronics: Could you imagine if we only had small, local electronics makers? We'd probably just now be getting around to using cell phones, and there would be very little standardization. And I doubt we'd have anything affordable resembling an iPhone or LCD TV. Now, the infrastructure for using those products is a different story, and one might convincingly argue that this is better provided by a public utility.

• Food: I know this might be unpopular, but large-scale food distribution networks make it possible for us to get a steady, predictable supply of food and prevent the famines that were characteristic of early agrarian societies. Western Washington simply couldn't adequately feed the 4 million people living in its urban areas with current technology, at least not year round. Local farms can certainly supplement our diets and provide a solid share of the vegetables we consume during the growing months, but a large portion of our calories come from elsewhere.

Other things that large businesses can often do better than small ones:

• Customer service and convenience: The scale of larger businesses often allows them to provide better warranties that can be serviced anywhere, whereas small companies often operate on tight margins and have a single location. Take REI: customers can buy a product with the knowledge that they can return that product if it doesn't work out, and that the company will always be there to honor that warranty (too big to fail?) This is also the case with the manufacturers of many consumer goods.
• Employee benefits: Small businesses (particularly retailers and restaurants) are often run on extremely tight margins, and one of the first things to go is often employee benefits, such as health insurance and retirement accounts. Large companies have the administrative ability and revenue to cover these benefits. In addition, employee redundancy often allows staff more flexibility in taking time off. Sure, the government should probably be providing universal healthcare, but some of these benefits are really valuable and can't be easily replicated by the government.
• Opportunities for advancement and diverse work: In a small company, oftentimes the only opportunity to move up is by moving to a different firm, whereas large firms offer more opportunities for advancement as well as trying different types of work.

Don't get me wrong! I still faithfully support lots of local businesses, and I believe they are an invaluable part of our economy. But I don't think this issue is quite as simple or black and white as we're tempted to believe.

Private Transit?

So recently I've been thinking about the role that the private sector can play in mass transit. I'm a firm supporter of public transportation as a vital part of urban living, but sometimes it leaves holes that are better filled by other organizations. Taxis are an example of on-demand transit that fulfills a need - that of the carless urbanite who is tight on time or flush with cash. Cabs are also useful after a night of drinking if the bus is too slow or indirect for one's tastes. But cabs are expensive, to the point where many would rather drive drunk to avoid paying the fares, or designate a sober driver who has to deal with the headache of parking in a dense urban neighborhood and refraining from drinking.

In Seattle, I often find myself frustrated getting between a pair of neighborhoods that are geographically isolated from one another, with limited public transit and extremely tight parking. Ballard and Capitol Hill are two of the most vibrant neighborhoods in Seattle, both boasting dense housing, amazing restaurants, and hopping nightlife and music scenes. The two neighborhoods lie on opposite sides of Lake Union:

While a cab or car ride might only take 15 minutes (not counting the time it takes to park), a bus ride takes nearly an hour, including transfers. Metro seems little interested in providing direct routing between the two neighborhoods, although matters will significantly improve once light rail serves the corridor between downtown, Capitol Hill and the University District. Even so, the quickest route between the two neighborhoods will still likely be around 40 minutes, and that's if your transfer is perfectly timed. Not so stellar. Might there be an alternative in the next decade, while the city gets its act together to build grade-separated rail from Ballard to downtown?

I thought I'd engage in a little thought experiment, and start to ask some marketing questions.

What if someone ran a van between the two neighborhoods, with stops at the most popular spots? Could private transit fill the gap? Here's what I have in mind:

 A pair of 16-passenger shuttle buses (the used one on the left is selling for $4000) could run a fixed schedule between Ballard and Capitol Hill during the evening hours, with regular departures every half hour on the :00s and :30s until, say, 3am. Fares would be about the cost of a drink -- somewhere between a cab fee and a bus fare -- and barf bags would be included. Music selection would fit the mood. Passengers could pay when they board, or pay in advance online (round trip or one-way) for a $1 discount. Because it's a set route with regular departures, people would know they can depend on getting where they want to go, and they'd quickly get the hang of exactly where they need to be to make it home after a night of carousing.

There's some serious benefits to society here too:
-Fewer cars on the road, which means less greenhouse gas emissions.
-One less reason to drive drunk means safer roads.
-Stronger connection between Seattle's hottest neighborhoods and the friends who live there, and a boon to the restaurants, bars, and music venues (and musicians) in the two neighborhoods.

So what do you all think? Would you use such a service? How far would you be willing to walk for a cheap, quick and easy ride to a hopping nightlife spot? How much would you be willing to pay? Would you be more likely to use this traveling alone or in a group? What kind of partnerships might help make this possible (perhaps a public private partnership with the neighborhood chambers of commerce?) Could this actually be a money-making venture if done right? What kinds of costs would we need to look at? Might it even be a victim of its own popularity?

Let me know what you think!

Is marketing evil?

I've been having trouble thinking of what to talk about the last few weeks. Truth be told, I'm not super interested in marketing as an overall subject. I'm interested in the particulars.

Something that does interest me, and has come up quite a bit in class discussions is ethics in marketing. The question "is marketing evil?" is often brought up. I think the answer really must lie in the idea that marketing is simply a tool (or set thereof). It can be used for good and it can be used for "evil," if you will. That is, marketing can be used to discover and satisfy an unmet or poorly addressed need, thereby improving the lives of countless people. Or it can be used to discover where a human weakness can be exploited in order to make money.

Let me try and elaborate: when a company conducts a marketing study to figure out how to sell junk food or cheap toys to children, in my opinion that company is using marketing in an "evil" way. If a startup tries to figure out how to better enable families to keep in touch or stay safe in their cars, marketing is being used for good. Many of the most important technological advances have happened, or at least gained traction, through marketing just as much as engineering. Without proper knowledge of the market and people's needs and wants, a seemingly great idea can fizzle. Even nonprofits benefit from marketing. Fundraising is greatly improved through effective research and outreach. Inversely, a firm understanding of current trends and desires (and maybe brainwashing techniques) can make a useless gadget or toy sell like hotcakes. Ever seen a Furby?

Some amount of marketing is nearly always essential for the success of a business, and it's pretty clear that there are a huge range of businesses with a wide range of goals and ethical standards. Regardless, I'm excited to learn more about how marketing can help regenerative business to be an effective force for improving our world.

Super Sunday

I'm totally fried from this week's quizzes and case study. I'll be writing my post tomorrow.