04.21.06
Posted in Entertainment at 7:49 pm by Jason Permalink
I am currently watching TV whilst working on my latest coding adventure and what do I see? A commercial featuring Lance Armstrong stating that that I could race the best of the world for his spot on the Discovery Cycling team. Sweet! I don’t see why I couldn’t win
So I go to the url in the tv spot: www.race2replace.com you then have to click on this link to get to the actual spot talking about the terms of the race: Race to Replace Lance Armstrong.

OK… I read around and then I click the link labeled “Back to Main”…
hmm I don’t go back to team.discovery.com like the link says (which looks like the below image).

I go to a directory of links (may not want to click that one) and an endless supply of pop-ups!

Seems like the programmers over at discovery.com have gotten screwed by the open source movement.
Silly discovery programmers… Don’t you know you’re supposed to audit the source of apps that you plug into your sites.
Oh, and BTW you might also want to remove your TODO lists from your production code…
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04.15.06
Posted in Marketing at 12:29 pm by Jason Permalink
Seth Godin recently wrote a post on how large companies hate that people use search on the net to find what they’re looking for… I say, boo f’ing hoo…
What are they whining about? I understand that they may have liked the good old days when people just mindlessly entered the first major company that entered their mind into the URI field, but they should easily be able to compete in the relatively inexpensive industry that is SEARCH. I guess it is just the usual complaining that they must improve their offering so that they actually deserve that user traffic…
My suggestion? Hire an SEO consultant, create an affiliate program to attract more creative minds than they obviously possess, or get out of the industry and stop complaining that you were beaten w/o even trying…
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04.14.06
Posted in Marketing at 10:00 pm by Jason Permalink
When I decided to go back to school, I decided I would be commuting, rather than moving back to LA. I would be driving 120miles each day, round trip… This presented a couple of monetary and logistical problems. First, with gasoline at it outrageously high price I would be spending around $15 per day if I continued to drive my Toyota Tacoma. Second, without using the carpool lane the drive could eat up as much as 5 hours per day, not so cool…
In order to address both of these issues I began to consider an alternative fueled vehicle. Why not a Hybrid? Because it still didn’t solve problem one, and I believe they aren’t really the awesome inventions everyone thinks they are. They cost a LOT and they have this gigantic, expensive, environmentally hazardous battery in them.
My neighbor down the street introduced me the Honda Civic GX Natural Gas Vehicle. He loves his, and it solves both of my issues AND only costs around $16K, used. The gas only costs $1.5/gal and these things were first to get carpool lane access. So, it’s a tremendous solution to my commuting issues, plus it’s a Honda, which I’ve heard, are pretty good quality.
I was sold, now I had to find one. I didn’t really want to get a new one. They’re around $22K new and I figured since I was going to be driving it to DEATH that I should just get a used one and save some cash. I started my search about three month before school started because these things aren’t that easy to pick up on the used market. After searching high and low I got lucky and found one for sale from EV Rentals. It was a 2004 model with 21K miles for $16K, great deal. I test drove it, took it to the dealer for a checkup, and then bought it.
I also considered getting Phill, but at $1500 it didn’t seem like it would ever pay for itself, and it isn’t THAT inconvienant filling every day.
Now that I’ve been driving it for the past seven months I just wanted to write about my thoughts.
It’s great! I think more people should be buying these things over the stupid Hybrids. It certainly does have its drawbacks, though, none really major. First, the gas tank takes up most of the trunk space, so there is a very small trunk (sports car size). Second, it lacking a bit in range; I get around 200 miles to the tank. With school being 120 miles round trip I need to fill up every day. Lastly, there aren’t that many gas stations. If you wanted to drive country it may be a little tough, but it is TREMENDOUS as a commuter vehicle, and it truly is environmentally friendly (not that that really had an impact on my decision).
BTW: The 2005 model has an eight gallon tank which should increase its range to around 300 miles.
I’m going to my first ever focus group next week. It’s concerning ‘alternative fueled’ vehicles, should be interesting. I’ll keep you all posted
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04.12.06
Posted in MBA at 10:16 pm by Jason Permalink
I am pretty jazzed about my two day schedule, it rocks… But Tuesdays are ROUGH! I woke up at 4am and took off to school, got there around 5:30 and hit the racquetball courts. Kicked some guy’s ass till 7:30 and then hit the classroom. The rest was a blur, but I found myself getting into my car for the 60mile drive home around 8:30pm. Arrived home by 9:30 and said hey to the wife before trying to get some sleep. Why is it that all day long you’re tired and then when you’re finally able to sleep you can’t?? So I played with del.icio.us (I know, I’m practically a laggard on this one
) until finally falling asleep around 12. It’s a damn good thing I can sleep in on Wednesdays
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04.09.06
Posted in Marketing at 1:56 pm by Jason Permalink
Leveraging my discussion of NPV calculations in a previous post, I’m going to discuss the concept of Customer lifetime value (CLTV).
This analysis is critical for many businesses, especially membership type services like netflix because it helps the firm balance customer acquisition costs with customer retention costs. Most often firms are too heavily focused on acquiring new customers and often neglect their installed consumer base (remember the cell phone plans that would give steep discounts on phones, but only if you were a new client?).
There are four factors that impact the CLTV calculation.
A - Per customer acquisition costs, the costs incurred to turn a lead into a customer.
M – Maintenance costs, the costs incurred to keep a customer.
C – Gross profit revenues generated per customer per period.
r – Retention rate
i – Discount rate (I discussed this in the post on NPV calculations)
CLTV = SUM[ (C – M)*r^t/(1+i)^t ] – A
The way this works conceptually is that we follow a fictitious customer though time. Each period a smaller and smaller fraction of him exists until he is totally eliminated.
With a little math-magic we can simplify the above equation to:
CLTV = (C-M)*[ (1+i)/(1+i – r) ] - A => (C-M) * ‘Margin Multiplier’ – A
Now we can examine the impact that the margin multiplier (MM) has on profitability at different levels of i.

Click to enlarge
We can see that the marginal impact of increasing the retention rate (which impacts the MM) is far greater going from 90% -> 95% than it is even from going from 50% - 80%. This is profound!
From these types of calculations we can determine where our marketing dollars are best spent between customer retention and customer acquisition…
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04.06.06
Posted in Marketing at 2:31 pm by Jason Permalink
Saw this post on Shoemoney’s blog this morning (Viral Marketing For The Win) and went over to check it out, after listening to the interview
Major props to this guy for finding a message that is deeply powerful to a large portion of our population, and getting that message out. Notice, from his comments, that he had very little traffic until April 5. This is perhaps when it was picked up by shoemoney, who has a decent, and influential, readership. I can’t help but suspect that the power of the online marketing community was thrown behind it
So the guy went from no traffic to over 2.5M in a little under 2 days. That is just amazing, but the other message I got was that he was having such a difficult time of monetizing this traffic flood.
He did set out with a different purpose, I understand, so from a marketing perspective he was a success. He set a goal and used his marketing skills to achieve that goal. Along the way to deciding he needed 2M hits, though, I wonder why he didn’t think of $$$. Perhaps that would have diluted the message. Indeed, if you read Shoemoney’s post, many people were a little skeptical when they saw the metrodate connection…
Anyway… I just would have liked to see him get the 3 way AND make a few million dollars in the process
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04.05.06
Posted in MBA at 11:43 pm by Jason Permalink
Seth recently posted a reason for getting an MBA: “it’s hard to follow through and stick with a self-improvement program when you don’t have the financial commitment and social pressure.”
That’s damn true indeed… Actually one of the main reasons I decided to go over ‘Just reading the books’. B-School provides a framework and a goal oriented feedback system that fosters competition and, hopefully, learning. The drawback? (other than it costs a lot
) That there IS a framework, a pretty rigid one… You give up the flexibility and a bit of the custom fit of ‘just reading the books’ when you sign on. Unless you want to totally go ‘grades don’t matter’, you are forced to take classes that won’t ever impact your future cash flows. You’re also forced into projects and readings, in the classes that you do care about, that may not be necessary for you to assimilate the knowledge, ie wasting time
Anyway… I agree with Seth in that people are inherently lazy and will always find something else to do besides reading all the texts required in the MBA path. But, there are also major costs, and I’m still not certain they are overcome by the benefits.
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04.04.06
Posted in MBA at 11:21 pm by Jason Permalink
Today was my first day back after a not long enough spring break
This is the first quarter which we had almost total control over our schedules and I managed to squeeze all my classes onto Tuesdays and Thursdays; 4 day weekend baby! It also seems like there is very little group work, also good, because I wasn’t too thrilled with the group that I was assigned.
I have the last two of the CORE classes, which are ‘Managing & Leading Organizations’ and ‘Business Strategy’. I think I will really enjoy ‘Managing & Leading Organizations’ which is supposed to teach us how to better influence and lead people as well as how to better ’size people up’; should be very cool. One of the texts is Robert Cialdini’s WONDERFUL book, ‘Influence’. I read it once before, but upon rereading it, I found that I couldn’t remember any of it! I hope this time through I can put some of the principles to use.
My first elective this quarter is ‘Technology Management’, which discusses methods for managing and marketing ‘Disruptive’ products and has Geoffrey Moore ’s ‘Crossing the Chasm’as one of its texts. I’m glad to finally be forced to read the book as i have never seemed to find the time on my own.
My second elective is ‘Managerial Model Building’. We’re supposed will learn how to apply quantitative models to complex problems of real life
I hope it lives up to all my expectations. This class is also a pre-req for ‘Decision Analysis’, which I am also very excited about.
All in all, this is looking like it could be my best quarter yet. It should be a good balance of class and work…
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04.03.06
Posted in MBA at 10:22 pm by Jason Permalink
Now for the most valuable lesson I learned in Finance.
I order to identify worthwhile (read profitable) projects one needs to determine its value. This requires us to calculate cash flows resulting from said project and discount them at an appropriate rate to account for the projects inherent risk.
There are two underlying reasons behind the need to discount future risky cash flows:
1. A dollar today is preferred to a dollar in the future. Why? Because when you have a dollar in hand you have greater options available to you. You can choose to consume that dollar or choose to put it in the bank (read invest it). If you are promised a dollar in the future your options as to what you can do with that dollar today are drastically limited.
2. A certain dollar is preferred to a risky dollar. Why? Well this should be obvious.
You would much prefer if I told you I will give you a dollar than if I told you there is a 50% chance that I will give you a dollar…
I’m not going to go into how to calculate a discount rate for a particular project… (It is what financial professionals are for) However, I will go through an example.
First, The Present value formula: PV = C/(1+r)^t
Where C is a future cash flow to be received in t periods and r is the per period discount rate. For a project composed of multiple cash flows, sum the individual PVs to get the total PV.
Example: Your company is developing an eStore that will generate cash flows of $2M in one year and $2.5M in two years. The project requires an immediate investment of $1.5M and the discount rate is 20%.
PV = 2/(1+0.2) + 2.5(1+0.2)^2 = $3.40M
The project is going to generate $3.4M, but it costs $1.5M, so we arrive at the Net Present Value by subtracting the initial investment.
NPV = $3.4 - $1.5 = $1.9M
Notice that we do not discount the initial investment because that occurred in today’s dollars, ie at time period 0.
So why do we need to do this? Because not all projects are equally risky and if we compared only their final payoffs we would be comparing apples and oranges… So we need to discount the projects payouts based on both their risk and duration of cash flows to arrive at a common denominator, if you will, that allows for comparison in real terms. This will let us decide if we want project A or B or perhaps even whether we just want to put our money in the bank and wait for project C to come around
We’ll use these concepts in later discussions of Customer Lifetime Value and Stabilizing collusive optimums…
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04.01.06
Posted in MBA at 11:48 pm by Jason Permalink
Again, sorry this will just be a short review of the highlights
The first quarter at Anderson is a little bit unique. We are required to take 5 classes; I regularly did this there in undergrad, but for some reason it was supposed to be SOOO terrible. I tend to assume the worst and am a little gullible when it comes to things that are hyped up
Hey that’s one thing I’ve learned at business school! Not to believe what the marketing department tells you…
UCLA is on the quarter system which is 10 weeks long and, usually, classes take up the entire 10. Anderson thought it would be interesting to cram a whole class into five weeks, though. We had Marketing I weeks 1-5 and Investment Finance weeks 6-10; if anything it made for an interesting change.
I had high hopes for my first quarter… I was going to go through the crucible of the most difficult quarter on my path to my MBA… Well I began to be let down. I noticed that my fellow classmates, who I was told were supposed to be so smart, were merely mediocre. The classes I was so optimistic about were found to be somewhat lacking, and I began to wonder what I was doing there.
There was one good thing about the first quarter; there wasn’t all that much group work. There was, however, a group paper in marketing that turned into a real disaster as every one of my group members proceeded to rewrite it when they were supposed to be ‘editing’. What we all learned form this assignment was to care just a little bit less about what was turned in as it wound up just wasting time. This helped immensely in the second quarter…
I know, I know… this all sounds very pessimistic with a hint of negativity and a dash of arrogance. You’ll have to forgive me, but most of it is truth, and a bit of it is plain old frustration.
I just didn’t see how any of what I learned was going to help me make more money than I was before I started. Don’t get me wrong, the classes were quite interesting, but I came for something applicable and I didn’t find it this quarter. Perhaps next quarter, they say it’s like a dimmer switch, so perhaps I’m just not able to make out the light yet
Classes taken: Marketing I, Investment Finance, Accounting, Statistics, and Micro Economics.
Rating for first quarter: 4 out of 10…
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