RyanAir ... gimme, gimme, gimme!

Take a look at this page from the Financial Times in which you will read about that odious little man at RyanAir who wants to grab money that he has no real right to grab at: it will come to him or not. The other company involved has essentially told him to eff off!

http://www.ft.com/cms/s/0/df47055e-95de-11e1-a163-00144feab49a.html#axzz1vcpWcg8d

Duncan Williamson

2.5 Days or Billion Days?

In my training sessions I often tell my delegates the following story:

20+ years ago someone went round the big car makers and asked them, if you had to make one of every car and combination of features of every car you make, how long would it take you?

Toyota answered 2.5 days
GM answered 2.5 billion years

I have to admit that I have lost and forgotten the source of my story although I try to find it from time to time. I think in general my story is correct. So, what now? Well, take a look here at the comparison between Android driven phones and Apple driven phones ... the key idea is complexity.

Complexity almost killed GM and I believe it should have. Apple is keeping things simple: is this a pointer to the future?

Android phones:
http://fortunebrainstormtech.files.wordpress.com/2012/05/screen-shot-2012-05-17-at-10-09-20-am.png

Apple Phones: essentially it has 3 platforms: iPhone, iPad, iPod Touch

In terms of resolution, scroll down this page and see how Android phones ooze complexity and choice compared with Apples supreme simplicity:

http://opensignalmaps.com/reports/fragmentation.php?

I find this very interesting!

DW

Continuous Improvement

This is a good read BUT you MUST read all of the comments as well as they include some very valuable and additional insights:

http://blogs.hbr.org/ashkenas/2012/05/its-time-to-rethink-continuous.html?cm_mmc=email-_-newsletter-_-strategy-_-strategy051512&referral=00210&utm_source=newsletter_strategy&utm_medium=email&utm_campaign=strategy051512

Duncan Williamson

It's as if I knew!

Everyone knows I am hardly a fan of Microsoft. So it came as a massive boost to me to read that MS is partnering its search engine Bing with Facebook and Twitter ... about a month after I had unregistered with both of them.

Phew! That was close.

Duncan Williamson

Emirates Flies Ever Upwards!

There are two reasons to go and take a look at the Emirates Group's web site, the home page of the Emirates Airlines Group:

• to see the financial and non financial results of a 24th successful year in a row for the group
• to see some lovely photos in their 2011 - 2012 Annual Report

Start here and follow your nose and eyes! www.theemiratesgroup.com/annualresults

Duncan Williamson

Facebook IPO

I have been reading about the Facebook Initial Public Offering (IPO) and here are just a couple of things that I have found  in the Prospectus document from which these extracts have come:


Facebook's Mission

We don’t build services to make money; we make money to build better services.

Culture The Hacker Way

As part of building a strong company, we work hard at making Facebook the best place for great people to have a big impact on the world and learn from other great people. We have cultivated a unique culture and management approach that we call the Hacker Way.

… The Hacker Way is an approach to building that involves continuous improvement and iteration. Hackers believe that something can always be better and that nothing is ever complete. They just have to go fix it: often in the face of people who say it’s impossible or are content with the status quo.

Hackers try to build the best services over the long term by quickly releasing and learning from smaller iterations rather than trying to get everything right all at once. To support this, we have built a testing framework that at any given time can try out thousands of versions of Facebook. We have the words “Done is better than perfect” painted on our walls to remind ourselves to always keep shipping.

(There's more to the Hacker Way in the Prospectus document from which these extracts have come ...)

Five core values for how we run Facebook

1 Focus on Impact

2 Move Fast

3 Be Bold

4 Be Open

5 Build Social Value

(There's more to these value in the Prospectus document from which these extracts have come ...)

From a financial point of view, the implied P/E ratio for Facebook when the shares are finally sold are as follows:

P/E Ratios based on an issue prices below and the EPS above	Based on results as at 31/12/11	As at 31/3/12
$28	57.14
29	59.18	72.50
30	61.22	75.00
31	63.27	77.50
32	65.31	80.00
33	67.35	82.50
34	69.39	85.00
35	71.43	87.50

Those P/E ratios are high, I think and are indicative of the hype surrounding this IPO. Take a look at the risk assessments in the Prospectus to see some of the things that Facebook is worried about. One such worry is that Facebook might not be here in 1 year's time or 5 years or 10 years ... They admit in the risk assessment section that significant parts of their business are already on mobile platforms and are moving to mobile platforms more and more and yet they have no real strategy for turning such connections into revenue and therefore profit: I find that scary!


If I were thinking of investing in a company I wouldn't pay such a vast amount for a share in this dot com company UNLESS I was merely going to try to make a major short term windfall profit.


Duncan Williamson

How Much is a Footballer Worth?

Most of us will agree that Premiership footballers' wages are too high. Far too high. Far, far too high! 

However, how should we decide what such a wage should be?

We hear that Wayne Rooney is paid £250,000 a week. Others are paid similar obscene amounts ... all the way down to marginal clubs whose players might earn as little as £20,000 a week.

 Is Rooney worth £250,000 a week and how do we know? Because of Rooney, Manchester United might be more

• successful than if he didn't play for them 
• exciting to watch 
• consistent from game to game 
• and so on

Can we quantify these effects? Yes, for example, if we can say how many more people watch United because of Rooney together with the money they pay over. We can quantify the number of Rooney shirts and boots that are sold by or on behalf of United. And so on; but this is all very pedestrian and it might be that Rooney has no marginal value.

After all, United has been very successful for decades so has Rooney made their position any better?

Let's look at JiSong Park now: Manchester United's South Korean player. I have found an estimate of his wage of £65,000 a week: much less than Rooney. Can we evaluate Park's worth? Well, I think we can evaluate Park's worth much better than we can evaluate Rooney's worth.

Take a look at this article: http://www.dailymail.co.uk/sport/football/article-2038633/Park-Ji-sung-Manchester-Unioteds-Korean-cash-machine.html That article sets out the reality that because Park is a United player AND is seen to be an all round good egg, he is adored in South Korea. A MILLION pounds worth of United shirts adorn a South Korean back, over a MILLION South Koreans carry a Manchester United credit card with Park's face on it, television audiences are massive because of Park. When Park was not played in the first team by United, South Koreans got a bit itchy about it!

 These Park related matters can be very easily quantified I think. The possibility is that the money rolling into United's coffers from South Korea could easily be just a tenth of what they are now ... that's a blind guess.

Let's see what happens when Park retires from United. Will there be a replacement South Korean at Old Trafford? If there is no replacement for Park will merchandise and credit card income from South Korea dry up?

 Fascinating, if you ask me!

 Duncan Williamson

Another airline tax? Get lost!

This is a simulcast with duncan's diurnal diatribe Read this article and then my comments below http://www.ft.com/cms/s/0/8d2ca858-92f2-11e1-b6e2-00144feab49a.html#axzz1tFw6P9cn --oo0oo-- This is a joke, yes? Cameron agrees so that's it? The reality is that politicians these days are so undereducated in the ways of the practicalities of running a country that all they can think about is to increase taxes and hope that a problem will then be solved. The reality is that this is a matter of planning, forecasting and management. Is it a surprise, for example, that today, an Emirates A380 will arrive from Dubai at Heathrow (and Manchester for that matter) and another one will arrive from Singapore? Is it also a surprise that there may be more than 500 people on each plane? Is it also a surprise that this happens every day of the year? The point is quite clear, airlines have their timetables and their slots at our airports. We all know all of this. Now, just take another step or two from here: on average, how many Brits are on these planes?; how many are from the EU and so on?; how many are from the rest of the world ... la la la. Passenger arrival statistics are a matter of fact and have almost certainly been analysed ... haven't they? Finally, we get the the nub of the matter: the Border Agency knows all of the above much better than I do but in the end it's a matter of staffing and management since the plans and forecasts have largely been taken care of. Like other people on this thread, I travel a lot and would resent most strongly if ever more taxes were loaded onto passengers. For example, a recent flight: cost of ticket £42, cost of taxes and other charges on that ticket £121. Easy target or what? Duncan Williamson