iPhone 11 Pro Max - It is all about the Camera!

When Apple sold its newest iteration of its flagship iPhone as a huge upgrade on the camera, they weren’t lying. I am not a professional photographer, nor a photographer in-general, however, I have seen a noticeable improvement in my otherwise amateur-ish photo escapades. Shot on iPhone 11 Pro Max…

“To find peace, sometimes you have to be willing to lose your connection with the people, places, and things that create all the noise if your life.”

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View from my balcony during day using Telephoto (wide-angle) camera and ‘burst’ mode. Unobstructed views of Diamond Head to the left and the Pacific Ocean to the front.

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Panoramic shot from my balcony….

Here are the specs of the camera system on both the iPhone 11 Pro and the iPhone 11 Pro Max:

• Triple 12MP Ultra Wide, Wide, and Telephoto cameras

• Ultra Wide: ƒ/2.4 aperture and 120° field of view

• Wide: ƒ/1.8 aperture

• Telephoto: ƒ/2.0 aperture

• 2x optical zoom in, 2x optical zoom out; digital zoom up to 10x

• Portrait mode with advanced bokeh and Depth Control

• Portrait Lighting with six effects (Natural, Studio, Contour, Stage, Stage Mono, High-Key Mono)

• Dual optical image stabilization (Wide and Telephoto)

• Five‑element lens (Ultra Wide); six-element lens (Wide and Telephoto)

• Brighter True Tone flash with Slow Sync

• Panorama (up to 63MP)

• 100% Focus Pixels (Wide)

• Night mode

• Auto Adjustments

• Next‑generation Smart HDR for photos

• Wide color capture for photos and Live Photos

• Advanced red‑eye correction

• Photo geotagging

• Auto image stabilization

• Burst mode

• Image formats captured: HEIF and JPEG

Source: Apple.com

Overused Consulting Speak (UPDATED)

Over the years, I've heard a lot of 'consulting speak' - some of it comes and goes; most of it stays around. Everybody is guilty of using it, some more than others. In the end, people need to become more articulate in their language rather than reverting back to the typical terms that become so cliche that they sometimes lose all meaning.  Here are some of my favorites decoded: 

• “Leverage down”: Coercing others into doing your work for….you.

• ”CYA”: The act of “Covering Your Ass” from being “Thrown Under the Bus” (see below)

• “Well-Being”: Being ‘well’ enough to get all of your work done efficiently.

• “Great opportunity”: The way that one sells somebody else on a task that they REALLY don’t want to do.

• Ping me: No not pong. A phrase used as a request to text, email, or message someone.

• Low-Hanging Fruit: This one has been around forever - if it's so low-hanging, why hasn't somebody grabbed it?

• Open the Kimono: A vivid image that really means..."show me your cards" - a poker reference.

• Full Court Press: A lovely basketball analogy that means that every important resource available will be committed to the task.

• Hanging Around the Hoop: The act of staying close enough to something without actively pursuing anything with the hopes of a fortuitous rebound.

• Cluster-F: The act or state of making something so congested and complicated with so many people that nobody knows what's going on.

• Game Face: The state of bringing your very best to a particular task.

• Playbook: Another sports reference that just means 'strategy'.

• Deck: Fancy word for a massive PowerPoint presentation that some poor junior resource will sweat to no-end over and may never be used...for anything.

• Loss-Leader: A good excuse for throwing investment (usually in the form of resources) at a target with no visibility of any ROI.

• 'The Bobs': A reference to the movie 'Office Space' and the two Bob's, who are responsible for interviewing people and ultimately assess where to 'cut the fat'.

• Straw-Man: An outline for a deck.

• High-Burn: Code for 'you won't have a life'.

• Strategy: A default term to describe any way of working at a problem.

• Thrown Under the Bus: A figurative saying for somebody getting blamed for somebody else's mess.

• It is what it is: An easy way to say "it's no longer my problem" or "I don't care".

• Take it offline: An easy way to tell someone that their discussion points are not worthy enough for anybody to listen to.

• Boil the ocean: The act of trying to do everything at once and accomplishing nothing.

• Let's circle back: The act of essentially telling someone - "prove to me that it will make me money and then I might listen"

• Think outside the box: "I can't think of anything good so come up with something better - just don't replicate my idea."

• Limited bandwidth: "I may have time, but I will try to look very busy to show you I don't"

• Out-of-Pocket: "I'm doing something more worthy of my time than anything you have, so don't bother me"

• Unplug: The act of pretending you have work / life balance.

• Move the Needle: Will this make us any money, if not, can it?

• Drink the Kool Aid: The act of convincing somebody to do something that they have no idea what the purpose is, or what the potential ramifications is.

• Go-to-Bat: A baseball analogy where a senior leader exercises his / her power to positively influence the performance of a more junior resource.

• What Keeps You up at Night? Lack of Ambien? No. A question asked to executives about their foremost business problems, as if the list is not long enough.

• I needed that yesterday: Code for you: 'You better move a$$ to get this done ASAP'.

• Dashboard: No - not that thing in your car that tells you how fast your going and when you're about to run out of gas. A high level data output cover sheet that simply masks more data.

• Be more strategic: This one is funny - I thought the default was ‘being strategic’.

Things Millennials and Gen-Z say in the workplace…that drive me crazy

I don’t want to generalize or stereotype, but the new generation (aka “Millennials” and / or “Gen-Z”) can be incredibly frustrating to manage in the workplace. All of the studies that I have seen are right - this new generation values different things than say…my generation or the generations that preceded me. They value holistic balance, place less emphasis on material goods, greatly value their personal time, and live in an ‘experiential economy’. However, their work style can be, at times, very frustrating. A few examples of things they say that drive me crazy:

• ”When is it due?” The most frustrating to hear when you ask somebody to do something is to hear a response of, ‘when is it due?’. What that tells me immediately is that the person manages to a deadline, which is usually more bluntly labeled as a “procrastinator”. In the business I work in, when somebody asks you to do something, the default assumption is that it is needed ASAP.

• “What do I get for doing this?” This one really gets me. There are times when you ask somebody to go above-and-beyond to help get something over the finish line. An example might be asking somebody to stay late to help finish off a client deliverable. The worst response I hear is, ‘what do I get for doing this?’ The blunt reality is that you get to come back tomorrow and do this whole charade all over again. I get it - nobody wants to give up their evening to stay at work and grind through something. With that said, it’s not like I’m asking them to do something I am not willing to do myself - I’m there right in the trenches with them. This ‘everybody gets a trophy’ and immediate gratification culture has gotten out-of-hand.

• “I didn’t go to college for this” There are menial things in every job that nobody wants to do, but that just need to get done. There is no question that many of these tasks do not require a high school GED, let alone a college degree to do. It may involve photocopying; it may involve formatting a document; it may involve manually recalculating values to ensure a model is working correctly. In any case, these can be critical tasks and when you ask somebody to do them, the last thing I want to hear is, ‘I didn’t go to college for this’, which is another way of saying, ‘I am above this’. What kids out of school don’t realize is that you have to earn opportunities - if you can’t photocopy with proficiency, there is no way in hell that I (or anyone else) would give you something more strategic to do.

Perhaps I am being overly sensitive, but having grown up in the “do whatever it takes” culture, it can be very frustrating when kids are given incredible opportunities to prove themselves that will lead to long-term benefit, but they constantly want to shortcut ‘the process’ to find short term satisfaction. The amount of jobs that I am seeing kids have 5 or 6 years out of school now is crazy. I am not saying that there cannot be benefit to changing jobs, especially when you are constantly looking for new challenges. However, I don’t believe that is what is happening in most cases. What I think is happening is kids are not finding that short term gratification in a job, and instead of earning the opportunities that truly stimulate them, they go seek it out in another job. It is not a good or bad thing - it is just reality. Employee loyalty is limited to what you can provide to that employee today.

Rolex's Baselworld 2019 - "Don't Hate the Player, Hate the Game"

Source: Rolex.com - GMT-Master II (Reference: 126710BLNR)

So the biggest headliner at the biggest watch show in the world gave what most have considered a ‘less-than-stellar’ performance with its new releases for 2019. Rolex released a number of new SKUs, with the main focus on the following three models:

1. An Updated ‘Batman’ (Ref: 126710BLNR): A stainless steel “Black and Blue” (aka the “Batman”) GMT-Master II with an upgraded 3285 movement and jubilee (as opposed to the traditional oyster) bracelet;

2. A new Yacht-Master (Ref: 226659): A Yacht-Master in 42mm for the first time in white gold with an updated 3235 movement, matte black Cerachrom bezel, on an Oysterflex bracelet with Glidelock extension clasp (btw, once they release this in SS, it is going to be one hard find); and,

3. A Two-Tone Sea-Dweller (Ref: 126603): A Sea-Dweller in two-tone for the first time ever with stainless steel and 18 carat yellow gold.

It should be noted that Rolex also introduced updates to its Datejust lineup and can’t forget about the completely ridiculous new Daytona with an elaborate intertwining of diamonds throughout the dial and an iced-out bezel.

Rolex Strives to Exert Absolute Control Over the Primary Market

As I’ve said many times, Rolex is a family-owned business that does not have shareholders to appease that controls its business (including production, model proliferation, and distribution) with the same precision as its newest mechanical movements. The fact of the matter is, while many want all of these new models, would it really make them any more accessible to the general public? The answer is “no” - you still cannot go into any Rolex Authorized Dealer (AD) and find any Rolex stainless steel sport watch - that goes for models such as the No-Date Submariner to the Cerachrom Daytona. And…models introduced last year (such as the highly-popular GMT-Master II "Pepsi”) remain both inaccessible through the primary market and still fetching near double retail price on the secondary market. I have no doubt that the ‘new’ Batman, will sell for thousands over retail price when it finally hits retailers (likely in the summer) and all of them will already be ‘allocated’ to preferred customers.

So as Rolex watches other high-end watch brands see their watches discounted by their own distribution channel and selling for huge discounts on the secondary market, the company sits in a highly enviable position of knowing that it can sell every watch it makes at retail price, and still leave demand on-the-table. Rolex has been playing the same game for the last four or five years, and if you don’t believe me, do two things

• Take a look at what you could buy for retail price from a Rolex AD in 2014 vs. what you can buy from that same AD today; and,

• Look at what a pre-owned stainless steel Submariner was selling for on eBay in 2014 (likely a discount) vs. what a similar watch is selling for today (likely a heavy premium).

Aspire for Desire

Rolex is an aspirational brand that sells aspirational products, and the best way to maintain that type of brand is to leave the public…desiring to aspire. And it certainly isn’t going to make people happy, but in an industry where everybody else is struggling, by not giving the public what it truly wants only strengthens Rolex’s market position by creating an insatiable level of demand. After all, the allure of Rolex watches are in ‘stories’ (not precious metals) and the story of the day is….”I always want what I can’t have.”

Out of Thin Air - Apple Figures that will Blow Your Mind

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Image Source: Apple.com

Apple reported a “disappointing” holiday quarter (Dec-18) in January, with a slump in iPhone sales attributed to lower-than-expected sales in Greater China, foreign currency weakness , and a weaker upgrade cycle due to further pullback of carrier subsidies and the iPhone battery replacement cycle. Apple CEO, Tim Cook, had already issued a letter to investors warning that the company would fall short of its Fiscal Q1 guidance that it provided in October, which sent its shares tumbling in an overall horrid quarter for tech stocks.

But beyond all of the ‘noise’ and obsession around iPhone sales, Apple reported a number of other stunning statistics that ‘should’ alleviate concerns around the company’s continued influence in the world as the undisputed leader in the amalgamation of hardware, software and services. Here are a few:

Installed Base

• Active Installed Base (Measure of Users for all of its Devices): 1.4 Billion (up ~100 million over past 12 months)

• iPhone Active Installed Base: 900 Million (up ~75 million over past 12 months)

Services

• All-Time Record Revenue in Dec-2018 Quarter: $10.9 Billion

• Growth of Services Revenue: <$10 Billion in Calendar 2010 to $41 Billion in Calendar 2018

• Apple Music: 50 Million paid subscribers

• Apple Pay Transactions in Dec-2018 Quarter: $1.8 Billion

• App Store Transactions: Largest single day ever with >$322 Million of purchases on New Year’s Day

• Largest News App in the World

Wearables

• Wearables (Apple Watch + AirPods), Home, and Accessories: 33% y-o-y growth in Dec-18 Quarter

• Wearables (Apple Watch + AirPods): 50% y-o-y growth in Dec-18 Quarter [Both Apple Watch and AirPods were supply-constrained exiting the quarter]

• 2018 AirPods Sales: Apple does not disclose these numbers but Centerpoint Research estimates Apple sold 35 million AirPods in 2018 - at $159 per pair, that equates to $5.6 billion

• 2018 Apple Watch Sales: Apple does not disclose these numbers but Strategy Analytics estimates Apple sold 22.5 million Apple Watches in 2018 - at a conservative $375 per watch, that equates to $8.4 billion [Note that Rolex, which is a private company, is estimated to have $4.6 - $5.0 billion of annual revenue, so Apple is by-far the largest watch ‘brand’ in the world, as measured by revenue.]

• Apple’s Wearable Business Size: Assuming $5.6 billion of AirPods revenue and $8.4 billion of Apple Watch revenue, Apple’s Wearable Business is likely over $14 billion now, making it a Fortune 200 company.

Apple’s Wearables statistics are especially astonishing because that business did not even exist four years ago, and now it generates the revenue of a Fortune 200 company. Further, it went from $0 to the largest watch brand (as measured by revenue) in the world in a span of less than 5 years. The Apple Watch was decried as a “why would I need one of those?” devices when Cook unveiled it in September-2014 and yet, the company has sold more watches in each successive year after launch. Many are on their 2nd or 3rd version now. We are just beginning to understand the power of this device and its implications for the future of active health monitoring - Apple just completed its heart research study in collaboration with Stanford Medicine and had over 400,000 participants.

So while the iPhone continues to be Apple’s ‘bread and butter’ it is no-less-than staggering how interconnected its products and services are in the world. No other company has the ability to drive an industry and its user base forward like Apple - Steve Jobs has been gone for over 7 years now, yet his vision of creating products that leverage technology to elevate the human aspiration is as strong as ever.

5 Watches I Hope to See Unveiled at Baselworld 2019

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The world of ‘haute horology’ will once again convene in Switzerland for Baselworld 2019 from March 21st through March 26th for some of the most prominent watchmakers in the world to show off their latest-and-greatest updates to their collections for the upcoming year. There will be some notable absentees this year including the Swatch Group (Omega, Blancpain, Breguet, etc.) who announced that it will no longer be participating in Basel in late-July. In any case, the focus (as it usually is) will be on the most prominent watch brand in the world - Rolex. Last year’s unveils from Rolex and its ‘sister brand’ Tudor were some of the most widely coveted timepieces of the year that still cannot be found in any Authorized Dealer (“AD”) and therefore, continue to command significant premiums on the secondary market, which includes:

• The “Pepsi” Stainless GMT Master II with jubilee bracelet (Ref: 126710BLRO), which is holding around $18,000 on the secondary market (about double the retail price of $9,250).

Source: Rolex.com

Not to be outdone by ‘big brother’, Tudor surprised the world by introducing two new models, which also remain highly coveted and in short-supply:

• The Black Bay GMT (Ref: 79830RB), with a similar ‘Pepsi' bezel (albeit with a burgundy and navy bezel) and an upgraded in-house MT5652 movement (70 hour power reserve).

• The Black Bay 58 (Ref: 79030N) - a big hit with the new-vintage crowd with its 39mm size, 11.9mm thickness, and its new customized in-house MT5402 movement (also a 70 hour power reserve).

Source: Hodinkee.com

So with that being said, there is no lack of curiosity or interest as to what the ‘House of Rolex’ will bring to Baselworld 2019. The irony in all of this is no matter what they unveil, nobody without a significant connection to an Authorized Dealer (“AD”) is going to get access to these watches at anywhere near retail price. In any case, I can still hope for these 5:

1. A Revitalization of the Tudor Submariner: Tudor is using its Instagram feed to tease what it will unveil at Basel, and from some of the pictures, it would be hard not to believe it will revitalize its legendary submariner line, which was a standard issue used by a number of country’s Navy divers, including the United States. The only questions with the rebirth of the Submariner is the overlap with Rolex (which appears to be no issue given the simultaneous “Pepsi” launches last year and the standing of the Heritage Black Bay series, which is effectively a diver’s watch.
   

2. A ‘Modern 6541 Rolex Milgauss’: Always a sucker for a rotating bezel, I would love to see Rolex resurrect a new Milgauss model in the spirit of Ref. 6541, black rotating bezel with the Milgauss name in red font and a black honeycomb dial. Rolex, like Tudor, has also been foreshadowing a change to the Milgauss with 11 straight posts centered on the watch. One thing that would be a shame to lose is the green domed sapphire - a manufacturing marvel that makes the current iteration really stand out from the crowd.
   

3. A Money Green Tudor Pelagos with a GMT Hand for ‘Good Measure’: The Pelagos is one of the most underrated watches in the entire Rolex / Tudor portfolio - a 42mm titanium diver with an in-house movement and one helluva auto-adjustable clasp, which honestly is on-par with, if not better than Rolex’s own Oyster Glide Lock bracelet. So what the heck, why not give us a “money green” Pelagos a la the very popular (and now very expensive) Rolex Submariner Hulk. And while they’re at it, would it hurt to throw in a GMT hand with a full 24-hour hour bezel to match?
   

4. Rolex Submariner with Oysterflex Bracelet: Ok, we know that the Submariner needs an updated movement - it’s using the 3135 COSC-certified movement - a very reliable movement, but lacks the 70-hour power reserve that seems to be standard fare for all new Rolex models. But here’s a thought, what about pairing the legendary dive watch with its amazing Oysterflex Bracelet? I know Rolex has limited the Oysterflex Bracelet to its precious metal watches (e.g., the platinum and gold Daytona’s among others), but it wouldn’t hurt to give the most recognizable Rolex of modern times a new look.
   

5. Black Bay 58 with New Colors: So the Black Bay 58 has turned out to be a wild success for Tudor. It’s slim profile (as compared to the normal Black Bay) and 39mm size is exactly what the market wanted. So, why not bring some colors to the model just like what Tudor did with the Heritage Black Bay - perhaps we’ll see a burgundy and / or navy bezel to align with the Heritage Black Bay line? Whether they do this or not, I’m sure the 58 will remain colorfully ‘out-of-stock’ at your local AD.

I am convinced we will not see the following: A stainless steel “Coke” GMT Master II; A new stainless steel Daytona; or, a new Stainless Steel Submariner with a new color bezel (a la “the Smurf”).

Teaching - Differentiating Leadership and Management

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NBA Legendary Coach Phil Jackson's 13 Championship Rings - 11 as a Coach (6 with Chicago Bulls, 5 Los Angeles Lakers), and 2 as a Player (New York Knicks). Source: Yahoo! Sports

"Leaders See Possibilities and Enable Others to Seize Possibilities"

Leadership is a universal connector in life, but often is most accentuated in business and academia. It is a complex topic as it is all too easy to confuse management with leadership.  Management is the production of acceptable results within known constraints and conditions. Leadership is all about 'changing the order of things' - providing a vision to those you lead that is so powerful and convincing that it ultimately allows them to overcome the two greatest forces that work against change and progress:

• Fear of the unknown; and,
• The desire to maintain the 'status quo' - the notion that the way it has been done is the way it always should be done.

Perhaps a leader's greatest recognition is the presence of fear.  If you are trying to drive a program or a team, it is essential for you to recognize the presence of fear.  All people are afraid of change - it is uncomfortable because it does not have defined results.  But, you have to drive change because of the age we live in.  We live in an era where we have more capabilities than ever before (largely driven by technology) - we have the power to feed every person on the planet if we want to; we have the power to connect every person to each other via a network; we have the power to innovate to make things better, safer and more 'routine' for people....in short, we have the power to harness technology to drive more dramatic results in our respective professions than our predecessors - it is not a linear curve by any means.

So the question becomes, how can leaders harness the age we live in to drive change for those that they lead?  I would summarize it with the 3'C's:

• Capability
• Collaboration
• Character

Capability: 

"Courage is not the absence of fear; Courage is acting in spite of fear."

Capability is not so much about one's technical abilities, a measure of IQ, or even about productivity.  It is about recognizing the importance of "asking the question, and waiting to hear the answer". Great leaders always harness the capabilities of those they lead, but they have to be able to listen to know where people stand - what are their fears? what is their vision for the future? what are their motivations (e.g., what do they want out of 'this'?)

You have to ask the right questions.  No matter how good the answers have been in the past, there will become a time when those answers will no longer be good enough.   And the only way to address that plateau when the answers of yesterday are not the answers of today is through change and risk-taking.  You cannot allow those you lead to 'settle in' is the biggest failure of a leader.  Managers perpetuate the status quo; leaders drive their students down a path to destroy the status quo through calculated risk-taking and an ultimate desire to ask the ultimate question, "is there a better way to do this?".

Collaboration: 

"Leaders drive change, but collaboration EMPOWERS change."

All the capability and intellect will not create a great leader.  Great leaders leverage the power of collaboration to bring together diverse points of views to generate rigorous (sometimes contentious) decisions that have tangible impact.  The worst thing in this world is 'group think' - surrounding ourselves with those who think like us, act like us, share our same point of views, etc. - think Election 2016.  'Group think' is very dangerous because you eliminate the opportunity to see possible solutions to problems when viewed from different angles, which is all about diverse perspective. 

When you only surround yourself with people like yourself, you're going to miss something very big.  Diverse experience, cultural backgrounds, and life perspective is a huge part of unlocking human potential.  Back to the coaching analogy, during his days with the Chicago Bulls, Dennis Rodman was an outcast in the NBA - a misfit that nobody wanted to bother with.  Phil Jackson did - he saw Rodman's talent, not in isolation, but rather, as a critical link to something much bigger - a piece to a large puzzle.  When you only look at things in isolation, you ignore the reality that one plus one....can equal three or more.  But, you have to be willing to encourage diverse perspectives to come forward...even when you don't necessarily agree with them; you have to create forums where perspective from everybody is not only heard and encouraged, but required.

Character

"Teach people the importance and consequences of their actions when nobody is watching."

Character is about judgment, perspective and ethics.  We live in an age of incredible amounts of information at our fingertips - all of the technology and information we have access to encourages us to 'speed things up' - opinions and facts all compete for the same legitimacy. The wonderful power of technology enables the proliferation of information - some of which is useful and legitimate, others of which is downright dangerous.  Judgment is ALL about knowing when to act, and when to pause...the wisdom to know when more information is needed to make a sound decision.  It sounds very easy, but with all the resources that often prioritize efficiency over efficacy, leadership is about having the courage to push the 'pause' button, but everything around you is saying 'full speed ahead'.

Perspective is all about having the discretion to differentiate 'the merely interesting' from 'the truly important'.  Diversity and creating discussion that brings forth different opinions enables perspective, and it becomes a vital piece of the filter that will enable you to 'edit' down the vast amounts of information that saturates our lives.

Ethics is about values...and values matters.  Ethics is all about what you do when nobody is watching.  The natural tendency is to allow yourself and those you teach to constantly slip a little closer to that 'boundary' between right and wrong.  The problem is that those little steps towards 'that line' are accretive - they are cumulative and they don't reset.  So allowing people to slowly get away with more-and-more eventually drives ever closer to crossing that line.  The line between right and wrong (insignificant versus consequential) is always going to vary, but you have to believe that people have a general sense of the types of behaviors and actions that fall on each side of 'the line'...but you have to decide what is truly consequential.  You cannot micromanage every indiscretion because most of it is petty and not your highest and best use of time. 

5 Key Traits That Make Great Coaches, TEACHERS and Mentors (NOT ROCKET SCIENCE):

1. Self Awareness & Trust: This whole topic of Emotional Intelligence (EQ) that has become so popular as of-late is, in my opinion, all about self-awareness - understanding how your actions are perceived by those that you are trying to guide and influence.  You have to build trust with your students - creating mechanisms for honest and productive dialogue is critical when things are going well, but more importantly, when things are amiss.  If this type of trusted channel does not exist, there is no way to help.  So create that channel - get out of the classroom, go have a drink or a cup of coffee...go take a walk.  Put people in their comfort zones where they can share and you both can collectively discuss solutions to improve the situation.  Be a mentor - pose questions, listen, and refrain from simply providing directives.  By posing questions, providing perspective, and listening, you enable others to 'own' their decisions.
   
   Phil Jackson was a master of knowing when to 'step-in' and more importantly, when to 'let things settle'.  Back to the Rodman thing...when Rodman would get thrown out of games, he would not immediately go and address the issue - that would have been throwing 'fuel on the fire'.  If Rodman showed up late for practice, he didn't scold him on the spot.  He found little gaps of time after the dust had settled and emotions had calmed to address the issues in a way that was far more effective - 'spur of the moment', reactionary emotion is often a barrier to effective communication and Phil Jackson knew that better than anyone.
    
2. Preparation of Structure that Encompasses Information, Ideas, and Areas for Discussion: If preparedness is just about showing up with information, then point people to a website and be done with it.  Come prepared with the information as the teaser, but structure sessions in ways that leverage information into the dicussion of ideas and constructive dialogue that gets people to think and understand how others are thinking - that's where the real learning takes place - Exchanging ideas actives information into insights...and insights drive learning.
    
3. Optimism and Encouragement: In a cynical world with generational gaps, it is very easy to be dismissive of those that are not 'falling in line' or not living up to the same standards that you once set for yourself.  But, writing these people off is not the answer. Great teachers will seek to bridge gaps through optimism and encouragement that become the ultimate mechanisms for change. Discipline and indifference is warranted for those that just don't care, but if you create a communication channel, you'll often find that people at your level of the ball game exhibit certain behaviors for a reason - your goal should be able to find out what those reasons are and course-correct.  But, you have to bring a constructive attitude forth that creates possibilities for solutions - to demonize is to destruct.
    
4. 'Drinking the Kool-Aid' - Lifelong Learning: Great teachers don't just profess the value of learning, they are models of it - they show an insatiable thirst for knowledge.  The teacher that 'knows it all' is about the most counterproductive thing ever as part of being a teacher is instilling the idea that 'knowing it all' is an unattainable goal in any field or profession. So, you have to show that same intellectual curiosity and be part of the dialogue - sometimes as an authoritative figure, but also as a person who is searching for the same answers.  
    
5. Gratefulness: Great teachers actively demonstrate how grateful they are for the opportunity to have a platform to influence others.  Gratitude is a two-way street and showing it on a daily basis can only perpetuate a mutual respect that facilitates learning, passion for your field, and achievement.

“True teachers use themselves as BRIDGES over which they invite their students to cross then, having facilitated their crossing, joyfully collapse, ENCOURAGING THEM TO CREATE BRIDGES OF THEIR OWN.”

— Nikos Kazantzakis

RE2PECT: Why We Celebrate Derek Jeter...

Source: www.nike.com

Tonight, Derek Jeter's number 2 will be retired by the New York Yankees - it will be the last single digit number retired by the franchise. Having your number retired by such a storied franchise alongside legends like Babe Ruth, Mickey Mantle, Joe DiMaggio, Lou Gehrig (and many more) is an incredible recognition, but it leaves so much on the table of what his career meant to the modern day professional athlete as the 'ultimate role model'.

Yes, Derek Jeter has first-ballot Hall of Fame stats - 3,465 hits (6th all time & most by any shortstop ever), a .310 batting average, 14 All-Star Selections, 5 Gold Gloves, 5 Silver Slugger Awards, 2 Hank Aaron Awards, 1 Roberto Clemente Award, and 5 World Championships. But those stats do not adequately articulate why we, even as non-Yankees fans (as I am not), still rooted for Derek Jeter.

• 20 Years in One Uniform: Derek Jeter played 20 major league seasons for 1 franchise. Today, you'll be lucky to find a player with that type of longevity who hasn't played for 3-4 franchises. Jeter displayed a unique sense of loyalty that few players today care about. Was he paid well? Absolutely. But, all sports superstars are paid well, yet very few exhibit the loyalty of a Derek Jeter or even a Kobe Bryant.
  
  Those 20 years weren't always a bowl of cherries either - his 5 championships were split between two different regimes - the Joe Torre era and now the Joe Girardi era. And he played for a very hands-on owner that was not shy about blasting his own players and coaches in the media.
   

• Scandal-Free Career: Derek Jeter entered the Major Leagues in 1996, which was sandwiched between the baseball strike that lost the sport many fans in 1994 and the now infamous 'artificially powered' home run derby year of 1998 where Mark McGwire and Sammy Sosa both broke the single-season home run record held by Roger Maris. He joined the league at a time when the media's coverage of athletes started to delve far beyond what they did on-the-field.
  
  Derek Jeter played his entire career during an era of scandal-after-scandal in professional sports - Performance Enhancing Drugs (PEDs), Adultery, Rape, Murders, Multi-million dollar contracts given to players whose playing abilities turned out to be worth nothing, and the list goes on. Yet, Derek Jeter was never so much as implicated in ANY scandal. Did he date a lot of women? Yes, but the difference between Jeter and so many other pro athletes when it comes to having flings with many women is that he was not married - a subtle but important distinction.
   

• 'The Captain': The modern day sports locker room has become a reporter's paradise for information that is intended to send subtle, yet very public messages about players who can't get along with teammates. It would be very difficult, if not impossible, to find a story where Jeter's name was mentioned in the context of negativity from a teammate, nor will you find a story where Jeter publicly criticized a teammate.
  
  Even when A-Rod was going through his steroids scandal, Jeter handled it very delicately by talking, but not taking aim - he provided his views on PEDs, but he did not take it to the point of criticizing A-Rod through public channels. Jeter was known as 'The Captain' for a reason - he was a consummate leader who worked hard at the game, and always let his play on the field do the talking.

It is hard to find really great role models in sports today who perform brilliantly and haven't been involved in some scandal or moved from team-to-team looking for better money. When history looks back at this era of sports, there will be one name that overwhelmingly takes the spotlight - Michael Jordan. And there's nothing wrong with that - Jordan was the most successful and dominant player who hit his peak at that perfect time when sports transcended the boundaries into media, entertainment, and business (e.g., Nike Air Jordan's). But, if Jordan had started his career in 1996 as opposed to 1984, I can guarantee you that his image would have been significantly tarnished by his off-the-field behavior. We saw a glimpse of it with the gambling, but let's face it, that was not Jordan's only vice. Derek Jeter will be as underappreciated 50 years from now as he is today. 

"Derek Jeter was not perfect, but if we put who he was into the context of this generation of professional athletes, he was about as close as it gets...and that's why we Celebrate and RE2PECT him."

Why Being the Uber of ____ Failed.

Over the last 20 years, there have been signature companies that have completely transformed paradigms and platforms that redefine the way we consume products and services - three examples would be AAPL, AMZN and Uber. As other companies rise up and look to gain prominence, the natural tendency is to call themselves the AAPL of ____ or the AMZN of ____, and most recently, the Uber of ____ [Insert industry or geography]. An example of this 'phenomenon' would be the consumer electronics company, Xiaomi, which has effectively branded itself as the AAPL of China. Companies that have branded themselves as the "Uber of ____" have, in most cases, found that replicating the business model does not equate to replicating the success.

The business model can be replicated.

A company that calls itself the "Uber of ____" is effectively saying it is replicating Uber's labor-driven marketplace business that matches a very large supply base of drivers with a healthy demand of riders in an on-demand way and at a low price-point. This business model can certainly be replicated in other sectors beyond transportation such as food and product delivery (DoorDash, Postmates, Instacart, etc.), assistance with everyday tasks (TaskRabbit), and house cleaning. These companies ("market-makers") all fundamentally rely on the ability to connect independent contractors, who can flip on their availability and desire to work at-will, to satisfy consumer demand for their services. Like any marketplace, the transaction price fluctuates based on the balance of supply and demand. The market-maker, for the most part, scrapes a small percentage fee off every transaction.

Scale:

Marketplace businesses require a huge amount of scale as each transaction yields a small % of the actual price paid by a customer. Most companies account for this on a net revenue basis where, for example, $100 million of transactions (volume) may only yield $15 - $20 million of net revenue and that's before accounting for any G&A costs.

Labor-driven marketplace businesses are unique in the sense that in order to build scale, they rely on BOTH healthy supply and demand, neither of which can be directly controlled by the market-maker. However, the market-maker can indirectly control supply and demand with incentives and promotions (e.g., incentive fees to the labor supply-side with higher % payouts and discount promotions to the demand side). This sounds great, but the reality is that these types of promotions that are required to get both sides of the market hooked to the service create a hugely unprofitable business initially, even at the net revenue level - essentially, you pay out more to your labor supply than you collect from the customer demand side. However, once you establish a healthy market, you can essentially 'flip-on' profitability by reducing subsidies to your labor and eliminating discounts to your customers. It doesn't happen overnight and both sides of your market tend to be fickle, especially if competing market-makers exist.

Capital:

Given the costs associated with investing in markets (through subsidies and discounts) to build scale, companies need an enormous amount of capital to stay afloat. Even those that can generate positive net revenue (customer collections minus labor payouts), still have to cover a lot of other costs (marketing, corporate salaries, servers, investments in new technology), etc.). These below-the-line costs inevitably create companies that blow through capital faster than it can be raised.

What Does Boxing Have to Lose in 'Mayweather - McGregor'? Everything. View fullsize

The once-ridiculous thought that the undefeated boxer, Floyd Mayweather, Jr., would come out of retirement to fight the UFC's reigning lightweight champion, Conor McGregor, is now looking like just a question of 'when?' not 'if?'. After all, Max Kellerman of ESPN and HBO, made a very good point: "Fighters don't truly retire until people stop handing them huge paychecks". And you can bet that Mayweather's manager, Al Haymon, is going to ensure that Floyd gets a very big check for this fight - I am convinced it will be well into the 9-figure range.

Staking the Actual Fight

So all the commentators and pundits on both sides (boxing and even the UFC) acknowledge that given the match will be fought under boxing rules, Floyd can't and won't lose. Most argue that for Mayweather to take his first loss, it would require some very awkward 'Sunday punch' from McGregor that catches Mayweather off-guard...and Mayweather's masterful defense just won't allow that to happen.

But there is question as to 'how' Mayweather will win. Mayweather is not a power puncher. In fact, if you take out the weird Victor Ortiz KO, Floyd hasn't scored a knockout since he floored the then-undefeated, Ricky Hatton, 10 years ago. Floyd is a finesse fighter who relies on his famous 'shoulder-roll' and his lightning quick reflexes to pot-shot opponents into virtual submission. Mayweather has taken a lot of criticism for his lack of an exciting style, but it's his superb defense that has enabled him to stay undefeated and not take punishment in the ring. He's never even been 'officially' knocked down (some would dispute this in the Judah fight).

• Age: Floyd is now 40 years old - an age that was once considered ancient in boxing. But, both Floyd Mayweather and Bernard Hopkins have shown that a disciplined lifestyle (no alcohol, no weight fluctuations, etc.) can very much extend a boxer's prime long after his peers have retired. In any case, you have to take into account that Floyd is 40 and McGregor is 28 - the exact age that most consider an athlete to be at his physical peak.
  

• Style: Floyd is a defensive fighter who is elusive, doesn't allow opponents to 'cut off the ring' and is very 'surgical' in his punches - he lands at a very high percentage. I don't know much about McGregor, but apparently he is a solid boxer with a lot of power. The question will be about whether Conor can utilize head movement (he's not known to) to avoid Floyd pot-shotting him. Also, they will apparently be using boxing gloves (likely 10 oz), as compared to the typical MMA gloves of 4-6 oz., meaning McGregor's power will be somewhat mitigated by the padding.
  

• Vulnerability: Floyd may be undefeated, but he's not immortal. He did not look particularly sharp in his last two fights against Berto and Pacquiao - he was never seriously hurt, but it looked like he had lost a tiny step. The one fight where he did get caught was in his first fight with Marcos Maidana in May-2014. Maidana was a brawler who threw shots from awkward angles, unleashed 80 - 100 punches per round and fought pretty dirty. That very well may be McGregor's game plan to exposing Floyd.

Likely Outcome: Floyd by lopsided Unanimous Decision. Floyd gives McGregor a boxing lesson, wins by luring McGregor into his notorious traps, and then pot-shots him to rack up the points, and releases from engagement upon scoring.

Why Boxing Has So Much on the Line...

It is boxing, not the UFC or even Mayweather, that has everything to lose in this fight. Since this fight will be under 'boxing rules', if McGregor was to somehow beat Mayweather, or even give him a competitive fight, it would hurt boxing in a very big way. Boxing has always disregarded MMA as basically an unskilled, tough man competition where the craziest guy wins the fight. Boxing regards itself as 'the sweet science' - a blend of the mind and the hands in skilled combat. So, if a UFC fighter, with no legitimate professional boxing experience, was able to beat or provide a close fight with arguably the greatest boxer of his generation, what does that say about boxing? 

On the flipside, if McGregor was to get annihilated, UFC fans will always be able to say, "McGregor is an MMA fighter, not a boxer" and the expectation was that he was no match for Floyd Mayweather from the outset.

But make no mistake, there are unintended consequences for the UFC if McGregor was to pull off the improbable. McGregor is going to take home the biggest paycheck in the history of the UFC for a fight with Floyd Mayweather and don't think for a second that other UFC fighters aren't going to see that. Dana White will start seeing a flood of UFC fighters wanting to go to battle in similar crossover fights for huge paydays. So, I think the potential effect of a strong McGregor performance in a fight with Floyd Mayweather, Jr. raises the biggest question of all: 

“Will this fight represent ‘the beginning’ where combat sports begin to converge to expand the money pot for all involved?”

The Degradation of Writing

Ask a new hire to build you a financial model, and you will likely get exactly what you asked for– a fully functional and integrated tool with all the ‘bells and whistles’ that makes you think, “wow, this is amazing.”  Ask that same new hire to draft an email explaining what the model is and how it addresses a fundamental business problem, and you will likely get something back that makes you think, “wow, has this kid ever written an email before?”  It is not only embarrassing, it is also very sad.

We live in a society where communication is done 140 characters at a time.  It is a society that embraces expression through photos, emoji and messaging.  Interpersonal communication has been degraded to the point where we have removed the “personal” part to live within digital communities.  When was the last time you hand wrote a letter to somebody?  There is a generation that still embraces handwritten letters, personal emails, and general written communication.  Unfortunately, that generation is not the one that our future relies on.

It is all about efficiency.

The proliferation of social media through mobile has enabled an on-demand world where personal communication is “hashtagging” a photo, posting links to others' content, ‘liking’, re-tweeting, multimedia messaging, or SMS texting.  Terms like “LOL”, “OMW”, “NP”, “BRB”, and “IMO” are now common place at home, with friends, and even with coworkers.  Large corporate enterprises have also adopted internal messaging platforms that have replaced communication that used to be done exclusively through email.  This phenomenon continues to morph as we see more platforms embrace short-form and new types of communication.  The new communication paradigm is all about efficiency – saying more with the least amount of words, or in some cases, no words at all.

Efficiency comes at a cost, but also presents an opportunity.

So while the new communication paradigm offers us speed and efficiency, it also fundamentally degrades our ability to create and write.  Some say writing will fall into obsolescence in a similar way that texting has replaced phone calls.  I disagree.  Just like there is no replacement for hearing someone’s voice, there is nothing that will ever replace the ability to articulate thoughts, observations and ‘a message’ via a well-constructed, coherent piece of writing.  It may become less important, but it will never go away.  As short-form communication continues to overshadow traditional writing, the ability to actually write will become an increased area of differentiation in the workplace.  But, great writing (especially in business) needs to embrace the same type of efficiency that we have grown so accustomed to - it needs to be framed in a way that differentiates the 'truly important' from the 'merely interesting'.

Creativity on the decline.

Perhaps most disturbing is the fact that people are no longer creating original content; they are merely 'sharing' or 'liking' other peoples’ work.  A recent article indicated “original broadcast content” sharing on Facebook is down 21% year-over-year, a further decline from the 15% decline seen last year.  Just to be clear, original content is not defined strictly as long-form writing – it also includes one’s own pictures or other self-curated media.  However, this trend does point to a larger theme - the overall indifference of being original in today’s society.

There was a movie in 1995 called “Mr. Holland’s Opus” about a music teacher (Glenn Holland) who tries to get his students to embrace the arts through unorthodox teaching methods.  Towards the end, he receives news that the school has budget issues and will need to cut all curriculum around the arts.  As he tries to fight for his passion, he says:

"Well, I guess you can cut the arts as much as you want…Sooner or later, these kids aren’t going to have anything to read or write about."

It is an impressionable quote because the movie was made over 20 years ago, but it speaks to the very issue that embodies the troubling Facebook statistics – it is far easier to share somebody else’s work than create your own; it is far easier to text than to write….it is far harder to exercise that portion of the brain that values self-expression as a fundamental driver of personal identity.

Bringing it full circle.

The ability to build a financial model or another analytical tool is an extremely valuable skill.  However, for all the people that can build and automate those tools, there are few that can synthesize their value in written communication. The value today actually resides with the people who understand the tools and problems they try to solve - those that can "bridge the technical with the practical".  Clients don't care about your models; they care about solving problems.  After all, I have seen analytical tools become completely autonomous, but I have never seen the automation of interpersonal connection that explains the answers to the very questions that people ultimately care about. 

Writing is nothing more than the distillation of a lot of ideas to provide an informative perspective.  As social media continues to drive our communication, I think it is more important than ever that we not lose sight of the fact that even the most sophisticated emoji will never explain a perspective, nor will 'liking' somebody else's work ever be as valuable as sharing our own.  To enhance our digital and physical communities, we need more people to contribute their unique perspectives on the issues that they find most important.  Only then will we fully appreciate the importance of thoughtful and original communication in a digital world.

Our World: Ironic or Moronic?

For all the great advances that we have made in the world, whether it be progress in technology, evaluation of financial markets, social policy, and other areas of society, there are still some things that just boggle my mind. In some cases, these things are "ironic", in other cases, one could argue that they are "moronic". Here's a few thoughts to chew on - "Ironic" or "Moronic"?

• The Defunct Steel Mill: In a 90-day period engulfed with one of the most challenging currency environments in recent memory, AAPL (the most valuable company in the world) produced $75.9 billion in revenue, sold 74.8 million smartphones at $691 per-phone, generated the highest quarterly profit ever ($18.4 billion), minted $305 million per-day in operating cash flow...and is still valued as a "steel mill on its way out of business". My take: Moronic.
   
• You Can't Monetize Ubiquity: On the other hand, GOOG is lauded for its mobile operating system called Android (the most popular in the world by-far), but according to court testimony, the platform has ONLY generated $31 billion since its inception in 2008. Meanwhile, AAPL generated $175 billion from its smartphone business (phones + services) in its past fiscal year (FYE Sept-2015), and $58 billion in the last quarter (FQ Dec-2015). Hmmmm... My take: Both - Ironic that such a massive platform like Android brings in so little money (we all knew it was small - just not THAT small); Moronic that the market doesn't recognize that fact.
   
• Valuations: In the holiday quarter, AAPL reported a profit ($18.4 billion) that was 38x that of AMZN's reported profits ($482 million), yet AAPL trades at a Price-to-Earnings (P/E) multiple of 10.2, while AMZN trades at a P/E multiple of 427.9 (43x that of AAPL). So in short, AAPL generates 38x more profit than AMZN (Q4-15 was actually one of AMZN's most profitable quarters), yet is valued 43x less (on a valuation multiple basis).
  
  Who has the Monopoly?: So you can justify that by saying AMZN is a monopoly and reinvests all of its profits back in its business, right?  Well, it was reported in Nov-15 that AAPL captured 94% of the profits of the enormous smartphone market while only shipping 14.5% of the total volume. I don't think AMZN is capturing 94% of profits in any of its business segments and I would bet its market share far exceeds 14.5% in most of its core business lines.  Even true monopolies don't have 94% profit share! So even if AAPL loses profit share, its gross profit in terms of total dollars (a function of market share) still has some runway - even in the smaller market for premium handsets (>$500). My take: Moronic.
   
• Cable Service: I can get car service in 2-minutes with the touch of a screen, food delivered in 10 - 15 minutes with an app, yet if I need my cable fixed, I am told that a service technician will arrive anywhere between 8AM and 4PM. My take: Moronic.
   
• Let Me Pull a "Fast One" on You (Maybe): Taxi drivers still think the "cash-only, let me take you on a tour of the city" tactics are going to work with far-more sophisticated consumers that can simply use an app like Waze to tell them exactly how long it should take to get somewhere (traffic, accidents, etc. - all included in the estimate). My take: Moronic.
   
• Can You Explain it to a 10-Year Old? Business executives throw around terms like IoT, Blockchain, Exponentials & Big Data (just to name a few) like they're going out of style. But my guess is that 80% of them (conservatively-speaking) could not explain to a 10-year old what those terms mean, why they're important, how they're going to shape the future, and most importantly, how they'll leverage them for profit & shareholder value. My take: Ironic.
   
• A "Natural" Sponsor: Amgen was one of the original developers of a synthetic form of Erythropoietin, aka EPO, a hormone used to create a drug that stimulates red blood cell production to treat anemia. EPO became the Performance-Enhancing Drug (PED) of choice for endurance athletes - mainly cyclists and most notably, Lance Armstrong. Get this: Amgen has been the title sponsor for America's largest cycling race, the Amgen Tour of California, since its inaugural race in 2006. My take: Ironic.
   
• YHOO - 3 ironies:
  • YHOO owns a 16.3% stake (384 million shares) in China's BABA, equating to a "pre-tax" value of $27.2 billion; YHOO's market cap is about $28.4 billion, and it employs over 10,000 people. So essentially, the market is valuing YHOO (ex-BABA) and the work of its 10,000 employs at a mere $1.2 billion. My take: Moronic (if YHOO is merely a holding company for BABA stock, as the market appears to believe, why the need for 10,000 employees?)
     
  • YHOO bought a 40% stake in BABA in 2005 for just $1 billion - had it held on to that investment in-full, it would be worth approximately $66 billion today, about 132% more than the market currently values the entire company. My take: Neutral.
     
  • While many believe YHOO has mismanaged its own finances and strategy, its most lucrative platform is no other than Yahoo! Finance, which is said to command the highest ad prices of any of its other platforms. My take: Ironic.
     
• We Can Do Your Taxes, But Our Own...? H&R Block, the largest provider of consumer tax preparation services in the world, announced in 2006 that it had failed to correctly calculate its own state income taxes and owed over $30 million in back taxes. My take: Ironic.
   
• AAPL investments - 2 big-time divestitures:
  • Upon his return to AAPL, one of Jobs' first priorities was to stabilize the company. One way he did that was by securing a $150 million investment by MSFT in 1997 - in the form of non-voting preferred convertible stock. It was a paltry amount for the software giant and was seen by many as another tactic to keep anti-trust regulators off of MSFT's back (Keep AAPL alive - there's still competition!). Those shares eventually converted to common stock (253 million shares by most estimates - split-adjusted). Ballmer unloaded the entire position by 2003. Even at today's "depressed prices", that stake would be worth ~$24.3 billion - about 6% of MSFT's market value. My take: Moronic.
     
  • The 'silent' 3rd founder of AAPL, Ron Wayne, received a 10% equity stake in the company in April-1976, but sold it back for $800 less than two-weeks later. Today, a 10% stake in AAPL would be worth $52.2 billion. Today, that net worth would make him the 3rd wealthiest American today, and would far exceed the $19.1 billion that Jobs' estate is valued at (now controlled by his widow). After he left AAPL, Wayne was a stamp and coin dealer who never owned an AAPL product until he was gifted an iPad 2 in 2011. To his defense, nobody knew what AAPL would become in 1997, let alone 1976. My take: Neutral.
     
• "Naw, we'll pass": Blockbuster, the now-defunct movie rental retailer, was effectively 'disrupted' and bankrupted by a company (Netflix) that it was offered, and decided against, buying for $50 million in 2000. My take: Moronic.
   
• We Really Know Irregularities: Huron Consulting, a mid-size, publicly-traded consultancy borne out of the collapse of Andersen (related to Enron's 'creative accounting'), announced in 2009 that it had significant "accounting irregularities" requiring a restatement of 3-years of its financial statements - its stock dropped 70% upon the announcement. My take: Ironic.
   
• A Holy Sinful War: In college football, the rivalry between Utah and BYU is known as the "Holy War". In December-2015, the teams played the "Holy War" in Las Vegas (of all places). LOL. My take: Ironic.
   
• Ghost Dating: Investment bankers from 'prominent firms' used "ghost names and email addresses" to engage with other traders on popular finance blog sites, but used their corporate email addresses to register with Ashley Madison's "service". My take: Moronic.

The End of an Era - "Mamba Out"

Source: Getty Images

Kobe Bryant will play his last game on Wednesday.  It's hard to believe.  I still remember Kobe Bryant, the rookie who heaved up 3 air-balls as a rookie when the Lakers lost to the Jazz in the 1996 playoffs - a time when nobody else on the team wanted the responsibility or had the guts to take the last shot.

I still remember...

• the 1998 All Star Game at Madison Square Garden where Kobe faced off with Jordan in an epic dual where everybody (including other players in the game) became fans just like the rest of us.
   

• Game 7 of the 2000 Playoffs when the Lakers staged an epic comeback in the Western Conference Finals against the Portland Trailblazers, capped off by Kobe driving the lane and tossing up an alley-oop dunk to Shaq.
   

• Game 4 of the 2000 NBA Finals where an injured Kobe took over after Shaq had fouled out to put the Lakers up 3-1 in what would turn out to be the first championship of a three-peat.
   

• The 2001 playoffs where Kobe went of an absolute terror as the Lakers swept through the Portland Trailblazers, Sacramento Kings, and San Antonio Spurs to reach the NBA Finals, where they defeated the 76'ers 4-1 to cap a 15-1 playoff record.
   

• The poise Kobe showed in Game 7 of the 2002 Western Conference Finals where the Lakers went to Sacramento and won a pivotal overtime game - a true classic.
   

• The dismantlement of the Lakers following the 2003 NBA Western Conference Semi-Final defeat to the San Antonio Spurs, which started with the trading of Shaq to Miami.
   

• Kobe Bryant - the accused rapist who lost control of himself and found himself a universally disliked player and person around the league.
   

• Kobe hitting 2 near-impossible 3-pointers in the final game of the 2004 regular season against the Portland Trailblazers to secure the Lakers the #1 seed in the Western Conference playoffs.
   

• The 'lost' years when Kobe was disgruntled with the team's inability to put adequate talent around him to give him a chance at another championship run.
   

• The return of Phil Jackson to the Lakers - a move that Kobe would later candidly admit he was 'hesitant' about.
   

• The re-birth of the Lakers' championship form with the acquisition of Pau Gasol from the Memphis Grizzlies - the Lakers would go on to the NBA Finals, only to fall to Boston Celtics in 6 games.
   

• The two championships that the Lakers won in 2009 and 2010 with Kobe as true leader with Pau Gasol and Derek Fisher playing huge supporting roles.
   

• Kobe Bryant - the wise and mature player who gave his heart (and his body) to the Lakers in what will now be seen as the 'twilight years'.

Kobe Bryant is an amazing athlete - one of the greatest to ever play the game. Ever since he announced his plans for retirement, we have seen just how much he is loved both by his peers and by fans worldwide.  The cocky kid from Philly turned us off, but he ended up captivating us with an incredible work ethic and a true passion for one thing: winning.  Was Kobe Bryant the next Michael Jordan?  No. He didn't have to be and he wasn't.  Kobe has created his own legacy and just as with Jordan, we'll always be searching for the next Kobe Bryant.

Kobe Bryant entertained and he will be missed.

Employee Loyalty: Emphasize Growth Over Shiny Perks

Is the grass greener because it's better, or did you not take the time to water your side?

“Everyone talks about building a relationship with your customer. I think you build one with your employees first.”

— Angela Ahrendts, SVP - Apple Retail - Apple, Inc.

I started with my current firm right out of college on September 13, 2004 – 4,219 days ago, which makes me, well “ancient”. It is the only company I have ever known, but it is NOT the only job I have ever known – a very important distinction.  We live in a day-in-age where ‘loyalty’ is defined by anything longer than 3 years (so sad, but true).  Some call it a “generational” issue, others merely say that “professional growth” is inherently self-limited by staying in the same place too long – the idea that you reach a plateau if you are not consistently putting yourself in new situations with new people.

The fear of plateauing and the associated pay raises often more-than-offset the ‘tangible’ transition costs of moving jobs.  So it is no shock that the average Millennial with 10-years of work experience likely has had three-plus different employers.  Unfortunately for employers, employee churn is incredibly expensive – not only are there hard costs, but there are other costs (like culture) that are very relevant but can never actually be quantified no matter how cool the chart in the PowerPoint deck looks that gives you some ‘magical number’.  Culture is one of those intangibles that suffers the most within the ever-present ‘revolving-door’ of today’s workforce.

Let me be clear, the journey of my 4,219 days has not been all ‘rainbows and unicorns’.  There have been many times where I have questioned my own sanity for staying-the-course as I have watched a lot of incredibly talented colleagues and friends take their skills to the ‘greener’ side of the fence.

I subscribe to the idea of ‘FLEXIBILITY’ as a fundamental principle to build employee loyalty.  When I say ‘flexibility’, I am not referring to the ability to telecommute, unlimited PTO, or any of the work-life balance items that are table-stakes for many companies today and win you a spot on Fortune's Best Whatever List.  I am actually talking about flexibility in the context of encouraging, allowing, and supporting employees to explore new avenues without actually leaving.  Here are 4 examples of ‘flexibility’ that I believe have kept my 4,219-day clock ticking:

• The Value in Versatility: I have spent significant time working across at least 8 different market offerings – all 8 may have leveraged similar skill-sets, but they all provided exposure to different applications. I am a strong believer that the understanding of ways similar skill-sets can be leveraged to solve an array of vastly different problems is incredibly valuable.
   
• The Need to Prove Yourself Time-and-Again: I have switched groups 4 times now. With each change came the need to build new relationships, the challenge to prove myself to people who had no idea of my capabilities (or lack thereof), and the chance to find new mentors and champions to enhance my overall progression.  But when an employee transitions to a new group, it is upon him / her to bridge the connections - value is gained by increasing (not replacing) your internal network with each move.
   
• Paid Sabbatical...Say What? I was afforded the opportunity to take a paid sabbatical to help build a non-profit organization in 2010 / 2011. It was a once-in-a-lifetime opportunity to help build something that was meaningful to me without sacrificing my livelihood.  The best part of that experience was the ability to utilize skills and identify personal / professional weaknesses that I never would have found in my day job.  That is the value of sabbaticals - if you structure them with no accountability, they become 'boondoggles'.  Make people prove what they plan to do with a sabbatical is value-add to the person's professional progression, which inherently benefits the organization.  If you make things like sabbaticals structured with accountability, then people should never (as I wasn't) be penalized for embarking on what can be such a valuable experience.
   
• Exposure is Everything: Today, I am taking part in a 2-year rotational development program focused on a specific industry vertical. I have, once again, been put in a position of having to build new relationships and utilize skill-sets beyond the day-in / day-out of client-service.  It has been a great opportunity to see how the ‘sausage is made’, enabled a broader perspective of the entire organization and has helped me understand the dynamics of reaching the peak (or maybe more importantly, understanding the reasons why others top out at 'base camp').

I am not here to say I am the “poster-child” of loyalty, but I am here to tell you what has enabled my loyalty.  I believe that people leave organizations for many reasons, but I do not think money is the key driver of churn.  I think people leave organizations because they get bored and they find what appear to be better opportunities.  There is excitement in change and the grass ALWAYS looks greener on the other side.  However, as the old adage goes, make sure you are watering the grass on your side of the fence before jumping over it - a dual-sided challenge. 

So while Fortune touts "perks" as being the drivers of the best companies to work for.  I say that a better title for that list would be, "The best companies that get employees in the door".  That list is all about perks, which are not necessarily correlated with retention because they exist everywhere.  I say the better list is, "The best companies that keep employees in the door."  I have often said, "Don't ask me why I came...ask me why I stayed".  I am not devaluing Fortune's list - I am simply emphasizing that many of the items it points out are not drivers of loyalty.  If you ever take a look at large companies where the C-Suite is dominated by 20+ year veterans, you will find a couple themes: 1) The organizations have a strong culture of organic promotion where each member of the leadership team has spent time in multiple areas of the business; and, 2) They are not highly-ranked on Fortune's list.

Ultimately, both the employer and the employee need to commit to the idea of FLEXIBILITY through internal opportunities as a fundamental tool to empower loyalty and upward mobility.  The employee needs to look beyond the here-and-now to understand the opportunities that exist within his / her current organization which will help reconcile the value of the internal network (it's not just dollars and cents). On the flip-side, the employer needs to embrace a culture where new opportunities through internal movement create the growth opportunities that are vital to professional progression and elimination of self-limitation - these opportunities should not be advertised as ‘perks’ of the job, but essential enablers of growth - both for the individual and for the organization through the preservation of its core values through employee continuity.  

*Originally posted on LinkedIn here.

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**DISCLAIMER: The thoughts expressed in this post are strictly mine and do not represent the opinions of anybody but me.  The above should not be mistaken as career advice or anything more than an opinion. Please consult your career guru before making any drastic changes.  Additionally, if you have changed jobs every 2 years and have never regretted it - more power to you!   

Understanding FitBit's Missteps

On February 22nd, the wearable health and fitness-tracking device maker, Fitbit ($FIT) reported EPS of $0.35 on $712 million of revenue - easily topping consensus that expected EPS of $0.25 on $648 million of revenue.  However, the company's shares plunged 15% in after-hours trading after its Q1-2016 revenue guidance range of $420 million to $440 million fell short of the Street, which expected $484 million.  It now trades at just 20% above its all-time low, and 72% under its all-time high.

Fitbit - Defying the odds?

The popularity of $FIT's wearable trackers is a phenomenon in-and-of-itself.  At first glance, it appeared that $FIT was doomed when Apple ($AAPL) began shipping its new Watch wearable last April.  After all, $AAPL has grown to dominate profit-share in nearly every hardware category that it plays in, including smartphones, tablets, computers (both laptops and desktops) and now smartwatches.  The mistake that might have been made is assuming that $FIT's products would be subsumed by these more expensive smartwatches.  As the category continues to mature, smartwatches are proving to be much less focused on fitness, and much more focused on everything else (email / text / social media notifications, payments, airline boarding passes, etc.).

As the smartwatch category has begun to see the end of its infancy, there have been very few surprises.  Although $AAPL is not reporting unit sales of its watch, it is safe to say that it's by-far the most popular smartwatch on the planet.  But, what's interesting in the growth of this category is that $FIT has remained relevant and continues to be a very popular accessory even for people that are wearing an Apple Watch.  In the holiday quarter, $FIT shipped 8.2 million of its health and fitness wearables, up from 5.3 million in the year ago period (+55%).  That inherently creates an interesting dynamic as the company attempts to maintain its stellar growth trajectory.

What's Maintaining Fitbit's Pace?

If you actually talk to people that wear these $FIT devices, most of them will tell you something very interesting, and something I find truly unique in this wearable 'frenzy'.  They say that their $FIT bands are "motivators of activity" rather than just being "trackers of activity".  Meaning, $FIT wearers will actually adjust their behavior based on the number of steps that they've accrued throughout the day.  If wearers are lagging in steps, they might take the stairs instead of the elevator, or they might walk somewhere where they normally would have driven or 'hailed' a ride.  The fact that $FIT devices are able to dictate behavior (as opposed to just measuring it) is something that very few wearable trackers have been able to achieve.  I would argue it might be the only wearable that actually drives user behavior when it comes to physical activity.  Sure, the Apple Watch may give you a tap to stand-up every 50-minutes, but I have found very few people who see it as a fitness device.

Additionally, $FIT has incorporated 'gamification' into its companion app where wearers can join groups of friends, colleagues, or the-like to compete on overall physical activity (as measured in steps).  Gamification is not a new concept in wearables, the now-defunct Nike ($NKE) Fuelband and Jawbone Up all had / have some form of gamification embedded in their products. But unlike $NKE and Jawbone, $FIT has succeeded in making gamification a core part of the experience, which is also part of its unique behavior-driving appeal.

So What's the Problem?

Based on Fitbit's full-year 2016 outlook, which includes a mid-point revenue guide of $2.45B, it appears that the company is running into a similar problem as $GPRO - once you have one, there's little need to buy another as the functionality is not improving enough to warrant a replacement purchase.  The decelerating revenue is dramatic, going from nearly 150% growth in 2015, to a projected 32% for 2016:

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So while Fitbit might be succeeding with its low-end trackers and associated user-engagement, its revenue growth strategy is akin to restaurants - "menu expansion" (as shown in the picture below).  In its 8-K filing for its FY15 results, the company said it would be incurring additional expenses as it continues the roll out of two of its new products in Q1-2016: 1) Alta - a Fitbit tracker with a more fashion-focused appearance ($129.99) and, 2) Blaze - a smartwatch with additional functionality such as a heart rate tracker and connected GPS ($199.99):

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Source: Fitbit.com

The problem that $FIT will likely run into with these new products is two-fold.  With regards to Alta, the fashion appeal falls short of the critical standard of, "is this reason-enough to buy another Fitbit tracker at a $30 premium?". As for the Blaze, it is now attempting to compete with the dominant player in the space - Apple Watch, especially as $AAPL lowered the entry-level price for its Sport Watch to $299 (38mm) and $349 (42mm) on March 21st.  Unfortunately for $FIT, while the Blaze may carry the novel step-tracker of its predecessors, it falls well short of the Apple Watch when it comes to overall functionality which is enabled by $AAPL's phenomenal app ecosystem - it's the very reason you see many people wearing an Apple Watch on one wrist and a $FIT band (likely the Flex) on the other.

$FIT would likely be well-served by focusing on improving the functionality by expanding the capabilities of the very product that made the company (its Flex bands).  That focus would enable the company to help answer the one question that nearly every company in niche technology hardware is struggling with ($GPRO, Nest, etc.) - how can I get my user base to upgrade their devices?

The GoPro Problem

GoPro announced its Q4-2015 and full-year 2015 results on Feb-3, and the corresponding data was not pretty. GoPro announced revenues of $1.6 Billion and Net Income of $179.3 Million, which represented growth of 16.2% and 40.0%, respectively - a drastic deceleration on both measures.  But perhaps the most troubling data was the Q4-2015 results - Like most consumer electronics companies, the 4th quarter should be its strongest due to the holiday season. For its Q4-2015 quarter, GoPro reported revenue of $436.6 Million and a Net Loss of $41.3M, representing contraction of 31.1% and 133.8%, respectively, compared to the Q4-2014 quarter:

Source: GoPro's SEC Filings

So what happened in Q4-2015? Here is what the company said in its press release:

• "...growth slowed in the second half of the year and we recognize the need to develop software solutions that make it easier for our customers to offload, access and edit their GoPro content." [Emphasis added]
   

• "Fourth quarter revenue includes a $21 million reduction for price protection related charges resulting from the HERO4 Session repricing in December. Full year revenue also reflected charges of approximately $40 million for price protection related charges issued in connection with reductions of the HERO4 Session selling price in September and December." [Emphasis added]
   

• "Fourth quarter and full year non-GAAP gross margin was impacted by a charge of approximately $57 million to cost of revenue for excess purchase order commitments, excess inventory and obsolete tooling resulting from the Company's decision to discontinue production of the HERO cameras. This charge is greater than the $30 million to $35 million that was previously estimated in our announcement of preliminary fourth quarter results on January 13, 2016 due to our subsequent decision to simplify GoPro's product offering to consist of HERO4 Black, HERO4 Silver, and HERO4 Session." [Emphasis added]

As a result, GoPro's stock closed near its 52-week low at $9.78 on February 4th (the trading day following the announcement of its results). In August-2015, the company's stock traded all the way up to $64.74, representing a loss of 85% in a span of about 6-months.

My Take:

• Demand has slowed dramatically: The numbers show that demand has slowed dramatically, but the commentary really validates it.  When companies use terms like "price protection", "excess purchase order commitments" and "excess inventory", it means that 1) Retailers cannot sell the products they currently have in the channel and their agreements with GoPro allow them to move them at a reduced prices and recover the difference from GoPro, and 2) "Excess Purchase Order Commitments" and "Excess Demand" means that they cannot move current product or product already being manufactured either through direct channels (e.g., GoPro's online store) or its distribution channel (3rd party retailers).
   

• GoPro's are like iPad but worse: The steep demand fall for GoPro's products reminds me of the slowdown in the growth of AAPL's iPad, but I actually think its worse, as the GoPro is much more of a niche product. The iPad has proven to have a much longer upgrade cycle than previously thought, thus its growth has contracted after shooting out of the gates in 2010. I don't even know if a GoPro has an upgrade cycle. The company's entry-level HERO4 Session is $199.99 (not exactly cheap) and shoots 1080P at 60fps. Its highest-end model, the HERO4 Black is $499.99 and shoots 4K video. So like the iPad, once you have one of these devices, what's going to incite you to upgrade? At least with the iPad, there is a software component (iOS) with annual upgrade features that are only available on the latest models (e.g., TouchID, Split-Screen mode, etc.) GoPro cameras are also like iPads in the sense that people are far more likely to share them, thus reducing the need to buy multiple devices within a household.
   

• GoPro is a pure hardware company: The Company's remarks about the need to develop a software component to pair with its hardware goes to show it has no ecosystem. My guess is that people are uploading most of their content to popular platforms like YouTube, Vimeo, or even embedding their footage directly into their websites, etc. At this point, I'm not sure that they could even create an integrated product (hardware + differentiated software) that would change its results - meaning, I don't think GoPro having a software component would incite people who weren't thinking of buying a GoPro to go out and buy one, nor do I think they could monetize the software.
   

• Smartphone cameras are good enough: The latest cameras being introduced on smartphones are good enough for the average consumer - Both the iPhone 6S and iPhone 6S+ shoot 4K video and both have a 12MP shooter. Other offerings from the likes of Samsung and LG have the same capability. So unless you're a hardcore snowboarder, skier, skydiver or surfer, the use-case for a GoPro over a smartphone is marginal at-best. Additionally, products like the iPhone are already tied to a software ecosystem that makes editing and sharing of pictures and video media much more seamless - you can send media (including photos and videos) over iMessage (an SMS platform) up to 100MB in size. You can also share media over the iCloud platform with other iOS users.

GoPro was supposed to be the next-gen Flip cam that actually proved to be a sustainable business - Cisco bought Pure Digital for $590 million in 2009 for its Flip cam product line, only to shut it down two-years later in 2011. What people don't fully grasp is that the Flip cam actually gained pretty good market penetration, becoming the #1 best-selling camcorder on Amazon and obtaining 35% of the total camcorder market.

So why did Cisco shut it down? Some would say that it was because the company wanted to focus on enterprise solutions rather than consumer hardware, but most believe they knew the product was doomed by the rise of smartphones - at the time that the product was shut down, the iPhone 4 was already out. Well, if that's true, fast-forward four-and-a-half years - smartphones are ubiquitous, the cameras have improved dramatically (both for photos and video), and they all have some form of software embedded in them.

GoPro has had the benefit of amazing branding - something that the Flip cam never had, yet it faces the same challenges that Cisco faced with the Flip cam in 2011. I think an acquisition may be the only way out at this point. But who might be interested? 

• Google (or Alphabet) - Maybe. Google has shown a desire to build out, or buy hardware platforms (e.g., Nest and Dropcam via Nest acquisition) to supplement all of its software and internet products. Another interesting piece about Google is the fact that they own YouTube. There could be a natural synergy to create an ecosystem between GoPro's hardware and YouTube's content distribution platform.
   

• AAPL - Highly unlikely. AAPL tends to be an 'integrated buyer', meaning they buy companies that can be integrated to improve their current products (e.g., PA Semi was used to help develop its own smartphone SoCs, and AuthenTec was used to develop TouchID). I believe its Beats acquisition was a one-off exception and even that company is slowly being more integrated into AAPL's current hardware and software.
   

• MSFT - Maybe. MSFT could be a buyer as they continue their foray into hardware (e.g., Surface lineup, MSFT Band fitness trackers, and long-standing XBox products). But when you compare MSFT and Google, it's seems like a 'no-brainer' that Google would have a much more strategic use for the company.
   

• AMZN - Not a chance. AMZN seems content in building sub-par hardware that is just 'good enough' that can be sold at break-even prices, or even losses, to help drive its other businesses.

Whoever might be 'kicking the tires' on GoPro needs what the company doesn't have - a software solution and content distribution platform to create an ecosystem out of its hardware..

No 'Room' for Corporate Culture

There has been a trend in Corporate America that is understandable in one sense, and somewhat troubling in another - the reduction of corporate real estate footprints. Nearly every major company is looking to reduce costs right now - it's just the name of the game, reduce costs to boost profits - it's not rocket science. As a result, companies are reducing both the number of real estate leases that they hold, and shrinking the size of their current leases (6 floors go to 4; 4 floors go to 2, etc.).  Fair enough.  I guess that's just called 'enterprise cost reduction'.

But on the other hand, companies are wondering why it's so tough to create a little thing called 'culture' these days - that glue that builds loyalty - the things that make people think twice about taking that other job for a 10% raise. So what's the connection here?  As companies reduce their corporate real estate footprints, they are moving to more open-space communal offices where people "hotel", nobody has designated offices, and you feel exactly what the term "hotel" represents - transient. Employees are nothing more than nomadic dwellers who search daily for a decent workstation where they can take calls without disturbing others, have access to confidential files, and feel like they actually 'belong' to something.

It has gotten to the point of "why bother coming in anymore? - I don't see anyone I know. Nobody knows who I am. Nobody cares if I'm even here. It's far more convenient to work from home."  That's the troubling part - nobody feels like they belong anymore - it's far easier to leave something when there is no sense of belonging - office culture was one of the lasting strings that kept that sense of belonging alive. It's leaving corporate America along with the small semblance of loyalty that still existed with a Millennial generation that everybody believes to be so fickle anyways.

I'm not in charge of a P&L and therefore I can't tell you how significant the savings are that are derived from reducing a company's corporate real estate footprint...but what I can tell you is that it's not a dollar-for-dollar savings. There is an offset to those savings - a loss of culture and belonging. At some point, you have to wonder if you're shaving fat or just cutting into muscle.

...And WeWork is laughing all the way to the bank.

The Enduring Legacy of the B-757

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As major airlines are in the midst of one of the largest fleet modernization programs in history, the B-757 continues to be a very popular aircraft even with the delivery of brand new planes to service similar routes.  The 757 was in production from 1981 to 2004, with approximately 1,000 deliveries over that time period.  The plane was designed with two variants - the 200 and 300 models (max capacities of 240 and 290 people in one-class configurations, respectively).  The 200 model also had two variants (the SF and PF), which were both designed as cargo-only planes.  

A Massive Power Plant:

The general longevity of these aircraft is likely hidden right below the wings.  The 757 was outfitted with either a set of P&W-2037 or RR-RB211 engines.  The P&W variant is slightly less powerful than the RR version, putting out roughly 38,400lbs of maximum thrust.  The RR version has a maximum thrust output of a whopping 40,100lbs.  In any case, both engine variants make the 757 the most powerful commercial aircraft in the world, in terms of power-to-weight ratio.  It has been rumored that a fully-loaded 757-200 (cargo, passengers, and fuel) can take off with less than 5,000 feet of runway.  This is quite remarkable when compared to a B-777-200ER, which at full-capacity, needs approximately 8,000 feet of runway - about 60% more asphalt than the 757.

Due to its power, the 757 rarely (if ever) uses the engines' full capacity - leading to greater fuel efficiency and less maintenance.  Additionally, whereas other aircraft like the 737 can be grounded by hot weather and weight restrictions, the 757 does not face any such constraints based on its ability to climb off the runway like a rocket-ship (literally). 

Additionally, the range of the 757 also contributes to its unique value to a fleet with the 200 variant maxing out at a range of 3,900 nautical miles, which converts to approximately 4,500 miles.  This range makes it one of the only non wide-body commercial aircraft capable of transatlantic flights. Although after a flight from New York to Ireland on a 757 in coach, I will be the first to say that it's not a comfortable experience.  

The 757 is still going strong 32 years after the first deliveries were made.  It continues to be a mainstay within the fleets of all of the major U.S. airlines.  The unique engineering and design decisions have brought a greater appreciation to this iconic aircraft.