Seeking Alpha has a post about Apple’s business, in general, which contains this nugget about their accounting practices when it comes to iPhone sales:
Unlike other cell-phone manufacturers that book 100% of the revenue from each phone sold within the quarter the sale occurs, Apple amortizes the revenue over eight [8] quarters, 2 years! Apple’s thesis is to match iPhone revenue with the standard 2 year service contract. This accounting is very conservative, as mentioned, but think about it: iPhone sales reported within any quarter actually represent only 1/8 (12.5%) of the total sales. This means there exists an increasing chunk of revenues yet to report. If accounted for under GAAP, Apple’s revenues and earnings from the iPhone would be higher, much higher…
Make of it what you will, but we could be seeing some monster earnings numbers from Apple later this year and into next.
MBA Uncategorized
I first heard of the Tragedy of the Commons in my high school economics class. The classic example of this concept is an open field where animals, say sheep, are free to graze. Because it’s free, all the shepherds bring their sheep to the common plot of land and, consequently, leave it completely destroyed and useless by overusing it. Their rational behavior of using the free land harms others and, ultimately, themselves. Ideally, to maximize the total use of the land, there should be a limit on how many sheep can graze on it. To limit the degradation of public (often environmental) resources, governments impose all sorts of restrictions, taxes, licensing requirements, and the like. The moral of the story here is that if you have a free common resource, people will abuse it to the point at which it provides next to no value to everyone.
Now, several people, most famously Lawrence Lessig, have compared the Internet to a commons, often in the name of fighting proposed restrictions like net neutrality. But, is it really possible to have a commons without a tragedy? At least when it comes to the Internet, I’m not sure. Imagine that the Internet is that pasture of land I just mentioned, and every time a site goes up, it is consuming precious resources and making the whole Internet less valuable. Is that not exactly what’s happened? Not only is there more crap—more useless crap—online than ever before, but the Internet has become less valuable to site owners. That is, there’s so much ad inventory out there, that it’s pretty much impossible to monetize a site with ad revenue these days. And it’s only getting worse right now. So, before you start that website, just remember that you are overfishing our oceans and destroying our pastures and polluting our air and creating acid rain and ruining our eyes and bankrupting the valuable websites that you love. So, please, please, I beg you: Stop.
MBA Economics, Uncategorized free culture, internet, tragedy of the commons
Earlier this week, I wrote about Twitter’s inability to articulate a value proposition to its potential users and my disagreement with the marketers who believe that inability is a fatal flaw. Well, I guess that raising a $35 million C round with a post-money valuation of $225-$250 million isn’t the sort of thing that’s possible when you can’t communicate a value proposition. Wait, hold on. That’s what Twitter just did, raising $21 million from Benchmark and $14 million from IVP. If it was 1988, I would tell the marketers that they just got ‘moted. Oh. Shit.
MBA Marketing Benchmark Capital, funding, IVP, marketing idiots, Twitter, venture capital
In a recent class, the professor announced that what he was teaching would allow us to “make more money than you ever thought possible, destroy your personal life, seek refuge in academia, and sit in your office and cry every day. Wait, that’s what happened to me.”
MBA Uncategorized self-destruction resulting from money resulting from MBA
Students and academics have employed statistical analysis to prove or disprove authorship in several cases, with Shakespeare’s possible works being a common mark. However, in this case, a literary critic refuted the claim, by a statistician, that Shakespeare authored “A Funeral Elegy.” Score one for subjectivity!
For some additional reading on the subject, click here.
MBA Uncategorized authorship, literary analysis, shakespeare, statistics
During my study of game theory in business school, the professor gave an example of a game in which the equilibrium should produce independent, randomized choices by all players: penalty kicks in soccer. Strikers should kick the ball to a random location in the goal and goalies should dive in a random direction.
If you simplify the game, you could say that there are three locations in the goal—left, center, and right—and each player should choose them with equal probabilities of one third. However, while strikers do this, goalies don’t. Goalies are more likely to dive right or left than to stay put in the middle. Call it the negative consequences of having a bias to action, or think of it like playing rock-paper-scissors and always picking rock.
MBA Uncategorized football, game theory, goalies, Nash Equilibrium, penalty kicks, soccer
Here’s what I would do I had a second-rate application on my hands: market it as a niche product specifically for the education market, set a high price tag, hire some people with educational sales experience and sell the hell out of it. Most schools don’t like dealing with technology and love out of the box solutions that will suggest to students that they’re wired, they get it, they are educating in the 21st century, dammit! And they’ll pay a lot to make those statements, either by selling out their students to the branding of a product like Google Docs or by paying an insane amount of money for awful applications like Blackboard. Unless you’ve been a student or professor during the past few years, you’re probably not familiar with this software. Consider yourself lucky. However, somehow schools pay tens of thousands of dollar each to license it. Blackboard contains the functionality of a website circa 1998, but it’s scalable and doesn’t require schools or faculty to know much of anything about the web. IT managers should be fired for purchasing it.
MBA Uncategorized
From case studies I’ve read, both Southwest Airlines and Northwest Security Services will frown upon you with your MBA. Do you think the no-MBA hiring policy will become more widespread after the havoc that MBAs have wreaked on our economy? Do you know of other companies with such policies? PayPal used to have a no-former-consultants policy. Comment away!
MBA Uncategorized anti-mba, consulting, hiring, jobs, MBA
Group work is a staple of an MBA’s life. Conference rooms designated as “group study rooms” are often booked weeks in advance from 7 in the morning until 12 at night. The rules for qualifying as a “group” are posted in and outside of each room.
- You must arrive within 15 minutes of your meeting’s scheduled start time or else you forfeit the room.
- “Groups” consist of four or more people. Hey! Those guys only have three people in that room! Let’s kick them out! Swarm! Swarm! Swarm!
- Meetings will never end early.
Okay, so that last point isn’t really posted, but that doesn’t mean it’s not true. And the reason it’s true is because groups are likely to debate meaningless points ad infinitum, as the Latin phrase goes. You would think that these people have nothing better to do than to discuss whether they need to include, in a case report about eBay, the fact that Beanie Baby sales were popular among the site’s early users. Yes or no. Mention it or don’t. I don’t care, but I do care that this is a waste of your time, which should be more valuable, and my time, which is more valuable. I like playing on teams well enough, but this is like playing on a basketball team where no one will shoot the ball. So, if you’re visiting a business school and in the part of the tour where they take you to the “group study room” area, just remember that the future MBAs in those soundproof rooms are not debating high strategy, global politics, economic theory, or even the best way to run a business. They’re arguing about Beanie Babies.
MBA Uncategorized beanie babies, ebay, group work
One of my professors seized on the start-up’s inability to articulate a clear value proposition to its users. I don’t believe that it matters, but apparently he did because I’m now going to fail the class. Twitter isn’t so much a service with a specific value proposition as it is a platform for all sorts of services. It is a way to search what people are saying right now. It is a way to communicate and converse with a group of people using your phone. It is way for companies to share information with their employees easily in real time. Yes, it’s a microblogging service too.
I’m not a particularly huge fan of Twitter and don’t derive much value from it, but I think I’m on the wrong side of the fence on this issue. But at least I’m closer to the fence than my professor. “Value proposition” and similar terms are the exact thing that made me cringe when I considered going to business school. Now that I’m in business school, they make me want to vomit. They’re often irrelevant in the way that businesses conceive of products to reach potential audiences, especially in the world of web 2.0 with modular applications and platforms. Quite simply, if users find something valuable, they’ll pay for it with time or money, if not both. Will people pay for Twitter? We’ll see. Whether its owners can articulate the reason is beside the point.
MBA BS Marketing, stupidity, Twitter, value propositions
Someone at the University of Hawaii posted this Harvard Business paper online. It says “DO NOT COPY” all over it, but is still totally readable and will save you a valuable $6.95. Also, unlike the version you would buy from Harvard, this version doesn’t expire in six months. (Unfortunately, the “DO NOTE COPY” watermark doesn’t expire either.)
MBA Uncategorized business plans, Harvard, HBS
You could buy this case from the Harvard Business website for $6.95, or you could just download it here DRM-free from Stanford’s site.
MBA Uncategorized Case Studies, GSB, HBS, Stanford
Really, that’s what my professor told the class: you go after them with baseball bats. Beforehand, however, you must become allies with the local police, who will then guard your home from retaliation.
Other methods for busting the union involve inciting a strike and then hiring enough scabs to have the union decertified, bankrupting one of your subsidiaries–which allows a judge to void your collective bargaining agreement–or, finally, going offshore.
In preparation for a strike, it’s important to be near rails, where you can transport goods during a trucker’s strike. Another transportation method is to use non-unionized, private trucking companies. They are very expensive, and your striking union workers will likely slash their tires. However, the private truckers often carry guns.
That’s all from one class.
MBA BS baseball bats, scabs, strikes, unionization, unions