My experience with the Thin Blue Line

Preface: Obviously my experience is nowhere in the same league as those we saw this week., but I think it illustrates some of the problems that lead us to where we are.

A couple of years ago, I was at Katz Delicatessen in NYC with my brothers. They use a bizarre ticket system. When you go in, you are handed a ticket. They write the items you order on your ticket. At exit, they use the ticket to total up your tab.

I ordered roughly $10 worth of food. I managed to misplace my ticket before I headed to the exit.

They had a sign in fine print at the entrance that if you misplaced your ticket, you had to pay something like $50. (Which would be really hard to spend there.) I consider this a contract of adhesion, because no one would reasonably expect that kind of requirement in a restaurant.

They refused to let me leave and physically blocked the door. A large man physically restrained me as I tried to exit. I considered this assault and called 911, saying that I was being unlawfully imprisoned. (Which I was.)

The staff laughed. “We do this all the time, the cops won’t do anything.” They were confident.

Before the 911-dispatched officers arrived, the staff managed to flag down the beat cops in the neighborhood. The cops gave me the same story.

I explained my rights. Clearly, one of the cops understood that I was right. But he wasn’t going to say so in front of his partner. I insisted they call a supervisor. When they got someone on the radio, they confirmed my rights. At best, Katz could only file a civil case against me for $50. I hadn’t committed any crime.

Three issues here:

  1. The beat cops were basically in the pocket of Katz and defaulted to what Katz wanted.
  2. At least one of them didn’t understand the basics of the law.
  3. The one who did refused to say anything.

I should note that I doubt I would have done any of this if I were African American or in a non-public place.

We see such intransigence among law enforcement and others with authority all the time.

Cops generally refuse to stand up against other cops.

The TSA will refuse to acknowledge when their agents step over the line.

Airlines almost never apologize when their flight crews clearly discriminate against people of color by refusing to let them fly. (I have been pulled off aircraft twice; fortunately, in both cases, I was able to re-board.)

To the extent that there is ever anything close to an apology or recognition of wrong doing, it is blamed on bad “apples.” How are we going to root out bad apples if the ones closest to them won’t say anything?

 

 

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The largest American brewer is…

4701890202_c319f91692_oThis is a quadruple trick question.

The first trick: Many people who don’t know the depths of globalization today would say Miller or Bud. Although Budweiser brewer Anheuser-Busch was a long-term St. Louis based company, it is now part of Dutch conglomerate AB InBev. Miller, though started in Milwaukee, is now owned by SABMiller, which started in South Africa and now has its headquarters in London. Miller products in the U.S. are actually marketed by a joint partnership between SABMiller and mostly Canadian MolsonCoors. Now, AB InBev and SABMiller are in the process of merging, subject to regulatory approval in the United States, China and South Africa. Despite this summer’s gag-inducing gimmick of calling Budweiser “America,” it isn’t an American company anymore.

The second trick: It depends on how you measure it. As I always tell people, the best answer to most complex questions is “it depends.” In this case, it depends on whether you measure volume or valuation. If you measure by volume, it would be California-based Pabst. If you measure by value of the company, it would be Boston Beer Company, brewer of Sam Adams. It turns out swill isn’t as highly valued as Sam. Boston Beer Company is publicly traded and worth about $2 billion. Pabst is owned by private equity and worth roughly $700 million.

The third trick: If you accept that Pabst is the top American brewer, then the new president can drink any of its brands. So instead of there being one beer label, she can choose among: Pabst Blue Ribbon, Schlitz, Ballantine IPA, Old Milwaukee, Lone Star, Rainier, Olympia, National Bohemian, Old Style, Primo, Stroh’s, Stag, Schaefer, Schmidt’s, Pearl, Blatz, McSorley’s, St. Ides, Champale, Colt 45.

The fourth trick: Pabst is contract-brewed by MillerCoors.

So my best answer is any of the Pabst brands. Or, if you want to be a stickler about MillerCoors, she can drink Sam Adams. (Which sounds like a better fit for D.C. anyways.)

Do you have a better answer? Let me know.

 

 

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Link baiters need to read this before they lose their shirts

The Internet gives people the ability to express themselves however they want.

But it doesn’t allow them to talk with impunity. If you publish misleading or inaccurate information about someone, they can sue you.

Here are the key terms you need to know and some examples of what might constitute defamation. I am not a lawyer and this is not legal advice. As with any lawsuit, the outcome will depend on interpretation by lawyers, judges and juries.

“public figure” – Someone who is famous. If you’re a celebrity, elected official or someone in a position of significant authority, you are likely a public figure. In the tech world, Larry Page and Mark Zuckerberg would be considered public figures. A CEO of a 5-person startup wouldn’t be. (Unless they are a public figure for some other reason.)

“limited purpose public figure” – Someone who is an expert or influencer on a specific topic and has chosen to engage in public discourse. But they are only a public figure for purposes of the topic area.

“private figure” – Someone who isn’t one of the above. This would be most people. Despite the fact that I’ve appeared on TV a lot and in print and other outlets, someone like me would be considered a private figure.

“negligence” – You were careless or acted recklessly. You didn’t exercise proper care.

“actual malice” – You knew what you were publishing was wrong and did it anyway. Or, you didn’t really care to check if it was true.

The standards are different for public figures and private figures. For a public figure to be successful, they need to prove actual malice. For a private figure to be successful, they need only prove negligence.

The public figure vs. private figure distinction applies to the person who the claim is being made about, not the person making the claim. From a legal standpoint, there is no difference in me making a statement about someone and Anderson Cooper making that statement. In practice, there is. And smart targets will understand the Streisand effect.

Truth is an absolute defense to defamation claims. If you publish something accurate that someone doesn’t like, that’s not defamation. You can, of course, be sued for it. Which is the real danger. The wealthy can bleed the pockets of the less wealthy. Do that enough (or threaten to do this) and people will be less likely to criticize you. This is the Donald Trump strategy.

Opinions are not libelous. Defamation relates to facts. A negative opinion is not defamation. It isn’t nice, but feel free to call anyone a jackass, douchebag, asshole, fucktard or similar terms  without worrying about defamation.

This post is about defamation in the United States. Our system is very different from other parts of the world. In the UK, for example, the publisher has to prove the truth of a statement. In the US, the subject has to prove that the statement is false. Sometimes, this can discourage suits in the US. For example, if I were to say Acme Corp has revenues of $5,000 instead of the $50 million they claim., if their revenues are only $5 million, they likely wouldn’t want to challenge my statement in court because they’d have to release the $5 million figure.

Some made up examples to illustrate the concepts:

Sergey Brin is an ineffective manager.

Not defamation because it is an opinion.  Sergey Brin is also a public figure.

Carly Fiorina was fired from HP.

Not defamation because she is a public figure and it doesn’t meet the standard of actual malice. Also, truth.

John Doe was fired from his job.

John Doe is a private figure. But if he was fired from his job, it’s not defamation, even though it might be embarrassing. If he weren’t fired, it is defamation. But it’s up to him to prove that he wasn’t fired.

John Doe is an asshole. 

Not defamation because it is an opinion.

John Doe is an asshole because he strangles chickens.

If John Doe actually strangles chickens, this is not defamatory because it is true. If he doesn’t strangle chickens, it is defamatory.

Donald Trump is a racist, xenophobic, misogynist.

Not defamation because it is an opinion. Trumps is also a public figure.

Donald Trump is only worth $1 billion, not the $10 billion he claims.

Trump is a public figure. To be successful in this claim, he would have to prove to be worth more than $1 billion. If he’s worth $3 billion, he wouldn’t want to bring this claim because he’d have to show that he is only worth $3 billion. That would make him a liar on one of his key talking points.

Donald Trump is the son of an orangutan from the Brooklyn Zoo.

This is a famous bit from Bill Maher. Trump is obviously a public figure. Despite not showing his long-form birth certificate, he is not the son of an orangutan from the Brooklyn Zoo. But this likely falls under parody because no one would reasonably believe that he is the son of an orangutan.

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Five mistakes that product managers make

  1. Assuming that they are the market. Unless you’re designing a product for affluent people who work in tech in the Bay Area and use 27″ screens with the latest hardware, chances are that your product will not work in the mass market. For most people, technology is a means, not an end. They don’t care about how things are done, just that they are done. Google’s failures with Buzz, Wave and Google+ are great examples of this. They tested well among Google’s employees, but failed in the marketplace.
  2. Assuming that San Francisco is the market. Again, you’re targeting an affluent market that is willing to try just about anything. There’s also density that enables a lot of business models that won’t work in the suburbs or exurbs. If it works in San Francisco, that just means it works in San Francisco. Will your product work in a red state? That’s one of the keys to making a great business. Get out of the city and try doing market research in Minneapolis or Austin. Nextdoor is a great example of success — when I talk to my friends in St. Paul, they love the product.
  3. Assuming that users will make big changes quickly. The mainstream customer can take months or years to adopt a new product. Take Twitter. It was founded in 2006 and it’s still struggling to find Product Market Fit among normals. Fortunately for Twitter, the media has had an ongoing love affair with the product and it gets billions in free media. Unfortunately for Twitter investors, all of that free media exposure doesn’t translate into the number of users and revenue that Facebook generates. I used to call Twitter “the command line interface for communications.” It’s gotten much better, but it’s still complex. Complex products will take longer to gain adoption than easy-to-grok products like Snapchat and Instagram.
  4. Assuming that rules and regulations won’t change. Uber and Airbnb are the best examples of this. Build a product that people love and eventually laws will get changed. They’ll change faster if you get involved in the legislative process instead of just viewing politicians as out-of-touch people who “don’t get it.” It’s your job to educate the them. Uber and Airbnb have been masterful in government relations and political campaigning.
  5. Failing to taking into account Moore’s Law. Technology gets cheaper, better and faster. This happens at a rapid pace. Especially when it comes to designing hardware products, this is key. The goal is to optimize over the product lifecycle, not necessarily the initial product costs. Products like XBox assume an initial loss on hardware that gets made up with software and declining BOM.
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Things Apple slammed before implementing them

  • Two-button mice
  • Multitasking phone
  • Third-party apps (App Store)
  • Small tablets (iPad mini)
  • Streaming music services (Apple Music)
  • Third-party keyboards (iOS 8)
  • NFC (Apple Pay)
  • Styli (Apple Pencil)

Have more? Tweet them to @rakeshlobster.

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If you’re going to own individual stocks, own these three

A friend asked me about investments recently after moving jobs. My recommendation was to invest all her retirement assets into a target date fund and avoid individual stocks.

But she wanted to feel like she was playing in the market and passive investing through mutual funds didn’t satisfy that craving.

These are the three stocks I recommended to her:

  • Apple. Yes, it’s the world’s most valuable company. Yes, it’s huge. But it can come up with hit after hit. It has a loyal fan base. Even in light of low-priced competition from Android handsets, Apple has remained resilient for years. It has eco-system lock in. If you’ve bought one Apple product, you’re likely to buy more Apple products.
  • Facebook. The company has almost (see below) unparalleled lock in. International growth will continue. More importantly, the company stands to benefit from maturation of ad systems in international markets. The company also has largely untapped opportunities in payments and video.
  • Google. It’s the best advertising engine to date. Google has diversified into many product lines. Yes, the bulk of the money is in search. But it has a strong product position in other spaces.

All of these companies have the flexibility to think for the long term, instead of chasing earnings quarters. They have strong CEOs who aren’t going anywhere.

This doesn’t mean that you won’t lose money over the short term. There will be short term volatility, as is the case with all stocks in the age of the Internet and high-frequency trading.

But if you buy small chunks over time and focus on the long term, you should do well.

Again, this should only be done with play money for the feeling that you want to trade stocks. The bulk of your assets should be in diversified mutual funds or exchange-traded funds.

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Rakesh’s quick guide to investing for the lay person

A friend asked me to take a look at her IRA with Chase. I couldn’t believe how horrible the products she was sold were. Here is some quick info to help you make better investment decisions.

If your IRA is managed by Chase, MorganStanley, Merrill Lynch or similar, there is a 99% chance you are being hosed. Try Betterment or Wealthfront.

If you still think that you should keep your money where it is, here’s some more advice:

  • If your adviser tells you he’s going to trade individual stocks, RUN!!!
  • When investing in mutual funds, ask your adviser what the front end load is. If the answer is >0, RUN!!!
  • When investing in a specific fund, ask your adviser what the expense ratio is. If the answer is >1.5%, RUN!!!
  • Ask if there are any fee waivers in place. Often mutual funds will offer a promotional rate to lure in money. Your “regular” price can be much higher.
  • If investing in a S&P 500 Index fund, ask what the expense ratio is. If the answer is >0.10%, RUN!!!

Some funds also have a short-term redemption fee. Don’t worry about this; you shouldn’t be doing short-term trading.

The generic advice I give to most people is:

  • Don’t bother with individual stocks. They are too risky and require too much maintenance. If you think a certain sector is going to be hot (e.g. healthcare), buy a sector-specific fund instead of individual stocks.
  • For retirement, pick a target date retirement fund. These usually have a year in them, e.g. 2030, 2040, 2050. Pick the date that you expect to retire. Put ALL of your retirement money in that fund. Get one of these funds from Vanguard or Fidelity.
  • For non-retirement assets, invest in Betterment or Wealthfront. They give you a diversified portfolio at low management rates.

I was inspired to write this by my friend who was sold funds with a 4.5% front end load and expense ratio of 1.3% something. (Temporarily waived to .96%.)

For those of you who’ve followed me and think, “that’s not what you do.” “Didn’t you make a pile of money shorting Groupon and buying options?”: you’re right. But I have specific expertise in technology, accounting and tax. I read annual reports and listen to earnings calls.

You probably have a life and don’t have time to do such things.

Besides, I trade stocks and options with play money. Most of my assets follow the rules above.

(If we’re close friends and you want me to look at your IRA, shoot me a note.)

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