Before we begin, I am going to tell you that I am here to show how Foxconn is not evil. If you would rather keep your head in the sand and continue to feel ashamed for your using your iPad, Macbook, iPhone, Android phone, HP computer, or a lot of other electronics, you are free to do so. But, I am sick of hearing people repeat economic idiocies they hear from the media so I am going to debunk this myth of slave labor and slave wages in Foxconn factories that produce the very electronics these people condemning Foxconn love to use.

Most of the outrage over Foxconn came about as reports of their employees committing suicide piled up. Why these folks are committing suicide is anyone’s guess. However, this big bad slave driving company gives the families of deceased employees 8.5 – 10 years worth of wages. How evil! The reason people are committing suicide at Foxconn plants is something a psychologist can look into. I am not a psychologist and I’ve never had suicidal tendencies so I don’t have first hand experience to draw from. But, I think it’s pretty safe to say that an evil corporation is under no obligation to pay families of deceased employees ten years worth of wages. A dead employee is not making Foxconn any money. Foxconn sounds like an altruist more than anything else!

Slave Wages

But, you still aren’t convinced so let’s say Foxconn does this as some kind of PR stunt to appease everyone involved. Fair enough. We will instead look at the actual wages Foxconn pays their employees. The average monthly wage for Foxconn employees is $300. “Aha!,” you exclaim, “$300 a month couldn’t pay for my daily cup of Starbucks! Slave wages!” Hang on to your trousers there. This doesn’t sound like much when compared to folks in the United States or other developed nations but, that would be an unfair comparison. Cost of living is lower in China and China is not in the same economic position that we are. I won’t go into detail about how wages and standards of living rise but, the fallacies thrown around for low wages in China are the same as the ones that claimed low wages during the Industrial Revolution and that’s been debunked many times.

So you think $300 a month in China is a slave wage. Fine. We can agree that these folks are more than welcome to leave Foxconn and work somewhere else. If you thought your job wasn’t paying you fairly, you’d go look for another one. Common sense. So why aren’t these people going to work elsewhere? Why are they sticking with these slave labor conditions at Foxconn? Are these Chinese folks just a bunch of a dumbasses? Poor and dumb, right?

For the sake of argument, lets say these poor Chinese folks aren’t dumb. Let’s take a look at their other options. The average hourly factory wage in China is $0.75. It was reported that the Foxconn worker who committed suicide worked 60 hours a week. I’m pretty sure there are accountants during the busy season who eat 60 hour weeks for breakfast but, we’ll consider these slave hours at the risk of offending accountants. So with a little magic of math we can say that the average Chinese factory worker makes $180 a month.

Those greedy capitalists at Foxconn are paying their workers 1.7x more on average. Monsters! I can’t imagine why any Chinese factory worker wouldn’t just get up and leave their terrible positions at Foxconn with all the greener pastures around.

Beijing’s monthly minimum wage is $140. Foxconn pays their employees twice as much on average. Foxconn also employes 800,000 people. Can you believe these people? Almost a million morons who aren’t smart enough to go look for a job that pays better with shorter hours in better working conditions. What rubes! All the smart Asians must have moved to America.

The Value of Money

Now, all this talk about wages is of little importance unless we know what these wages can buy. Absolute numerical value is meaningless when dealing with money. You could have $1 million Zimbabwe dollars and not be able to buy a cup of coffee. Using the famous Big Mac index, it costs $2.30 USD or 14.7 Yuan for a Chinese person to buy a Big Mac. The average Foxconn worker could eat Big Mac’s 3 times a day for 30 days and still have more than a third of their money left. It is important to note that Big Mac’s are not a bargain in China–they are actually more expensive than local foods so no one in China is subsisting on Big Mac’s.

The key point is that Foxconn’s wages do not leave their employees living in cardboard boxes barely able to afford food. No one is crawling around in the dark looking for worms to sustain themselves. To further put things into perspective, an editor for Sina, an online media company in China, is paid the equivalent of $624 a month. That is a little more than twice what a Foxconn factory worker is paid. Let’s look at some other jobs we consider high paying in developed nations: $18,725 annually for a telecommunications engineer, $14,979 annually for an actuary, and $7,490 annually for a western medicine practitioner or what we call doctors–real doctors practice Chinese medicine in China, obviously.

These folks aren’t making boatloads of money but, the cost of living is much lower in China. These engineers, actuaries, and doctors aren’t living poorly. Factory workers aren’t living as well as folks with higher paying jobs but, that’s to be expected. Their daily existence is not nearly as dire as the media or busy bodies over here would have you believe.

Poverty is the natural state of human existence. All the great wealth that we take for granted today didn’t just appear out of no where. Henry Ford didn’t dream of a car and magically put a car in every American’s drive way. Steve Jobs didn’t dream of an iPod and slip it into all of our pockets. That’s not how it happened or ever happens.

People in America used to be as poor as the folks in China. We didn’t have cars, microwaves, televisions, radios, computers, tractors, or anything. We had a farm. We got up at the crack of dawn to do back breaking farm work. Leisure time was a luxury. And even if you had more money than everyone in the world combined, you still couldn’t buy a laptop or a TV or see what your friends are up to on Facebook. It didn’t exist. Money doesn’t create wealth.

Working and saving creates wealth. These Foxconn workers will outgrow their jobs and as the rest of the world continues to improve technology, these low paying entry-level jobs at Foxconn won’t exist much longer. It will become increasingly difficult for people with no real skills other than the mechanical labor to find a job and I’m sure Foxconn will then be condemned for not providing jobs. You can’t appease people who don’t understand economics.

Everyone Wins

We live in a strange time where people believe you go to school to learn a skill so that you can start at a high paying job. That has to be amongst the most ridiculous ideas society has ever spread. We know that most college students come out of college knowing little more than they did before they blew $100,000 and four years. We have decided to throw out a system that has worked for hundreds of years: start at the bottom and work your way up. You learn the skills on the job as people have done for hundreds of years and continue to do.

What’s happening at Foxconn factories and other factories and industries all over China and Asia is how economies grow and standards of living rise. If our schools would teach real history instead of the politically correct version of history, none of this would be shocking.

The debate isn’t whether the Chinese is living as well as we are because they aren’t. Their GDP is tiny compared to ours. It would be comparing a ripe strawberry to an unripe one and complaining the greener strawberry doesn’t taste good. The debate is whether Foxconn is paying slave wages within their economic context and it is pretty clear that they are not.

Go forth and use your Mac’s, iPads, and PC’s with no guilt. You are ensuring poor people in Asia continue to have jobs and can improve their standards of living. You are also ensuring Americans continue to have jobs designing and innovating new electronics. Everyone wins.

*This post was written on a Macbook Air manufactured by Foxconn in China.

I had an urge to flex my study-demolishing muscles and this study about social networking increasing the risk for teen drug and alcohol abuse found it’s way to my attention–it has also made its rounds all over the internet. Here’s the study in it’s entirety. It was produced by Columbia University’s National Center on Addiction and Substance Abuse or CASA. As in: mi casa es su casa–I’ve also been working on a Spanish translation project at work. There were a whole bunch of findings but, let’s look at these three first as they were the most talked about:

- Five times likelier to have used tobacco (10 percent vs. two percent)

- Three times likelier to have used alcohol (26 percent vs. nine percent)

- Twice as likely to have used marijuana (13 percent vs. seven percent)

Parents would hard pressed not to put the kibosh on their child’s social networking use right now. Computers are only for homework! 5x more likely smoke cigarettes, 3x more likely to drink, and 2x more likely to smoke weed! My god, hide your kids, hide your wives, hide your husbands, social networks are destroying the world!

Now this is compared to kids who apparently don’t spend any time on social networking sites. I’m not really sure where you find these kids. Do they not have computers? No Internet maybe? Are there really kids between 12 and 17 who aren’t on any social network? I find it hard to believe but, let’s say there are.

In order to conduct this survey: 1,006 teens were telephoned and 1,037 teens took an Internet survey. Thirty percent of the teens reported spending no time on social networks or about 600 teens. The study also had this nugget of wisdom:

Despite assurances of confidentiality, some teenage respondents will be reluctant to admit inappropriate or illegal activities to someone unknown to them over the telephone or the Internet.* Therefore, this survey–like any telephone or Internet-based survey conducted in the home and asking respondents to self-report proscribed behaviors–may under-report the extent of the use of illegal drugs, the consumption of tobacco products and alcohol by teenagers, and other negative behaviors, and may over-report positive behaviors.

Really? Can we–with a straight face–really think that extrovert types who spend time on social networks to talk about themselves and be social with others are going to under-report their use of illegal drugs or alcohol? I’m going to suggest that the opposite is more likely to happen: teens who spend time on social networks are going to over-report–privacy is a lesser concern–and the kids who don’t use social networks are going to under-report–privacy is a higher concern. But, this is all anecdotal either way. We’ll just assume the teens are stating the truth.

So how do we account for the increased risk of tobacco, drug, and alcohol use among teens who spend time on social networks and teens who don’t? Firstly, no one should look at these risk factors as being causal. They are little more than correlations. The study does not show that social networks cause teens to smoke cigarettes, drink alcohol, or smoke weed. It strongly suggests that social networks lead to such behaviors but, an objective view of the study only shows that there’s a larger cross section of teenage social network users who are also teenage substance users compared to the cross section of teenage social network abstainers who are also teenage substance users.

In fact, we could very well say that a great deal of teenage substance users like to use social networks or that being a teenage substance user increases your risk of being a social network user. So why not report it that way? The data equally supports such a statement. The folks who conducted this study had a conclusion that they wanted to prove and they mangled the data to support it.

They also reported this:

Compared to teens who have not seen pictures of kids getting drunk, passed out or using drugs on social networking sites, teens who have seen these pictures are (Figure 2.D):

- Three times likelier to have used alcohol (35 percent vs. 12 percent)

- Four times likelier to have used marijuana (21 percent vs. five percent)

So now you must think that this correlation is more than just some obscure link! Kids who see others doing bad things end up do bad things themselves! Monkey see, monkey do. While it is more than possible that teens will imitate other teens, we also know that birds of a feather flock together. In the case of this study, it could very well be that teens who drink and smoke will have friends who also drink and smoke and they are also friends on social networks. They would see these pictures because they are friends. Social networks don’t generally show you updates from people who aren’t your friends.

The best part of this whole study is at the end when they talk about how the parents feel.

Eighty-seven percent of parents say they think spending time on a social networking site does not make it more likely their child will drink alcohol; 89 percent say spending time on a social networking site does not make it more likely their child will use drugs.

This was in a section titled, “Parents Fail to Appreciate Relationship of Social Networking to Teen Risk of Substance Abuse.” Even though there is not a single causal relationship in the entire study, the authors believe that parents do not appreciate the relationship that social networks have on teenage substance abuse. Parents don’t think social networks are the devil’s work because they understand their children and understand that teens will experience peer pressure and communicate with their friends with whatever means are available–social networks today, telephones a decade ago, letter writing before that, and smoke signals in the stone age.

Teens acting like teens is not a phenomenon of the social age. Trying to link teenage smoking, drinking, and drug use to social networks is akin to pinning those things to going to school. I bet there’s a correlation between drugs and school but, no one is idiotic enough to think that school causes those things.

This is not science. If Facebook didn’t exist, this study would blame something else for the use of drugs and alcohol among teens. The fact is that some teens are going to try drugs and get drunk no matter what you do; no matter how well or poorly they were raised. The problem with drug and alcohol abuse has more to do with the mythology society gives them in the eyes of teens than anything else. Making something forbidden to teenagers only makes them want it more. You were a teen once, this isn’t news.

We should not forget that this is a study based on surveys answered by teenagers. Such observational and uncontrolled studies are inherently too weak for an respectable person to draw conclusions from. There is no evidence to suggest that social networks are doing harm to today’s youth. It has more to do with older folks being unable to grasp the new medium and therefore fear it. That fear leads folks to manipulate studies to support their biases.

That’s all we have here: a study with no causal evidence manipulated to support a preconceived notion that social networks are harming teens. Would somebody please think of the children! 

LinkedIn had their IPO and more than doubled their share value in a day. Of course, the whole world is now wondering if there’s another tech bubble brewing. The tech bubble in 2000 wasn’t that long ago so we haven’t yet forgotten about it. But, is this just a case of being wary of getting burned twice or is there really a bubble in our midst?

I don’t work directly in the technology industry that’s booming. I work in the games industry and we’ve received an echo effect from the tech boom–specifically social games and apps. Some can say that social games and game apps for mobile devices have driven the boom but, that’s an entirely different discussion. For the record: I think games are an innovative driving force everywhere but, that has nothing to do with the topic at hand.

It’s safe to say that I’m not an outside Wall St analyst looking in. I’m not saying that makes my opinion anymore valid or correct but, I think I understand what’s happening better than a talking head. Or it makes me completely blind to what’s going on. Either way, it’s always good to get different perspectives.

It’s a Bubble Isn’t It?

The analysts are generally espousing doom and gloom. Jim Cramer says it’s ridiculous, outrages, and preposterous. Okay, Cramer was talking about the way Morgan Stanley, Bank of America, and others priced the LinkedIn stock initially. The story goes that the stock was priced too low initially and that’s why we had this ridiculous one day rocket launch that more than doubled the stock price.

Maybe so. Maybe not. I don’t think LinkedIn is worth $8 billion dollars. LinkedIn raked in under $250 million dollars in gross revenue between 2009 – 2010. Net income? Just above $15 million dollars. This means we’re saying LinkedIn is worth about 35x it’s annual revenue.

35x? Really?

That’s pretty ridiculous but, I don’t think that LinkedIn alone designates a bubble. LinkedIn’s stock is a bubble. If they can prove that they can grow revenues exponentially then perhaps this valuation would make more sense but, I don’t think it is currently justified. It’s likely that the stock price will hang around here and LinkedIn’s revenues will have to play catch up or the stock price will fall to a more reasonable level.

For LinkedIn, I think this summarizes the tale nicely:

“We think it’s a very good financial model and a good business, but at these valuations, it’s potentially, ‘Watch out below.’ ” – Rick Summers, Senior Equity Analyst, Morningstar

A Boom Then?

If I’m saying LinkedIn doesn’t designate a bubble then is this just a boom? Real, legitimate growth?

Generally speaking: yes. I think there is real growth happening in technology. Other industries will probably suffer from the growth in tech if those industries don’t get their act together and get with the times–the times that technology is making–but, I think most of the boom is legitimate. Some of these valuations are pretty ridiculous but, a bubble in the stock market is not necessarily a bubble in the economy.

I have little doubt that when Facebook, Twitter, et al. do their IPO dance that they will also become highly overvalued. Some folks will probably lose their shirts in the stock market and others will make a killing but, that’s the way of the stock market. It isn’t that far removed from gambling. It’s not about pure chance but, people go into it on hype and little research so there’s almost no difference if you’re that investor–watching Mad Money does not count as research.

Technology is creating real jobs that produces real things people want. This isn’t about eyeballs or page views or something else that has unpredictable and unreliable monetization options. Okay, SOME of it is but, the successful companies aren’t relying on those things. We’ve moved away from an internet where no one knows anything about making money to an internet where we do know a thing or two about making money.

Services come with a fee. Not everything is free–shocking! Some things are free. Then we have in-App purchases or what are known as micro-transactions. There’s also the freemium. No matter how we slice the cake this time around, these companies are thinking about–and actually are–making money.

Even LinkedIn. I don’t think they’re worth $8 billion but, they are making money. $15 million is nothing to scoff at. That’s real money and it buys quite a bit. LinkedIn isn’t going to fall to $0 anytime soon. They are worth something. Just not $8 billion.

So bubble? No. We aren’t in BubbleVille yet.

Since the Great Recession or the Greatest Depression began in late 2007/early 2008, many people have appeared on television and given their opinions and predictions on what was happening, what will happen, and how to fix it. Some were initially blind to the approaching cliff, others continued to be blind as they sped towards it, and a small minority saw it from a mile away.

It is inevitable that we will rise out of these poor economic conditions by hook or by crook. No single market player or government force can overcome the prevailing powers of the market at large. The only questions are when? and how much suffering we’ll have to endure? The small minority that saw this economic apocalypse looming in the distance are largely dead right on everything as their predictions continue to become reality.

The recommended medicine from this group is to cut government spending, pay down debt, and start producing things in America again. I am in congruence with the first two recommendations but, have good reason to reject the third. I am not rejecting the idea of production, just the idea that America needs to manufacture trinkets and widgets in order to have a stable, thriving economy and avoid a catastrophic reduction in the standard of living.

In order to support this claim, I will discuss the flaws of economic indicators that are driving the logic behind the necessity of manufacturing and then explain why production is not manufacturing but, manufacturing is production. Using that as a foundational basis I will explain how the innovations in the digital age hides a massive amount of production that is currently immeasurable and how that offsets the need to manufacture.

But First, A Little Background

Firstly, I am not an  economist and I do not play one on the Internet. However, I love the dismal science inexplicably and enjoy digging into the subject. I take issue with Keynesian’s like Paul Krugman as his economics is too entrenched among his peers and forgoes reason and logic for mathematical models–models that aren’t representative of reality. I have no qualms with criticizing popular economists or ones with Nobel Prizes. I am no stranger to voicing lone opinions. I understand that there may be some facet of economics I have not considered that can severely impact the congruence of my conclusion but, I’m going to make the best case I can.

While I am not an economist, I am a technologist: I know the in’s and out’s of computers and its derivative technologies like the Internet, mobile phones, laptops, tablets, podcasts, wiki’s, blogs, etc. and the culture that it has spawned. I am not on the cutting edge but, close enough to feel the splatter.

Being a master of no single trade, my combined understanding in the subjects of technology, business/marketing, and economics gives me a perspective that each field wouldn’t necessarily come to on their own. This doesn’t make me more right or more wrong but, it does give me the potential to see something that isn’t normally noticed.

Now that you can see where I’m coming from, let’s get to the heart of the matter.

Flaws of Indicators

As we live this train wreck economic disaster in slow motion, economists, financial analysts, and business people on TV are citing economic indicators like GDP, CPI, PPI, employment rate, interest rates, investment activity, imports, exports, manufacturing, etc. to help them determine what the hell is going on.

The news likes to make a big deal of GDP reports and the slight up and down ticks in unemployment. These economic indicators create a parallel world that don’t match with reality as we know it. Most of us can see that news reports do not reflect what we’re experiencing day to day. This has to make one wonder how useful or accurate any of our dated economic indicators are.

The most popular economic indicator, Gross Domestic Product, is a flawed measurement of the economy for many reasons. A common critique of GDP is that useless and excessive government spending will boost GDP even when most of that spending is wasteful. It is prone to manipulation from governments by arbitrarily printing money and spending it.

GDP doesn’t account for disasters resulting in spending that would otherwise have been spent elsewhere or saved for future investment–Hurricane Katrina is an example–it only takes into account the immediate dollar amount used to rebuild as a positive bump to GDP.  GDP is pretty poor at measuring an economy’s real health and it is becoming less indicative every year as technology–led by the digital space and in general–continues to improve standards of living and productivity.

Observations of the incongruence between economic indicators and the visible and anecdotal improvements made by computers and information technology was made decades ago in the 1980′s. It is often referred to as the productivity paradox. The paradox refers to the “apparent contradiction between the remarkable advances in computer power and the relatively slow growth of productivity at the level of the whole economy”.

This contradiction tells us that one of the two assumptions is wrong. Either our economic indicators are flawed and is inaccurately measuring what is really going on in the economy or computers have not really made much improvements to society. I am making the case that it is our means of measuring economic health that is flawed, that computer technology has and still is vastly improving productivity, standards of living, and the economy at large, and the notion that America needs to return to a manufacturing country in order to thrive is flawed largely because of this reasoning.

Production is Unavoidable

It is popular economic theory–often known as Keynesianism–that we need to maintain massive amounts of consumer spending that drove the boom in order to get out of the correction. The minority view argues that we got into the hole because consumption was too high so we need to cut spending and start making things in America again because we need to produce before we can consume.

Few of us in the real world believe in fairy tale stories that tell us the cure for too much spending is to spend even more. We have no qualms with the idea that we need to cut spending. It is the only logical thing to do after years of overspending. It is a basic economic premise that you need to produce in order to consume. The want to consume is why we produce but, we cannot consume until we have produced.

At it’s fundamentals, an economy is little more than two people trading one thing for another. No trade can take place unless both people have something to trade–which they had to have obtained by some form of production. Whether they weave a basket, catch fish, or trade their factors of production–like labor–for another good is up to the parties involved. One way or another, production will happen if consumption is to happen.

Loans can be arbitrarily or strategically made to forgo immediate or near-term production and allow for consumption but, eventually loans come due and either the individual produces to pay back the loan or defaults. Defaulting will severely limit an individual’s ability to borrow in the future in which case they will only be able to consume by producing.

No matter how you slice it, consumption cannot take place without production.

Production is Not Manufacturing

There is little flaw in the concept that you need to produce before you consume but, there is a glaring flaw in the definition of production.

When it is concluded that the solution to our economic woes is to bring production back to America, production is generally meant to be manufacturing because that was the dominate form of production during the decades considered to be America’s most dominant.

It is hard to refute that manufacturing was a major factor–if not the strongest factor–for America’s economic dominance in the past century from 1900 to 2000–less so as we got to the end of the century. Whether we want to credit government policies or natural tendencies of a market economy, manufacturing slowly–or too quickly for some–moved to developing nations like China, Thailand, Malaysia, Indonesia, and Mexico. Manufacturing in the United States got too expensive due to taxes, inflation, unions, or simply rising standards of livings and so it is only logical that as American’s value–nominal or actual–in hours increased, it opened doors for people whose hourly value was lower.

This is the law of comparative advantage.

If it will cost $20 an hour to produce jeans in America and $1 an hour in China, it is economically irrational to do it in America. Assuming quality and everything else being equal, why would a business choose to pay $20 when they can pay $1? Why would an individual choose to pay more for the same exact pair of jeans? Outside of the clever positioning of marketers–and there is only so much room for luxury brands–there is no reason why anyone would not choose to save money to be spent somewhere else. This is called an increase in the standard of living.

The landscape now is that almost every thing in our homes and offices has a Made in China sticker on its underside. In order for the law of comparative advantage to apply, we must be giving something to China. By our current means of measure, we are buying more from China than China is buying from us; our exports from China exceed our imports to China. This imbalance leaves China with more dollars.

This monetary imbalance also implies that China needs to something with all their excess dollars that isn’t going into buying products from us. China is investing that money. Some is invested in America and some of that investment turns into loans to Americans who turn around and buy more exports from China.

This is borrowing money–that we likely borrowed in the first place to buy stuff from China–in order to buy more things from China. This is bad and the day of reckoning will come as Peter Schiff, Jim Rogers, Gerald Celente, and others are predicting. This is not where I disagree. I am disagreeing on magnitude. I am postulating that the tools of measurement we use for GDP and therefore the import/export imbalances are flawed and not representative of what is truly happening.

As long as we are borrowing money in order to consume, a correction will come sooner or later. However, if we aren’t accurately measuring all of the production that exists and occurs in America that is exported to China and elsewhere, we cannot use the sole measure of trade imbalances to gauge the magnitude or effects of the correction.

I’ve already demonstrated some of the flaws of GDP and the general ineptness of official measurements for gauging modern economic health. The key take away is that all official measurements are particularly inadequate in measuring economic output in computer related industries whose end products don’t conform to traditional retail forms.

This puts otherwise sound economic conclusions on slightly unstable footing.

For a moment, let’s assume that the level of exports in America is exactly as the official numbers present where our trade deficits are massive and this imbalance will be corrected sooner or later. This correction is going to involve a severe cutback in consumption here which will cause a massive drop in standards of living. With the logic being that periods of living beyond one’s means is corrected by periods of living beneath one’s means.

This logic is sound but, the assumption derived from this logic is not sound: that standards of living must drop in order to make up for the periods of overconsumption.

Hiding in Silicon

Let’s take movies as an example. I’m not old enough to remember anything existing before VHS tapes. I only remember movies in VHS form and now in disc form–DVD, BluRay, etc. VHS tapes and discs need to be produced somewhere. VHS tapes might have been produced in the United States but, I am fairly certain CD’s, DVD’s, or any discs are not produced in the United States. Certainly, the plastic cases aren’t made here either. They are most likely all made somewhere else–my copy of Halo Reach for XBOX 360 says Made in Mexico.

Prices for DVD’s range from $15 – $20 with special collector’s editions sporting even heftier price tags. Prices at big box stores like Target, WalMart, Best Buy, etc. are more expensive than Amazon.com. The world–and certainly the United States–is shopping online more and more. 2010′s Black Friday and Cyber Monday sales tell a significant story. We might be in the worst recession since the 1970′s but, sales for the two biggest shopping days wouldn’t show you that.

It is more than possible that sales throughout the year were minuscule thus resulting in massive spending around Thanksgiving weekend–people forfeited spending throughout the year so that they could do it later in anticipation of money saving deals. My theory isn’t that there is no recession. I see increases in both online and offline sales as telling a different story.

People are still conscious of their spending and the gloom of the economy is on everyone’s mind. A move to online shopping makes sense as prices are generally lower online than offline. There are going to be those who are adverse to online shopping and choose to continue shopping with retail stores. These people are a base of spending that retail outlets can expect–although I suspect that base is shrinking by the year.

We can conclude that more people are shopping online as a general trend that we can see and hear about anecdotally and from increased online purchases. This begs the question as to why the brick and mortar retailers aren’t seeing a decline–at least not on Black Friday. One would assume that offline sales should decrease if online sales are increasing. This would make sense if the size of the pie is set and shopping online precludes you from shopping offline and vice versa.

What I see happening is that online retailers are generating an amount of savings for its customers so great, that it allows for offline shopping as well. Black Friday sales for offline retailers grew much less than for online retailers and such small growth could have come from deep discounting to move more product, pure inflation, or some other means that doesn’t demonstrate economic strength. This means that there could have very well have been a decrease in offline spending if it wasn’t for online spending saving more people more money and massive amounts of value incentives offline.

Going back to the DVD’s, while Amazon.com sells DVD’s for much cheaper than retail stores, the real price savings are in the digital sales. It costs $20 to buy a DVD of a big name movie from the store and watch it. It costs $10 to buy it digitally from Amazon. Amazon saves you 50%. Savings of this magnitude applied across an industry accounts for a huge sum.

Living on a Binary Standard

It is entirely feasible that living beneath our means will not result in a reduced standard of living measured against today’s standard of living. There will be a decrease if measured against the potential standard of living but, if the worst of the storm is that we have to maintain our standard of living while we rectify having lived above our means for so long, I’ll gladly take it. It is even possible that we could live at an increased standard of living measured against today’s standard of living if technology continues to provide the magnitudes of savings as Amazon does.

We would also have to take into account the kind of savings in time, energy, and money that Wikipedia, Google, Facebook, Netflix, etc. all account for. Their services are largely intangible and to people who aren’t familiar with technology: imaginary. These companies are offering supplementary services at no cost or low cost to anyone with a computer and an Internet connection. The key is that they are supplementary and not complementary. They are capable of replacing previously used products that cost more and may have involved manufacturing.

This fact alone makes manufacturing a poor measure of the health of an economy in present day and brute force measurements like GDP impotent at measuring the economic condition of a nation–especially ones leading the Information Age.

Let’s now go back and don’t assume that the trade imbalance figures are correct. Let’s say that those numbers do not account for our invisible exports.

China sends us trinkets and widgets. We send them dollars and the few scraps of things that we physically produce. That’s what our current system of measurement can detect. However, what is the value of Wikipedia–or all the entries contributed by Americans–to China? What is the value of the knowledge of advanced, modern infrastructures that Microsoft and Google provide the Chinese? Or any country that an American company takes innovations to? These are imports and exports that are immeasurable yet, they are of immense value.

America used to produce the best cars. We innovated motor vehicle technology and manufacturing. These days, other nations have taken that title away from us. The Japanese produce great cars but, it didn’t happen in a vacuum. They learned from us and continued improving while our car companies rested on their laurels. While the general consensus is that Japanese cars are better than American cars with the Koreans coming up fast and the Germans producing great vehicles as well, the fact is that all car manufacturers are learning from each other and trying to oust each other–with the possible exception of Government Motors. Cars are–on the aggregate–better than they were 10 and 20 years ago.

This happens.

You cannot corner a market forever. At some point, the gains in productivity are increasingly marginal–law of diminishing returns–and leap-frogging competitors or nations will just not be possible.

I make the argument that we are at this point in manufacturing as we know it. No one in America or else where is going to innovate a new way to manufacture trinkets and widgets any cheaper as long as there is cheap physical labor and undeveloped nations. It is more practical that an American corporation like Intel or Apple engineers a new type of material that greatly reduces the cost of raw materials than it is that the system of manufacturing is going to get cheaper. When we do reach the point–in a far away future–where all peoples are lifted from poverty where their value per hour is too great to justify using their labor for manufacturing, a new means of manufacturing will arise–purely robotic maybe? And after that there might be no more huge leaps in cost reduction and that’ll be that.

It is a fact that we are not manufacturing like we had in the middle of the last century and China looks like they are where we were during the Industrial Revolution. These are all undeniable but, it is pretty glaring our tools of measuring trade imbalance are flawed. It relies entirely on the premise that only tangible goods require production and are counted. This is obviously not true.

Amazon is now selling more digital books than they are print books. It doesn’t mean less books have been sold but, less tangible copies exist. Digital books are also generally cheaper so it would then appear that less tangible products are manufactured in book factories when the sales of books have not actually decreased. Eventually, only a few book manufacturing plants will exist to produce high end, collector’s editions of books that people only buy for display purposes. It could happen. And 90% of all book consumption will be digital. This would show a collapse in print and the manufacturing of paper for books but, no ill has occurred. This is a good thing. Consumers save money to spend elsewhere to create new jobs that would otherwise not have existed.

This is known as creative destruction and it is a concept that is missed, misunderstood, or confused–creative destruction should not be confused with the broken window fallacy–by many people. It appears to be human nature to expect that all things will stay as they are and any loss in the familiar will leave a gaping hole never to be refilled. History demonstrates that every destruction of a technology is replaced by something better: cars vs horse-drawn carriages, computers vs typewriters, etc.

The Future Will Vindicate the Theories

Not even the most respected economist can say with 100% confidence that their predictions are guaranteed to come true. And since I am not an economist, I make no guarantees at all! Economies are impossibly complex for any single or group of individuals to be able to forecast with perfect accuracy. Of the millions of decisions made every second of every day, it only takes one to change everything.

I believe more thought and work could be put into this idea that physical manufacturing is not necessary for the United States to remain a dominant economic force and that standards of living can hold or improve while we go through the painful process of correcting poor habits of overconsumption but, I hope that I did provide a clear and concise explanation and defense of this idea.

At the very least, I hope to have added–even if it only amounts to little more than a grain of sand–to the economic understanding of the post-Industrial Age.

This idea unfolded itself after touring Google’s New York offices and being utterly astounded. I have read books on Google and use Google products and am fairly familiar with Google. I know the value that Google has brought to the world and my life specifically. I read the news of their revenues like everyone else. Seeing the insides of Google is little short of amazing. Google has armies of smart people working in its buildings and from a traditional standpoint, Google manufactures nothing. Yet, Google makes a gargantuan amount of money and if the premise that you must produce before you can consume is true, Google must be producing. There is nice furniture, decor, high tech equipment, toys, and enough food for you to feed several small nations all over Google’s offices and Google is not drowning in debt.

So if Google is producing something but, they don’t manufacture anything and the future of America is more Google than it is GM, the logical conclusion is that manufacturing isn’t the only kind of production that leads to economic dominance.

I won’t mention brands that didn’t have a spike in impact or weren’t new to me this year like Google, Amazon, Netflix, Rhapsody, Facebook, and Twitter. I can’t imagine living without their products but, they will not be mentioned.

FreshDirect

I haven’t done any serious grocery shopping at a supermarket in months and I do not miss it. FreshDirect is based in New York and only delivers to a growing list of select areas. It is incredibly convenient for me to shop online. FreshDirect tells me about the different meats, vegetables, fruits, and how they’re cooked.

When I’m at a supermarket, every vegetable looks the same and while I can tell the difference between pork and beef, I am stumped by the different cuts. I am not a gourmet chef or a foodie. My cooking is rudimentary at best–although improving daily!

The quality of the food has been better than anything I’d be able to pick out at the supermarket. I’m sure someone who knows what they’re looking for can outperform FreshDirect’s picks–maybe–but, I am not someone who does. I am just guessing 50% of the time.

I also never know what fruits or vegetables are in season or are grown locally. FreshDirect fills in all these information holes. I’m fairly health conscious–okay, quite health conscious–so eating with the seasons and near my environment has its appeal.

Their customer service has been top notch and I will credit that with hooking me in the first place. There are a ton of benefits that I’ve already mentioned but, I like a company that treats me well. I know that I could get all of this food cheaper if I wanted to–it would take more work–but, FreshDirect treats me well, saves me time, and brings delicious food right to my door.

I have shopped so much with FreshDirect that I’ve been a Chef’s Table Member for a while and I take advantage of their Delivery Pass–like Amazon Prime. I hope to never have to go back to supermarket shopping. That’s so 2009.

BodyBuilding.com

As mentioned, I am fairly health conscious and I have been that way ever since I was a young teenager. I’m not actually a bodybuilder–professional or amateur. I just love the gym and like to be physically fit. In order to be in the kind of shape and health I want to be, some supplementation is necessary.

The increased food quality from FreshDirect has reduced my supplement load but, the modern lifestyle just doesn’t give the body everything it needs to thrive. Because I’m not interested in merely surviving–the modern world has made surviving a piece of cake–it’s thriving that’s the challenge.

I wrote a post about vitamins this year and since then I have stopped taking a multivitamin. My diet takes care of 98% of all the vitamins and minerals I need and for the 2% that I don’t get enough of I supplement. Certain other supplements I take purely for a specific desired result.

My diet lags in Vitamin D as most of diets do as well as sufficient Omega-3 fatty acids–switching to entirely grass fed meat products would remedy this but, I’m not made of money, yet. I also don’t walk around eating enough dirt or fermented foods so I take probiotics to ensure a happy gut.

For all of these vitamins and more, I use BodyBuilding.com’s store. I used to occasionally dabble with GNC and BodyBuilding.com to get various supplements but, I have since opted out of GNC after a very notable customer service experience with BodyBuilding.com. It’s the same trend here as with FreshDirect: I like companies that treat me well.

BodyBuilding.com has an extensive inventory and they ship it to you so fast you may as well have walked into their warehouse and picked it up. My last order arrived in less than 24 hours. I didn’t think it was possible but, it happened. I ordered something around 6PM and it came the next day before 6PM. How did they do this? I don’t have the foggiest clue so I’ll just say it was magic.

The BodyBuilding.com social media team is also a pleasure to deal with as are their other customer service representatives like Kamikaze Candy who sent me a card after resolving an issue I had. Totally unnecessary but, that’s how you maximize customer lifetime value!

Yogi Tea

I was never really into drinking tea. There were a few problems. The biggest brand in tea that I knew was Lipton and their offerings were bland at best. The tea itself also sucked. The rest of the tea brands that I’ve see on store shelves were not much more appealing. The two that I saw the most were Bigelow Tea and Celestial Seasonings. The former is just a bad name as I pronounce it like gigolo and that’s not particular incentivizing. The latter’s box art made me feel like I was buying something foreign. Not that there’s anything wrong with foreign products but, I’m not familiar with them and if I was ever given a choice between two colas where one is Pepsi and the other is a Japanese Anime cola, I’d choose Pepsi. Familiarity wins often.

I’m not a tea expert so familiarity was key. This is not to say that Yogi Tea was familiar. They were not. Yogi Tea should credit a great deal of their business from me to FreshDirect. It is because Yogi Tea showed up in my search for “tea” with FreshDirect that led me to try it. And then I loved it.

Yogi played a part as well. The little fortune cookie-esque tags on each tea bag didn’t hurt the cause. The large selection of teas for all kinds of things like detox, energy, anti-oxidant, immune, stress, sleep, etc. all made tea more accessible. I couldn’t tell you what one dried leaf is supposed to do compared to another. Many packaged tea companies do this as well so that’s not why I became a fan.

I was coming from occasionally drinking Lipton tea so almost any other brand would have been an upgrade. Yogi tea is delicious, the individual tea bags with inspiring messages are fun, and–important for me–FreshDirect carried them.

There’s no great customer service story here. Just a great product that doesn’t intimidate and has a splash of personality.

PerkStreet Financial

I haven’t loved or even liked a bank since the FDIC gave–okay, sold for a measly sum–WaMu to Chase under the cover of a lazy Sunday. Long story short, I have been with Chase ever since then. Chase has been tolerable but, I’ve been looking. I have an account with TD Bank which I don’t use–they need to update their online banking technology.

I loved WaMu. They treated me well–can you see the trend? They were also my first so that might have some sentimental value. Getting your first bank account is a big deal. It’s growing up. Becoming an adult.

I am anything but loyal to Chase. I would leave them in a heartbeat if a better bank came around. It’s unfortunate that Chase’s biggest competitors: Bank of America and Citibank also suck. Basically, banks just suck.

I came across PerkStreet one day and was intrigued. I had heard about online only banks like BankSimple–which isn’t fully operational yet –and wanted to give it a try. The rest of my life is basically online so why not my bank? I signed up with PerkStreet and the process was fairly painless. It took a lot longer than I was accustomed as accounts are generally ready to go right after you open one.

The whole online-only part is pretty cutting edge so I can understand if the process isn’t streamlined yet. I have only had my PerkStreet account for a month or so and I have a feeling that I’m going to like it.

They are nicer and they appear to want to treat me well–that gets me every time! If nothing else, their perks–basically a rewards program–eclipses anything Chase has to offer.

Chase has informed me that they are going to tack a $12 service fee to my checking account starting in February. They are on very thin ice with me. My Chase account will be closed in 2011 if they can’t or don’t offer me a reasonable form of free checking. Which means I will be seriously test driving my PerkStreet account in the next couple of months and if all goes well, I won’t need a personal Chase account at all.

The PerkStreet Debit Card is also black and uncommon as most people use traditional banks. So I do feel a little special whipping that card out.

***

UPDATE: The fine folks at PerkStreet left a heartwarming and assuring comment and made a tweet about this little blog post from little old me. I see they are keeping an eye on what’s being said about them–a characteristic I like!

I liked the sound of a savings account in 2011 that was tweeted earlier today and Kyle in the comments mentioned a mobile application. What sounds even better is the enthusiasm to customer service!

Let’s just say: I might have found my new favorite bank.

***

Mint.com

I didn’t join Mint.com this year but, I started to seriously use it this year. It has helped me greatly in managing my money. I am not particularly spendthrift. I’m more of a classic consumerist American. There’s just so much I want!

Mint.com has improved their service greatly since I last used them and I can actually use it to budget my money now. And I have been doing exactly that for several months. Seeing where my money goes, having a budget, and seeing where I’m overspending is incredibly useful.

It is safe to say that my flow of money has vastly improved since I’ve started using Mint. I can’t give Mint all the credit because I deserve some too! I’ve probably never felt as financially adroit as I have in the second half of 2010. Mint helped a lot to organize my money and prioritize it’s use.

I managed to do all my holiday shopping this year and have excess money in the bank without dipping into savings or credit cards to get it done. Maybe there were just a lot of sales going on or that little budgeting tool Mint gives you–for free–does a lot more than look pretty. Often, just being aware of a measurement will adjust the thousands of decisions you make daily to produce a result thought to be impossible.

Mint’s blog–MintLife–is also packed with useful information and a great living, breathing content marketing plan in action.

And it’s all free so get on Mint.com and use it.

I’m just talking about being in the right place at the right time. Consistently.

Closing on Holidays

There are some holidays where virtually every business is closed. A lot of holidays have become days for sales because not snoozing on those holidays are a way to increase sales: win. It’s really not some corporate evil master plan that has made a monetary event out of Labor Day, President’s Day, Independence Day, etc.

Businesses are always looking to take market share away from their competitors and what easier way to do so than to be open when they aren’t? I still need to buy things on holidays. There’s a market.

The Gym Market

I’ve been weight lifting since I was 13. Training at the gym is my rock. A 45lb plate is the same no matter where I go; it will always be 45lbs. Gym time is where I can clear my head.

Where there is nothing else going on besides moving a heavy weight and not dying in the process. It is where I can predictably get into a state of flow. No matter how well I take things in stride, life is always going to be a little stressful. The gym is my reliable release.

I had taken 2.5 weeks off from the gym recently and was itching to get back in the gym. This break coincided with the end of my gym membership so it was a good time to take an extended break and then finish the year off strong.

I’ve been going to a local gym. They have no other locations. It was the only one of its kind and it wasn’t very flashy. They have a mix of old to semi-modern equipment. It is one of those gyms with pictures of competitive bodybuilders lining the walls as a showcase of the great bodies that have trained there at one time or another.

A classic gym.

I was ready to go on Saturday. It would have taken an act of God to prevent me from lifting. I walked over to the gym and they were closed. Closed because of Yom Kippur.

Always Have a Plan B

I really wanted to lift. It’s almost like craving for White Castle.

There I was standing outside the closed gym with  a cup of Starbucks. I wanted the caffeine to give me a boost for my lifts. Now, that caffeine only served to make me more determined to hit a gym.

There is a New York Sports Club three blocks from my apartment. The gym I was going to was further away but, they were 24 hours. I have logged many workouts in and around midnight in the last year.

NYSC closed at 11pm. Coincidentally, I was planning to move my workouts to the morning after this break to give myself more time at night to work on some projects. So in my mind, the 24 hour benefit was now a negative crutch I would have to stop myself from leaning on.

As I walked back towards my apartment, I was deciding what I was going to do when I got to NYSC. My first idea was to find their day rate. My second, their month rate. And my third would be to join them again. I was a former NYSC member for over two years so I am familiar with the luxury of towels and new, well-kept equipment.

I walked into the NYSC and the girl at the counter tried to scan me to no avail–didn’t have a card. I asked about their day rate: $30. Seriously? So, then I asked for their month rate: $79. Not thoroughly pleased with either, I asked what it would look like if I joined them for a year right now: $39 today and $69/mo.

That was more to my liking even though it was still about two times more expensive than the price I was paying. I do get access to all other NYSC’s during non-peak hours and the shiny equipment. I thought about it for a little and decided, “what the hell, let’s do it.”

So here I am, a NYSC member again.

Punishing Businesses for their Religion

While I am not purposefully punishing a business for their religious practices, that is fundamentally what happened. I would have spent hundreds of dollars at my old gym if they were open that day. I have instead committed to spend a little shy of $1000 with NYSC–roughly two times more than what I would have spent with my old gym.

I surely cannot calculate what may be gained by forcing myself to get my workouts done in the morning instead of having the crutch of being able to go late at night and then starting the day late as well.

Small local businesses are often in danger of not existing tomorrow as the big, well-funded businesses come into town. This NYSC didn’t always exist here. My old gym has existed long before NYSC. The space that NYSC is in used to be a pool hall.

While I like to support small, local businesses and what not, I am also a consumer like any other. I have wants and the business that can satisfy those wants gets my money.

It really is that simple.

On that Saturday, NYSC was there and able to give me what I wanted. The local gym never did do a good job building brand loyalty. I wasn’t enamored by them and could do without the class of morons who inhabit that gym and gyms like it. My guess is that the NYSC price tag filters out a great deal of jackasses; this leads me to believe that Equinox must have the most polite people.

When a business doesn’t build brand loyalty, customers will jump ship for any number of reasons. It only takes one errand error to take you out of the game.

Snooze = lose*.

*I didn’t think of this incarnation of “you snooze, you lose.” It was in a text conversation and I thought it was awesome. You know who you are. :)

And good riddance! Who wants to deal with bad customer service anyway?

I have written about customer service from my own experiences to abstract ways of thinking about exceptional customer service. Let’s say I consider customer service important and approve of great customer service when I see it.

So much so that I will share it. And share it a lot. It’s good for a brand to be in my good graces. I might not directly influence millions or even thousands of people but, my indirect influence could account for a small fortune in customer lifetime values.

This is the case with almost anyone today. One tweet. One Facebook mention. One blog post. And we’ve just told hundreds of people and countless more will discover it later. Treat us poorly at your own risk.

And this isn’t just theoretical. Many powerhouses and small businesses have been eaten alive by competitors who outfoxed them in customer service. However, just looking at dead companies doesn’t account for the companies who are still alive because they stepped up their customer service. There is little room left for taking customers for granted.

It takes truly exceptional service to stand out.

Overcoming Convenience

About a week and a half ago I ordered vitamins from BodyBuilding.com. I had only ordered from them once before and everything went well. Normally, I buy from GNC or CVS. GNC for the more potent multi-vitamins and CVS for the run of the mill Zinc, Vitamin D, etc.

I’m not an avid reader of BodyBuilding.com but, I was recommended their store by a friend. They have an enormous selection and great prices so there is no reason not to buy from them. It’s just not always convenient. CVS is open 24 hours and down the block. GNC is easy to find.

I decided to try a new multi-vitamin and was running low on other vitamins as well so I bought all of it from BodyBuilding.com. As a multiple item purchase planned ahead of time, online is generally more convenient.

The one thing that I am semi-worry about is my superintendent thinking I take steroids because the box is emblazoned with the BodyBuilding.com logo. Not that body building is a direct link to steroids but, there’s that stigma. I’m just someone who likes to stay in shape.

So, random judgers be damned!

Delivery Exception

BodyBuilding.com shipped my order the next day–speedy service! It was coming from PA to NY via FedEx. FedEx had it ready to deliver to me in a day or two and then I saw something I’ve never seen before: a delivery exception.

According to FedEx, the package was damaged in transit and was undeliverable. I Googled around to figure out what a delivery exception meant. Surely, someone has dealt with this before. It was all very inconclusive. FedEx’s own site wasn’t particularly useful either.

This was also a time when I was busy moving offices at work so I didn’t get around to dealing with this problem until Labor Day. The FedEx status didn’t change for days so I eventually used BodyBuilding.com’s online customer service chat to resolve it.

I tried customer service at about 11PM so I wasn’t expecting anyone to be there. And if someone was, they must have been in India.

Customer Service from India?

Once upon a time we accepted calling a big corporation and talking to “Steve” sitting in a room named “Ohio” in a building in Bangalore, India. Steve worked from a script. Any problem that couldn’t have been documented would take hours to solve–if at all.

I don’t know if more customer service has been outsourced to India or not. I know JetBlue takes a different approach and many other support lines I’ve called direct me to someone within the United States.

The person who I talked to from BodyBuilding.com customer service was named Kamikaze Candy. Strange? I’d say.

Odd name or not, I only care that my problem can be solved. So I proceeded to explain my issue and Kamikaze Candy fixed it. It was all very friendly and professional. My order was reshipped within 24 hours and arrived a couple of days later with gifts: a sample pack and a blue silicone wristband with the word TRAIN and BodyBuilding.com’s and RedLine Energy Drink’s logos.

I liked the wristband. Train means something to me. A lot of people workout: blindly going through the motions making little progress from day to day. I train.

FedEx came in the morning so I unpacked the box, put on the wristband, and went on with my day. Give me a meaningful gift and I provide some free advertising.

So far, the customer service has been pretty good. Of course, if this was all there was to it, I wouldn’t be writing this post at all.

Everyone Likes a Card

During Christmas, we write so many cards that most of them really have no meaning.

To XXX,

[Default Card Message]
Merry Christmas!

from,

Tommy

It’s pretty lame but, we all do it. At least the card’s picture is nice sometimes. Decorative.

In my mailbox today was a bunch of junk mail, something political, a bill, and a handwritten, card-sized envelop with my name on it. I threw away the junk and something political, put the bill aside, and opened the handwritten envelop.

The return address noted BodyBuilding.com so I knew where it was from but, I didn’t know why.

I opened it and inside was a card. A BodyBuilding.com branded card. I thought it was interesting. Maybe they were trying to sell me on something. The mountains of direct mail that make it to my mailbox have made me cynical.

I opened the card and inside was a handwritten message. It could have passed for a mass message with my name on it but, someone took the time to write it by hand. It was signed by Kamikaze Candy–that’s a unique touch.

Now, I still have a feeling Kamikaze Candy was in India and the person who wrote this card isn’t the same person I spoke to. I can’t know that for sure and maybe I am too cynical about direct mail but, it doesn’t matter.

I am still impressed that BodyBuilding.com did this. I’ve never had customer service send me a handwritten card after successfully solving my problem.

This is notable customer service. This is what gets written about and shared. And this is why I’ll be buying from BodyBuilding.com again instead of GNC or CVS.

When I was a kid, birthday and Christmas presents seemed so much more grand. Every year they got less and less exciting. I’m not excited at all these days.

I look forward to the drinking and friends on birthdays and it is usually incredibly entertaining–alcohol does that. The holidays still have a magical feeling but, it’s not about the presents–happens when presents suck more and more year after year; good thing for the holiday booze!

On these gift-receiving days, there were likely times where you got a gift that required batteries and the gift-giver didn’t include the batteries and times when they did. How annoying was it when the batteries weren’t there and you didn’t have any lying around?

Those 4 AA batteries really make a difference. It’s not that apparent when the batteries are there because everything went smoothly. But when the batteries aren’t there, you notice. The gift just isn’t as good. The experience from unwrapping to unboxing to play is disrupted by having to find batteries before play. It’s not the ideal experience. If you are giving a gift, why wouldn’t you want it to be as pleasant as possible?

You’ve already walked 990 steps of 1,000. Why not go the remaining 10?

While the difference may only be a few steps or a few dollars in quantitative terms, the qualitative difference is immeasurable. I still remember who always made an effort to include batteries in gifts.

These little details are what separates the men from the boys–or the women from the girls–in life and the professionals from the amateurs in business.

Most of the time, these little touches aren’t hard to do or inconvenient. Their payoff is so much bigger than the effort they required; their ROI is fantastic. It separates you from everyone else who looks just as good on paper and has just as much talent.

Sometimes, you aren’t going to win on sheer force of merit. That $500 gift without batteries might get left alone in the corner while the $50 gift with batteries gets all the play.

There’s no way to search by keyword at a store. I don’t see what other people also bought or what they bought instead. I can’t read reviews.

When it comes to the supermarket, packages of meat and vegetables don’t come with descriptions. I can tell the difference between beef, chicken, and pork. I have little knowledge of what each cut means.

It’s even worse in the vegetables section. I know lettuce, spinach, and that’s about it. Everything else is just more green stuff. And how to cook it? I have no idea! I eat my vegetables as a salad.

Reinventing Food Shopping

FreshDirect changes all of that–as well as ensuring I get fresh food and delivering it to my door. I can read about different cuts of meat, types of vegetables, what goes good with them, how they can be eaten, and how they should be cooked.

I’ll be the first to admit that I am not a foodie or an aspiring master chef. I just want my food to be relatively easy to prepare, taste good, and be nutritious. That’s really it.

FreshDirect is more than just the supermarket that delivers to me even though I do love that part. They also help me with what I do after I get the food. I’ve used FreshDirect for well over a month and it’s been great and I can say that I trust them; their brand is in good standing with me.

Because the FreshDirect brand is in good standing with me, I have tried new foods that I wouldn’t otherwise try and new brands that I wouldn’t otherwise try.

I am going to refer to this as brand transference. There might be another term for this but, I don’t remember any from marketing classes. The idea is as simple as the concept of guilty by association. Except, this is a positive association.

A Tea Story

I drink tea once in a while. Mostly because the only brand I am aware of is Lipton. My local supermarket does sell other brands but, I don’t know them from a hole in the wall. All I have to go by is price and their boxes–none of which is that appealing.

And since I can’t see reviews or get recommendations of which tea is good, I just go with the least worst choice price wise. I can’t even recall the name of the brand of tea I had bought last from the supermarket. It took me months to finish it and it wasn’t that good. I just assumed tea wasn’t that good–Lipton surely isn’t.

It wasn’t until I did a search for “organic tea” at FreshDirect that I found Yogi Tea. I trust FreshDirect to carry good products and there aren’t that many organic teas to choose from. Yogi had the largest selection and each type of tea was marketed for a different goal–detox, anti-oxidants, immune boost, etc.

I had never heard of Yogi Tea until I found them on FreshDirect. I bought a box. It was a simple and painless decision unlike when I’m standing in a supermarket aisle trying to choose between 10 different types of teas that all look similar with little descriptive differences.

I have tried 3 different boxes of Yogi Tea and even gifted one. I like their product. I may have very well seen Yogi Tea at my local supermarket or CVS and didn’t pick it up. There is too much clutter at the supermarket and I don’t trust my local supermarket to only carry good products.

My local supermarket has a neutral brand standing. I don’t love them and I don’t hate them. They are like a stranger and we don’t give much weight to suggestions from strangers. It’s our friends who we trust. They could be wrong but, we’ll trust them.

Word of mouth is a form of brand transference. The trust you have in your friend–the brand–is transferred to the product they recommend. If someone you dislike recommends a product, a negative feeling will be transferred to that product. Brand transference applies to the positive and negative.

Using Brand Transference

Word of mouth is no easy thing to bring about. You need to do something worthy of being talked about. And even then, when you think you’ve got something amazing, a lot of other people need to as well. Otherwise, no one is going to talk about it.

Why do cute cat videos go viral on YouTube? Is it really that amazing? Sometimes it is and sometimes it isn’t. There really is no reliable way to make something go viral–it’ll happen for all kinds of reasons, few of which are completely predictable.

Simple brand transference can be created reliably. Brands do it all the time. When a brand decides to sponsor a charity or a cause, that’s using brand transference. The positive feelings people have for the charity’s cause is transfered to the brand that is sponsoring.

Brand transference can also be used for brands that want to establish a certain image to associate with existing brands that already have that image. Partner with, co-sponsor, or otherwise cooperate publicly in some way.

Brand transference is a simple and easy means for any brand to adjust or build their brand image quickly and effectively.

I would be the first one to recommend going against the grain and doing what you want to do. Innovations don’t happen because we blindly follow someone else. The key is in knowing when you are really fighting the good fight and when you are just afraid of the coming tide.

Let’s take network TV for example.

The average age of TV viewers in the United States hovers at 50 years old. Either the population is growing old rather quickly or the much coveted 18 – 25 demographic is ignoring the television.

Sadly for those who refuse to change, both things are true. The US population is getting older with the 65+ demographic poised to account for 19% of the population by 2030. The 18 – 25 year olds are ignoring the television and we will continue to ignore the television.

The worst part is not only that young people adopting YouTube, Hulu, and other online sources for their video entertainment but, so are older people. Hulu’s rapid growth has been due to their expanding 35 – 49 demographic.

The problem for network TV isn’t that the younger demographic is leaving the television behind while a large, older demographic will stay behind. The issue is that the market for TV content on a TV is shrinking. Networks that can’t grasp this will see their ratings continue to drop. There will likely be one network left to pick up the pieces. There’s still a profitable market to be had–just not profitable enough to sustain everyone.

There are mega-ratings events that happen on TV several times a year in the form of the Super Bowl, Olympics, Oscars, etc. but, how long is that going to last? The younger demographic is still leaving the television. The demand for this content on a computer is there and it’s growing. A few mega-events throughout the year can’t sustain all the TV networks either. If that’s the plan, it’s not a good one.

The poor CW! Their shows target the exact demographic that is leaving in droves. I remember when they were The WB and UPN existed as well. I was not a UPN viewer but, I did watch a lot of shows on The WB. As The WB was dying and merging with UPN to form The CW, they were extremely hesitant to move their shows online when FOX, ABC, and NBC did so.

I remember this because I no longer wanted to or could schedule my time around their TV shows and I was still watching Smallville and One Tree Hill. They didn’t put their shows online. The thing is, I had not missed a single Smallville episode for 5 seasons. The show was already getting ridiculous–I hear it’s even more so now–but, I had some commitment.

Thanks to The CW’s shortsightedness, I picked up watching House and Bones on FOX’s website. Eventually Hulu arrived and FOX, NBC, and ABC all eventually put shows on it. I now watch shows from all those networks on Hulu. They get to advertise to me where they would otherwise have not had me as a viewer at all. I have not spied a CW show for years.

This goes the same for CBS but, CBS is obviously doing something right in their programming and I was never a big CBS viewer to begin with. I am aware that all the networks have online episodes in one form or another but, they moved too slow. I have already moved on to new shows and there is only so much time I have for watching TV shows. With Netflix’s catalog of streaming shows, I have little reason to go looking for new shows that don’t show up where I already watch.

It would be quite a joke to call The CW a major network. The only thing major about them is how majorly they lag in ratings. The WB was a different story. The WB had some of the highest rated shows including 7th Heaven. I can’t point to a single show on The CW with remotely the same drawing power. The WB was a great product for it’s time. It didn’t change with the times and merged with another lagging network–UPN–to form a still lagging network–The CW.

The CW is still a backwards thinker: ”In fact The CW stopped offering an online repeat for Gossip Girl in order to try to boost viewing figures.” The CW is fighting the tide for all the wrong reasons. Most of network TV has moved on and are continuing to move on.

Fighting to keep everything the same because you’re afraid of what’s coming is not a good fight.

None of them really care about you or even pretend to care. And honestly, you don’t have any loyalties to them. You’re shopping with whomever has a sale this week. It could be that one today and this one tomorrow. Whichever one is more convenient at the time.

There are some exceptions. Trader Joe’s comes to mind. I like Trader Joe’s. But, they’ve never wow-ed me.

When you are someone who reads Seth Godin‘s books and blogs, you come to believe that phenomenal customer exists but, you’ve never really experienced it. Almost frustrating.

That purple cow is really more like a unicorn. You’ve heard about it. Heard great things but, you’ve never actually seen one. You’ve seen horses but, not really a unicorn. Similar but, not quite there.

It’s hard to find but, once you find it there is no going back. Nothing else compares. Not having it will make you irritable; you curse out the morons who just don’t do it right. Much like the once-common disease known as female hysteria. Symptoms included: faintness, nervousness, insomnia, irritability, and “a tendency to cause trouble”. The treatment was simple: orgasm.

Let’s be honest, that does solve many problems.

So how do I know that this thing with FreshDirect might just be real? FreshDirect has a lot going for it. The food is amazing. Shopping for locally grown produce is exhilarating. Knowing that you could have driven to the small family farm where your food came from is oddly assuring.

Lab coat wearing scientists can say that the nutrition content is identical to traditionally farmed produce. I’d say their tests are obviously flawed. The food tastes different. It looks different. It is not identical. They can take their conclusions, turn it sideways, and stick it straight in their filing cabinets.

And if 2012 really does bring the end of the world, I’d like to know that there are farms around me. Apocalypse or not, I still have to eat.

You’ve probably also seen Food, Inc. I have. If you haven’t, you should. We can grow healthy, high-quality food without factory farms. Those who say it’s impossible are contradicting the fundamental way in which agriculture and factory farms came to be: the free market. People demanded food and we found a way to grow more of it using less and less space. Awesome.

Today, we want good food. The market will find a way. It always does. And it won’t destroy the planet as we know it because it’ll take 1000000x–guesstimate–the land to raise all these cows, chickens, pigs, etc. humanely and organically. Like I said, the market will find a way. If there is legitimate market demand, it will happen. For now, prices will be sky high. This is how the market works.

But, this love is not just about the food. I love the food. I do. But, there’s more. It’s Katie and Allie at FreshDirect.

My FreshDirect order was scheduled for the 11 – 1PM time slot. I got up at around 10. I was out last night but, not that late. I slept in anyway. I like doing that. It’s a Saturday.

I did my Saturday morning stuff: shower, breakfast, Facebook, etc. I was expecting a delivery any time between 11AM and 1PM so I took that as an opportunity to catch up on some blogs and other readings. I also let my Roomba do it’s thing–I’m delegating.

1PM came and went and nothing. No FreshDirect delivery. I figured they were running late. Then it was 1:45. Well, that’s quite late–I think that can be considered being stood up. So I checked the website and their FAQs. Late deliveries usually result in a call to notify you. Well, I didn’t get that. Maybe there was an issue? I sent Customer Service an e-mail.

They respond to e-mails in roughly 1 – 3 hours according to their site–in reality, they did it much fast. I took the wait time to clean my kitchen. I had to do it eventually so might as well do it while I’m in a holding pattern anyway.

I got a reply shortly:

I am very sorry to hear that your order #XXXXXXX did not arrive between the 11-1pm delivery timeslot you requested.

I have contacted the delivery team and they informed me that your order was scanned as delivered at 10:34am. Since the route is done for the day we were unable to confirm this with the driver. I suggest checking outside your door or with your doorman if applicable. If you are still unable to locate your order please call us at 212-796-8002 so we can investigate this issue further or set up a re-delivery  for another day. I am very sorry for the inconvenience.

I’d like to thank you for giving us the opportunity to help solve your problem.  If, for any reason you’re dissatisfied with how we resolved your problem, or need further assistance, please feel free to e-mail us directly by responding to this e-mail or call us at 212-796-8002.

Your satisfaction is our number one priority!

Sincerely,

Katie

The response was timely and personable. I can tell there’s template customer service copy but, a real person also wrote some of that. Unlike when I send my Senators a message and they send me back a blanket response of bullshit. Not so fond of that.

So I read that and went to check my door. I may have been in the shower at 10:34AM and if they got into the building without buzzing me then I would have never known.

I open my door and 4 FreshDirect boxes were staring at me. Awesome! I brought them in and unpacked everything. I then went to send a reply to customer service to let them know that it all worked out fine.

hey Katie (or whomever this reply gets to in customer service),

My order was stacked outside my apartment. lol, thanks. I was just expecting to be buzzed and all that. My building door hasn’t been functioning correctly recently so I should have guessed.

Anyway, thanks a lot! Came in perfect condition as usual!

So, I was totally fine with what happened. I’m not new to deliveries. UPS and FedEx screws up every once in a while. USPS screws up about as much as they successfully deliver a package–standard government quality.

So I thought that was that. I wanted to let them know that everything was fine since Katie actually took time to give me real suggestions. I figured someone would probably read it and file it away. That’s not what happened. And that’s how you wow a customer.

A while later, I got another reply from FreshDirect customer service saying this:

Thank you for emailing FreshDirect. I am sorry to hear that your order was left unattended.

Upon reviewing your account I see that your order was delivered at 10:45am. I have issued a store credit in the amount of $5.79, for your delivery fee. You will receive an email regarding this credit once it has finished processing and ready to use.

I’d like to thank you for letting us know what occurred and giving us the opportunity to help solve your problem. If, for any reason you’re dissatisfied with how we resolved your problem, or need further assistance, please feel free to e-mail us directly by responding to this e-mail or call us at 212-796-8002.

Your satisfaction is our number one priority!

Sincerely,
Allie

Honestly, I had no expectations. I thought my order was fine. What I ordered arrived in a condition I expected. All was well. FreshDirect didn’t need to do anything more and this blog post would have never been written.

Any marketing student who paid attention in their CRM class can tell you about perceptions and expectations. This is classic exceeding of expectations. It’s simple and it works.

I’m pretty confident Katie and Allie didn’t go to work today expecting to be written about in a blog later that day. But it happens when you wow your customers. Zappos is the classic case study of delivering happiness. I have never shopped with Zappos so I can’t attest to anything. Certainly, if Zappos does an even better job that FreshDirect then I don’t know if I can handle it.

(Okay JetBlue, I like your customer service too–just in case you were getting jealous there. And Virgin–I like you too.)

Aren’t we all just used to terrible customer service? The person tasked with servicing you is either a robot or is reading a script as if they were a robot. You know, “unplug your modem, wait 10 seconds, and plug it back in”. That kind of customer service. You’d think that after all the years of telling customers exactly that, they’d figure we probably already tried that one before waiting 40 minutes.

And so for all those reasons, I think I may be falling in love with FreshDirect. Can you blame me? :)

Some of us are of the  mindset that things will get back to normal once we hit that corner–back to being employed to do almost nothing and to do it only slightly better than the lowest common denominator. That is never coming back. That way is over.

People need to wake up. We aren’t. At least, not all of us are. I recently saw this on my Facebook feed:

This is the mindset that you just need to ride out the recession. Spend the minor effort now when nothing is going on anyway to put things that look good on your resume. This is an “easy job, looks good on resume”. Doesn’t say anything about what you would learn–if anything. An internship that nets you no new knowledge is about as good as doing nothing.

I’m not criticizing the person offering this position. I’m criticizing the attitude behind it. This attitude is too prevalent. There are a lot of people who believe that things will return to the way they were. But it won’t. The resume is dying.

In a time not too far from now, a resume will be useless. It is almost useless today. I see plenty of people who look good on paper but, can’t do any real work to save their lives.

You don’t need to build up your resume with activities that aren’t too different from wasting time. You need to build up your Google-ability. Do work that can be found. Do work that is meaningful. That you can point to and be proud to say that you were a part of it.

You don’t need an easy job that looks good on a resume.

And this isn’t just a matter for guys. There’s a popular book titled Nice Girls Don’t Get The Corner Office. I haven’t read the book but, the title pushes the idea that being nice is a negative.

I think the problem lies in how we define “nice”. That word has been used to describe me countless times at countless ages. I’ve heard it a bit often recently. And it’s probably true, I am nice.

But then, there’s those who are “nice”.

There are people who are “nice” because they want something from you. I never want anything from you. Whatever I do, I do it because I want to do it. No strings.

There are people who are “nice” because they have no opinions of their own. They’ll do whatever you say. They aren’t nice, they are weak. I’m thoroughly opinionated and possibly hardheaded. I’ll listen and try to understand where you are coming from but, I will not change my mind simply because you don’t like my point of view. Tough luck.

There are people who are “nice” because they want to known as being nice. They are about as fake as it gets. They are nice and cheery on the outside and plotting your demise on the inside. They’ll resent doing that favor for you but, show you nothing but smiles while doing it.

Who would like to deal with any one of these “nice” people in business or in personal relationships? Let’s be honest, no one likes a con-man, a push-over, or a fake. Whether they want to disguise themselves behind a veil of “nice” is irrelevant. They aren’t what they seem.

There are the truly nice. The truly good. Those who do good things because it’s a good thing to do. Those who believe in themselves and are perfectly okay with others disagreeing. Those who will tell you like it is because that’s what it is. They won’t con you, bore you, or lie to you.

And they do get ahead. In every aspect and with a clear conscience.

No great ideas came about by themselves. Individuals are credited with being the first to invent or discover something but, that ignores all the work that had gone before to make it possible for this one individual to get there.

It is impossible for the first man to invent a pencil on his own no matter how smart he was. Firstly, he wouldn’t have any time left to invent after he’s done hunting and gathering. The sole effort of getting enough to eat takes up most of the daylight hours. The rest of the time is used to ensure that wild animals don’t kill him at night.

The only way for him to get time to do things other than find food and have a safe shelter is to cooperate with another person. One person finds food and the other builds a shelter. At the end of the day, both have food and shelter in half the time it would have otherwise took them to do it alone.

This is no new revelation. Economists call this comparative advantage. You trade one thing for another. In this case, these two primitive humans are trading food for shelter and vice versa. Both are better off.

In fact, there is no other way for humans to prosper.  There is nothing as uniquely human as trade. Trade is why we are the most dominate life form on the planet. It is why other species of upright apes are no longer with us. They didn’t trade. We did.

No other creature on the planet trades like we do. You never see a dog offer another dog a bone for a rope. It is an idea that is inconceivable to them.

Modern society is built on top of the idea of trade. Everything from our computers to our food is made possible by trade–the trade of goods, services, and ideas.

This blog software that I use came about by the contributions and ideas of thousands of people. Most of whom I will never know. The design, the technology, and the architecture has been built over time little by little. Idea by idea.

They are then glued together by a much smaller group of people to create a tool that has enabled millions of people to write about the mundane to the world changing.

This happened because a lot of ideas had a lot of sex.

The trend from 2007 show a steep decline in employment for college graduates. In 2007, 51% of college graduates who applied for a job had one in hand by graduation. That number went down to 26% in 2008 and stands at 19.7% in 2009. With another year of graduates joining the prospective workforce, I can’t imagine this number getting any better.

Unemployment for college graduates is officially determined to be 19%. That really isn’t the situation I see on the ground. When we account for those who have given up, taken part time jobs, or taken jobs that have nothing to do with their intended career, the number is much higher.

Then there’s the reports of recent college graduates seeing lower salaries for years to come. There’s really no good news anywhere. But, you didn’t need me to tell you this. You aren’t reading this because everything is rosy.

What to Do?!

The situation isn’t entirely hopeless. The pipe dream that a lot of us had has been shattered into a million pieces. We now know that a college degree isn’t going to guarantee us a job. That piece of paper is only slightly better than meaningless.

We need to change our mindset. The economic ground isn’t shifting beneath us just because of the Great Recession. It has been shifting for a while now. The economic crisis just made it more apparent.

It would be misguided to believe that all will return to what it once was if we just ride out this recession–or possibly depression. The world as we knew it is gone. That college degree won’t guarantee you’ll get the job you want making the money you want.

The great game changer isn’t the recession. It’s social media. You hear about it all the time and how it’s changing the landscape for businesses. What you haven’t heard is that you need to adapt to this landscape as well.

The traditional resume is on its last breaths.

It’s About Google-ability

For many years now, employers have Googled prospective employees and we’ve Googled prospective employers. It did not used to matter as much if we couldn’t find each other online. That has changed drastically. If you can’t be found online, you might as well not exist.

At the very least, you should have a LinkedIn profile. There’s no benefit to not having one unless you intend on being invisible.

People are networking online. MeetUp.com is used to arrange offline networking events. How would you even know about these events if you aren’t up to speed?

YourName.com

You should own it. It costs about $10 a year from GoDaddy. It’s even cheaper from some other places but, GoDaddy is a brand I trust. One of the ways to have your name come up first or within the first 10 results in a Google search is to own yourname.com.

If you’ve got nothing to put on your website, redirect it to your LinkedIn profile. The idea is just to own yourname.com. You can find real use for it later. For now, just get it before someone else does.

Ideally, you’d want to be a thought-leader in your chosen field or niche. Realistically, this isn’t going to happen overnight. But, you have to start somewhere! Set up a blog at yourname.com and start sharing your thoughts on your field.

If you don’t have anything to say, perhaps, you need to do more reading about your field?

Keeping Up With the Blogs

There is likely to be a wealth of information for your field online right now: blogs, YouTube videos, Wikipedia entries, news articles, tweets, and more. If you aren’t keeping up with any of that, you need to get started.

Blogs are easy to keep up with. Instead of reading the daily newspaper with yesterday’s news, subscribe to a bunch of blogs in your field on Google Reader. You might not be able to differentiate the good blogs from the bad ones if you are completely unfamiliar but, subscribe anyway. You can always unsubscribe once it becomes clear any particular source is no good.

Google Reader will also recommend sites to subscribe to so as long as you can pick a few on your own, Google will help you out. Make it a habit to catch up on what the blogs are reporting and talking about daily. Things happen quickly on the internet.

Ship.

This is a term that Seth Godin has been pounding in. And it is damn important. You need to ship. Being fresh out of college, you probably have no practical skills to speak of. So, what are you shipping?

Start small.

Publish a blog post. Make it a blog post about research that supports a point you want to make. Or just make it about the research. Everyone can use research. You did just graduate from college so, at the very least, you can do research. Right?

Get A Skill

Whatever it is, find one. Preferably a skill that relates to the field you want to pursue.

Get some technical skills too. You are competing for jobs with dinosaurs. Okay, not really dinosaurs but, older people. They’ve got a ton of experience. Now, they find themselves jobless too. But, they have skills. They’ve been there and done that. You haven’t.

You do–or at least can–have an advantage. You’re young. You know the technology better than older folks. You can’t compete with them on sheer experience. You just don’t have much. But, you do have a natural understanding of how technology works. You practically grew up with it and use it daily. Advantage: you. Sharpen that advantage and exploit it.

Go Do It

Now you know what to do. So, go do it. Don’t stop sending out resumes. You never know which one might stick but, that shouldn’t be your only strategy. Do the other things mentioned above. It can’t hurt and besides, what else do you have to do?

Look for internships. In this economy, there’s going to a lot more unpaid ones than paid ones. Now is no time to be picky. Internships are less likely now than before to result in a job afterwards but, you won’t gain any more experience rotting away at home.

Yes, this is a lot harder than you thought it would be. Unfortunately, you graduated alongside the worse economic crisis in modern history. It’s sad but, it is what it is. Time to get to work. :)

UPDATE: There’s a ton of job hunting sites like Monster, CareerBuilder, etc. SimplyHired has just enabled a feature that helps you find jobs at companies from within your social network. While you’re busy building or already have built a strong social network, you can use this tool to help you find that job! Welcome to the future.