Start Me Up or Wind Me Down?

Toronto – Canada

Being a fairly recent grad and with the economy the way it is, us young go-getters are always thinking about the best way to get a leg up on the competition and how to fire away into a bright, bright, future. For obvious reasons landing that first job is pretty crucial in setting you up for future success, or so it seems. A recent conundrum I’ve encountered is whether it is better to work at an ambitious start up, or get a job working for the big dogs right off the bat.

I’ve always been a supporter of the under dog, so I’m prone to supporting the start up. In general, everyone should work for a start up at one point in their lives. Start ups inherently must fight for every piece of the pie in order to gain market share, this “spirit” permeates throughout the organization and can lead to a more entrepreneurial nature within the employees. Also the idea of getting a slice of the pie leads start ups to occupy niches or have very unique specializations that larger companies cannot have.

Yet one of the most important characteristics of start ups might be the ability to make mistakes. They are curious and experimental in nature leading them to teach valuable lessons in short spans of times. Larger more established firms may be more risk averse, preventing them from pursuing opportunities where others see it. Assessing and supporting a risky business move, can be a difficult and expensive lesson to learn, being able to partake in that opportunity early in your career can be a great opportunity.

Working at a big company obviously has its perks as well. The pay is probably better, there is more job security and you undoubtedly will be amongst professionals with a high standard of work. You will gain valuable “work experience”, but it you might miss out on that dose of “life experience”.

Thats why I say take the plunge early, work for a young exciting company, where you can affect the future and help move it in the right direction. If you do a really good job, you just might turn your “start up” into a big company as well : )

International Airports – Where Aspiring Brands Come Alive

Toronto – Canada

Recently, while embarking on some travels through Southeast Asia, and a pleasant stop over in the Hong Kong airport, I got bored and then I got to thinking. As I wandered throughout the airport I realized how golden of an opportunity it is for aspiring and established brands to position themselves to a global audience. It is also where reinforcing brand image pays off, as I can attest from personal experience.

“Hmmmm, which international, aspiring brand should i buy??”

Placing your brand in an airport is a very strategic and logical step if your goal is to reach a jet-setting, impressionable demographic. Especially considering that it may be the first time that some people even see the brands in person.

I have even heard a story, where a Russian business man traveling outside of Russia for the first time since the fall of the Soviet Union, was so excited to purchase a Coke, because of everything that it symbolized – such as freedom and the American way of life. When he went to open it the tab popped off and he was left holding an un-openable can of Coke. But a man that survived the Soviet Union would not let a faulty tab stop him, he simply stabbed the top with a pen and guzzled the whole thing down. No problem. I’m sure that many others feel a similar way when they see certain brands. Can you remember the first time you saw and were able to hold Louis Vuitton, or Burberry?

Having a presence in international airports makes sense because you are able to position your brand as international and exclusive but also to reach a global audience. Even if it does not result in direct purchases it could even be considered a type of advertising. Since this strategy is undoubtedly quite expensive, it is not surprising that most “airport brands” are of the luxury variety.

Another point to consider is how a brand’s domestic advertising can pay off at an airport. This I speak form personal experience. I myself was seduced by McDonalds. Yes it’s sad, and I am slightly ashamed, especially since I consider myself quite an adventurous eater. Nonetheless I can justify my experience as an experiment.

The thing about McDonalds is consistency. It prides itself on the same level of service, and taste no matter where you are in the world. This is definitely true. At a time when I was travelling and in need of nourishment that I knew was reliable and tasty, I knew exactly what I would get by going to McDonalds. So while McDonalds does adjust to national flavours its overall global mass appeal does have its benefits. I was pretty happy until a big glob of grease popped onto my face from my McChicken, enthusiasm did not ensue.

Besides the actual thrill of being at an airport because you are traveling, its always interesting to take a look around and see the brands that are making a push, that are aspiring to position themselves as international to a global audience.

Goldman Sachs’ Renegade Twitter Feed

Toronto – Canada

Investment bankers do not have a growing list of fans around the world, you just need to look at the thousands of occupy protestors to see that. Yet there is one segment of the investment banking world that has a growing fan base…the Goldman Sachs Elevator (GSE) twitter feed. Twitter, the social media phenomenon that brought you the Egyptian revolution and Lady Gaga now lets you into the macho, fist pumping, money bending, and apparently comical world of Goldman Sachs.

Goldman Sachs, we're seriously quite funny.

Turns out a Goldman Sachs employee has been tweeting some of the more comical and offensive banter heard around the office. The tweets are often egotistical, self absorbed, slightly sexist and definitely not politically correct. Goldman Sachs has apparently launched an investigation to find the source of the tweets, but has had no luck so far. There is a contingent of observers who have commented that the account isn’t actually from an employee, and likely from a vigilante tweeter with a sense of humour. The whole situation becomes even more comical when you imagine that Goldman Sachs will begin terrorizing their employees in pursuit of a “tweeter” that doesn’t even work for them.

Whether or not the tweets are authentic is immaterial because they capture the less savoury mentality of investment banking in a way that is comical and seems to reflect some public sentiment. This wouldn’t be the first time an insider has spilled the beans about what happens in an investment bank – its already a winning formula. It helped Michael Lewis sell his books. All he had to do was transcribe many of his conversations to paper. It revealed a type of black humour normal to insiders, but completely startling to outsiders.

Besides the tweets making a very subtle social commentary, the whole situation has important implications on the use of social media. One is that perhaps social media can become an anonymous whistle-blowing device for frustrated employees. Secondly if the account is fake, how do you stop someone from misrepresenting your company?

Although the tweets have punch lines that are more likely to be from a comic rather then an analyst, some of them could be authentic. We’ve all heard something funny at work before. It makes me think that if things don’t get better in finance these Goldman Sachs employees could fall back on a career in comedy.

Dinner for One, the Future of Europe?

Toronto – Canada

No one likes to eat dinner alone, and celebrating your birthday alone is even worse, in fact people will go to great lengths to avoid this problem. There is an old British sketch comedy from 1963 where a Miss Sophie celebrates her 90th Birthday with her Butler James for company. Miss Sophie commands James to circle the table and impersonate her now-dead dinner guests by proposing toast after toast. Sounds funny doesn’t it? I’m sure you’re not rolling on the floor laughing, but according to The Economist this is a popular sketch that Germans watch on New Year’s Eve.

In light of the continuing crisis in Europe the German television network ARD did a lighthearted spoof of the British sketch by superimposing Nicholas Sarkozy’s face on the butler’s and by having Mrs. Merkel as Miss Sophie. The sketch has Sarkozy rounding the table impersonating George Papandreou, Jose Zapatero, and David Cameron. Silvio Berlusconi has the dubious honour of being a tiger-skin rug that is always getting in the way. In his toasts Sarkozy makes various jibes at the mismanagement of the EU crisis and continually tries to persuade Mrs. Merkel of the virtues of Eurobonds, but just like in real life it is to no avail.

Below is a link to the original Dinner for One:

Greece to Europe – Should I Stay or Should I Go?

Toronto – Canada

At a time like this it is impossible not to write about the events unfolding in Athens. Prime Minister Papandreou has been orchestrating his country through a modern Greek tragedy that would make Oedipus scratch his head. This story has more angles then a Picasso painting but the most important element will be its implications on the viability of the European Union.

A look inside the meeting of G-20 members as they discuss the Greek situation, photo courtesy of Alyssaravenwood.com

As of now the specter of a referendum has faded due to Papendreou’s flip flop a la John Kerry. Had the Greeks voted against the bail out package it is quite certain that the EU’s strongest members (Germany, France) would have considered kicking Greece out of the EU. Although this has become less likely it may have started an important dialogue regarding countries that cannot stay within their budget deficit. As of now the EU has no punitive mechanism for countries who cannot reign in their finances, therefore there is no incentive for countries to stay within the EU budgetary parameters, a malaise seen in Italy, Portugal, Spain and Ireland. It may be too late to be having this conversation, almost like discussing a prenuptial before signing your divorce papers, just ask Paul McCartney.

Which leads me to my next question, “should we just stay together for the kids?” Is it worth it for the EU to spend billions, if not trillions on supporting Greece for the next couple of years, or should they just cut them loose? If Greece does not accept the bailout package, the money could be better spent bailing out French and German banks and making sure the stronger economies remain that way.

The argument for this would be that if all the bail out money goes to Greece then banks in other parts of Europe will take a serious loss on their Greek bond investments (which will not be paid out). If Banks take a loss they have less credit, less credit means businesses and consumers suffer which leads to less economic growth. So not only will Greece be suffering but so will the rest of the EU.

The interconnectedness of the EU economy has been touted as one of its strengths but presently it looks like a major weakness. The current situation stands as one of the most important tests of the EU experiment, if Greece goes will there be others? Or if Greece is bailed out will there be others? It is a mess. The worst part is that the EU has no previous mechanism to answer these questions, it is lost at sea and the crew is fighting over the steering wheel.

CN Rail and the Economy – And Who Said Logisitics was Boring?

Toronto – Canada

In this age of globalization where goods are shipped internationally to various markets it makes sense that trade will be a reliable indicator of domestic and international economic performance. Certain commodities such as steel if imported in large quantities to a certain country suggest a construction boom, but what about other indicators such as logistics? In a candid video interview Howard Green of BNN discusses with Claude Mongeau the CEO of CN Rail how CN Rail’s business reflects the performance of the Canadian and global economy. Find the link to that interview here.

CN Rail does not just ship goods, it is a shipper of the economy, and Claude Mongeau reveals that to run a railway you need to know whats going on and where it’s happening. In the interview Mongeau speaks in a calculated and deliberate manner about: how today’s economic worries are different from 2008, how the movement of goods is reflecting the source of economic activity and CN Rail’s growing market share.

Thankfully, Mongeau responds to Green’s question about how today’s economic woes compare to those of 2008 with some appeasing facts. Firstly, he mentions that CN is experiencing steady shipping in heavy industrial goods, which means that there have been no major fluctuations in the market so far. Mongeau also discusses how in 2008 inventory was piling up due to a lack of demand, but presently that is not the case as companies are keeping a consistent, “tight” level of inventory. This means that companies have either streamlined inventory warehousing or that there is indeed a consistent demand.

There is a remarkable part in this interview where Mongeau discusses the proportion of shipments that are Asia bound. He mentions that about 31% of CN’s business is exports to Asia and that it is the fastest growing segment of CN’s business. Mongeau goes on to qualify why he believes this export growth will be sustained, stating that demand in China for raw materials is based on domestic needs rather than for export based manufacturing. This means that demand for Canadian raw materials will not be affected if China exports less globally since the goods are for domestic consumption. The growth of Canadian exports is an important indicator as it shows the shift of Canadian trade to emerging markets and the growing viability of Canada as a trading partner with those countries. This trend has also been corroborated by Export Development Canada (EDC) which has been promoting Canadian companies to do business abroad.

Most importantly, the rise in exports has played well into CN’s hands, however there are other factors that have helped to boost the company into an enviable position such as fuel prices and network integration. Currently, rising fuel prices and congestion have made rail a more cost effective mode of transportation. Besides saving on fuel CN has managed to add more value to their network through intermodal transportation, meaning that shipments are no longer bottle-necked in ports and freight yards, thereby reducing shipping times.

All in all, this interview was very insightful as to how logistics can be a barometer for economic performance. Mongeau shows that he has a good grip on the interconnectedness of politics and economics and how his company can add value to its customers. So next time you are stuck watching a CN train go past you might think that a longer wait is not such a bad thing after all.