Posts Tagged ‘Money’


Excellent article on the fallacy of the middle class in #Venezuela and how the current situation is eerily similar to 1989, with a huge discrepancy between the expectations of the people and the current economic reality.

Cadivi dies, and so does the middle class

(Since Cadivi is gasping its final breaths surrounded by controversy and not a minute too soon, this guest post by Iesa professor Pedro Luis Rodríguez could not be better timed. Rodríguez takes on Javier Corrales’ assertion that we’re mostly middle class, and concludes that it was all a mirage. Take a read and let us know how you view this debate)

Venezuela’s Middle Ground: now you see it, now you don’t

In a recent article in Foreign Policy, Javier Corrales argues that Venezuela today is a country of “mostly middle-class people”. Following the World Bank’s income thresholds for determining class membership, Corrales classifies each income decile in Venezuela into their respective class.

I’ve replicated his table following the guidelines in the appendix to his article (see Table 1). It is evident, as Corrales highlights, that by this measure in 2012 the majority of Venezuelans belonged to the middle class. Moreover, the distribution differs markedly from 1990 as a result of a large portion of the poor crossing the middle class threshold during the recent windfall (especially post 2005).

Corrales

Corrales correctly points out that once we agree that Venezuela is a middle class country, then deriding the recent wave of protests as “too middle class” is absurd and, in the case of the government, a political blunder. What else would one expect in a middle class country but middle class demands, including demands for better governance outcomes and representation?

The other half of the story

Yet Corrales’ table shows only half the story. In a country highly dependent on oil revenues, defining social progress solely in terms of income is problematic as we run the risk of confusing a temporary increase in consumption, financed with oil revenues, with a permanent increase in welfare. The only way the latter can be achieved is through sustained increases in productivity.

There is little doubt that the oil bonanza of the past decade and the government’s (re)distributive policies increased the income of the poor in Venezuela, swelling the middle class, at least as defined by the World Bank’s income thresholds. But to the extent that these outcomes are not the reflection of increased productivity but rather of increased consumption financed by high oil revenues, they are highly dependent on the incremental (not just continued) flow of this revenue. Once this flow becomes strained, as has been occurring since 2013, the model not only becomes unviable, but its apparent achievements can quickly be wiped out.

To get a sense of what this would entail, I reconstructed Corrales’ table using the World Bank data on GNI in local currency, converting it at the black-market exchange rate and applying the same PPP and inflation adjustment as in table 1 (see Table 2). While at the official exchange rate, Venezuelans’ incomes are indeed those of a middle-income country, at the black-market exchange rate this no longer holds. In this picture the majority of Venezuelans are poor.

Which picture is right? This depends on the capacity of the government to maintain its distributive policies including an overvalued exchange rate, which in turn depends on sustaining a steady supply of dollars. While Table 1 is likely a more accurate representation of income distribution in Venezuela between 2004 and 2012, I would argue reality is rapidly converging towards the second picture (Table 2), as the supply of dollars shrinks and becomes erratic.

Rodriguez

Some will correctly point out that the black-market exchange rate is not a proper measure of the market exchange rate one would see if it were allowed to float. In reality, it would be somewhere in between the official rate and the black market one (estimating this is not straightforward).

This deserves two comments: first, at this moment, as the government prevaricates in its economic policy, it is forcing the picture to look much more like Table 2 than need be, as goods are priced at the black-market rate for lack of access to dollars, or are simply non-existent. Second, Table 1 is but an illusion that is unraveling, with the trend nowadays clearly in the direction of the second picture. Whether we ever reach it or not is inconsequential for the argument that follows.

Yes, many Venezuelans, and most particularly the poor, managed to climb up the income ladder as a result of the government’s distribution of the oil bonanza. In particular, as has also been common in previous governments, through the use of an overvalued exchange rate. Yet, as dollars have become scarce for reasons that are beyond the scope of this article, the precariousness of these outcomes becomes manifest.

The income ladder has not only been withdrawn, but those that had climbed up are being pulled back down. I would posit that this, rather than middle class demands, explains the growing discontent, part of which (although far from its entirety) has expressed itself on the streets in recent weeks. Whether the “new” middle class identifies itself with traditional middle class demands of better governance and representation remains to be seen. The speed and means through which this change in incomes occurred – distribution of rents rather than productivity – arguably suggest the contrary.

That is not to say however, that the focus of the opposition’s discourse should lie on unsatisfied basic needs rather than demands for accountability, representation and political and economic freedoms. The challenge lies in explaining how the scarcity of the latter explains the abundance of the former.

Is this really so different from 1989?

Unfortunately the data on income distribution is not readily available, yet we can still look at mean income (in constant 2005 international $) measured at the official and black market exchange rates (see Figure 1). The widening gap between these two measures is evident since 2004. Yet we see exactly the same pattern in the period preceding 1989. As in 1989, what we are observing today is the confrontation of inflated expectations, formed over a period of bonanza and grand promises, with an increasingly grim reality.

In 1989 the consequences of this confrontation were traumatic. This time around, the gap between expectations and reality is I arguably much larger, and hence the potential for an explosive outcome much greater. A lot depends on how the government confronts its economic demons, although it might already be too late. If this narrative is correct, we have only seen the tip of the iceberg when it comes to discontent taking over the streets. Are the paramilitary groups known as colectivos enough to contain this?

Rodriguez 2

Mirages in the desert

To be clear, the proposed narrative is not inconsistent with Corrales’. It could very well be that the swelling of the middle class observed over the past oil boom led to the emergence of middle class demands for governance and representation. It should be possible to see this in surveys such as Latinobarómetro.  The narrative above however does claim that the main source of discontent brewing today is the result of the confrontation of inflated expectations with a dismal reality. This discontent is not so different from that which led to social unrest in 1989.  Venezuelans are once again at that point when the mirages created by the bonanza disappear, leaving them in the same desolation they found themselves in over twenty years ago.

The question that remains is whether the opposition is able to offer a way out of this vicious cycle. To do so, it must explain why we are where we are, and provide a credible vision of how we are going pull ourselves up by our bootstraps rather than hold on to vain hopes of a new bonanza. We all want the first picture to be true (Table 1). Indeed we want all blocks to be colored red or grey.  Yet the only way for this to be sustainable is via a continued increase in productivity. Our oil income can be an instrument in this endeavor but it can never substitute for our effort. Whether we’ve understood this remains to be seen, otherwise we will keep grasping at mirages in the desert.

04/26/2014

Pedro Luis Rodríguez

Assistant Professor – IESA/UCAB

@prodriguezsosa


>

Liveable v lovable

The FT asks a very good question, Why is it no one really wants to live in the most liveable cities? 

…The polls underlines the fundamental fault that lies at the heart of the idea of measuring cities by their “liveability.The most recent surveys, from Monocle magazine, Forbes, Mercer and The Economist, concur: Vancouver, Vienna, Zurich, Geneva, Copenhagen and Munich dominate the top. What, you might ask, no New York? No London? No LA or HK? None of the cities that people seem to actually want to emigrate to, to set up businesses in? To be in? None of the wealthiest, flashiest, fastest or most beautiful cities

“These surveys always come up with a list where no one would want to live. One wants to live in places which are large and complex, where you don’t know everyone and you don’t always know what’s going to happen next. Cities are places of opportunity but also of conflict, but where you can find safety in a crowd.
“We also have to acknowledge that these cities that come top of the polls also don’t have any poor people…” 

Liveable usually does not mean the most dynamic…

… can someone coming from somewhere else improve themselves, reinvent themselves? Is there upward mobility? The top cities score badly again. London and New York are magnets for immigrants precisely because they allow those kinds of new beginnings

The common criteria of What makes a city great for all these surveys are:

Blend of beauty and ugliness – beauty to lift the soul, ugliness to ensure there are parts of the fabric of the city that can accommodate change.

Diversity – if lots of people are wanting to come to a city, there must be something there. 

Tolerance – the only way diversity works but also an accommodating attitude to sexuality (gay communities are famously successful inner-city regenerators) and religion (there are signs of increasing intolerance towards religious minorities all over the world). 

Density – density of habitation is crucial in ensuring density of activity, a vibrancy of commerce, residential and cultural activity. 

Social mix – the close proximity of social and economic classes keeps a city lively. 

Civility – impossible to measure and slightly against my stated notions about the benefits of friction but critical nevertheless. I once criticised the ingratiating politeness in the US and was told by an American who used to live in Paris that “it’s better to be told to have a nice day by someone who doesn’t mean it than to be told to go f*** yourself by someone who does”. Discounts any Israeli or Russian city from ever getting on the listEH

Read the whole article here 

Liveable v lovable 

By Edwin Heathcote FT.com

Published: May 6 2011 17:52 | Last updated: May 6 2011 17:52
A collage of city monuments and landmarks
Vancouver is Hollywood’s urban body double. It is famously the stand-in for New York, LA, Seattle and Chicago, employed when those cities just get too tough, too traffic-clogged, too murderous or too bureaucratic to film in. It is almost never filmed as itself. That is because, lovely as it is, it is also, well … a little dull. Who would want to watch a film set in Vancouver? To see its skyscrapers destroyed by aliens or tidal waves, its streets populated by cops and junkies, its public buildings hosting romantic reunions? Yet Vancouver (original name, Gastown) has also spent more than a decade at the very top of the charts of the best city to live in the world. Can that really be right?
The big cities it seems, the established megacities of the US, Europe and Asia are just too big, too dangerous, too inefficient. So what do these top cities have in common? How exactly do you measure “liveability”?No. Not at all. In fact, Vancouver’s boringly consistent topping of the polls underlines the fundamental fault that lies at the heart of the idea of measuring cities by their “liveability”. The most recent surveys, from Monocle magazine, Forbes, Mercer and The Economist, concur: Vancouver, Vienna, Zurich, Geneva, Copenhagen and Munich dominate the top. What, you might ask, no New York? No London? No LA or HK? None of the cities that people seem to actually want to emigrate to, to set up businesses in? To be in? None of the wealthiest, flashiest, fastest or most beautiful cities? Nope. Americans in particular seem to get wound up by the lack of US cities in the top tier. The one that does make it is Pittsburgh. Which winds them up even more.
So that’s the mountains, lakes and huge cups of generic coffee accounted for. Then there’s efficient public transport (that faint whoosh is the sound of London, NY and LA disappearing). There are also cultural institutions, global connectivity, green urban policies, well-designed housing within an easy commute, and so on. Each determinant on its own seems an indisputably good thing. But what do they mean together? Can Munich (Monocle’s Number 1) really be one of the best places in the world to live? On a Sunday afternoon?All the surveys use an index. But what is on it? “There’s always proximity to nature,” says Tyler Brûlé (editor of Monocle and patron saint of liveable cities and airport lounges, whose column appears weekly in the FT’s Life & Arts section). “Global connectivity is important, education and we’ve recently added chain store metrics – is there a Starbucks or a Zara?” he says.
To even begin to understand how these slightly unsettling results are arrived at, we need to understand who compiles them and who they are for. The lists are made by well-travelled academics, researchers and journalists for corporate, media and creative executives on generous expense accounts as well as other academics enjoying grants and stipends. And, of course, by Tyler Brûlé.
Most of these people are profoundly concerned with things like well-designed street furniture, a proliferation of eye-wateringly expensive artisanal retail, boutique hotels with good (English-speaking) service and environmentally friendly mayoral policies. Certainly these are all things which help but they skew the polls to a particular type of European or marginal Pacific city. What they also do is to strip out all the complexity, all the friction and buzz that make big cities what they are.
I spoke to Joel Kotkin, a professor of urban development, and asked him about these surveys. “I’ve been to Copenhagen,” (Monocle’s Number 2) he tells me “and it’s cute. But frankly, on the second day, I was wondering what to do.” So, if the results aren’t to his liking, what does he suggest? “We need to ask, what makes a city great? If your idea of a great city is restful, orderly, clean, then that’s fine. You can go live in a gated community. These kinds of cities are what is called ‘productive resorts’. Descartes, writing about 17th-century Amsterdam, said that a great city should be ‘an inventory of the possible’. I like that description.”
Joel Garreau, the US urban academic and author, agrees. “These lists are journalistic catnip. Fun to read and look at the pictures but I find the liveable cities lists intellectually on a par with People magazine’s ‘sexiest people’ lists.”
Ricky Burdett, who founded the London School of Economics’ Cities Programme, says: “These surveys always come up with a list where no one would want to live. One wants to live in places which are large and complex, where you don’t know everyone and you don’t always know what’s going to happen next. Cities are places of opportunity but also of conflict, but where you can find safety in a crowd.
“We also have to acknowledge that these cities that come top of the polls also don’t have any poor people,” he adds. And that, it seems to me, touches on the big issue. Richard G Wilkinson and Kate Pickett’s hugely influential book The Spirit Level: Why More Equal Societies Almost Always Do Better (2009) seems to present an obvious truth – that places where the differential in income between the wealthiest and the poorest is smallest tend to engender a sense of satisfaction and well-being. But while it may be socially desirable, that kind of comfort doesn’t necessarily make for vibrancy or dynamism. If everybody is where they want to be, no one is going anywhere.
“Sure, Vancouver is beautiful,” says Kotkin, “but it’s also unaffordable unless you’re on an expense account and your company is paying your rent.” Burdett agrees: “Economically all these cities at the top of the polls are also in the top league.” In fact, it can often be exactly the juxtaposition of wealth and relative poverty that makes a city vibrant, the collision between the two worlds. Where parts of big cities have declined, through the collapse of industries or the fears about immigration that led to what urbanists have termed the “donut effect” (in which white populations flee to the suburbs, leaving minorities in the centres), there is space to be filled by artists and architects, by poorer immigrants arriving with a drive to make money and by the proliferation of food outlets, studios and galleries. These, in turn, attract the wealthy back to the centre, at first to consume, and then to gentrify. Whether in New York’s SoHo, Chelsea or Brooklyn, in Berlin’s Mitte or London’s Shoreditch, Hoxton and now Peckham, it is at these moments of radical change that cities begin to show potential for real transformation of lives, or for the creation of new ideas, culture, cuisine and wealth. Once gentrification has occurred, bohemians may whinge about being priced out, as they always have done but, in a big enough city they are able to move on and find the next spot.
In a strange way the everyday conflict with the (unliveable) city can also become part of the attraction. Professor Tony Travers of the LSE says, “At one level the kind of urban sophisticates who live in these areas, in Hoxton or Brooklyn, want to fight the city. The urban struggle is part of the self-image of living on the edge.”
If the relative poverty of newcomers to the city distorts income equality in one direction, then the arrival of the super-wealthy does the same from the other end. The recent turmoil in the Middle East has led to a huge wave of investment in London property, one of the traditional safe havens for foreign money. London, unlike many cities that appear high on liveability lists, has few controls on property ownership. “If cities are any good,” says Travers, “they’ll attract a footloose international crowd who bring wealth.” And so the gap gets bigger.
He adds: “But they also come because of stability. If they buy something, they’ll be able to get their money back.” Which explains why New York and London remain popular, desirable and hugely expensive, despite never appearing on the lists.
The big cities also suffer from size. It’s true that Tokyo (Monocle’s Number 4) occasionally makes it on to these lists but metropolises like London, New York, Paris and Istanbul struggle with aged infrastructure and vast, sprawling transport systems. They are penalised in surveys for their inefficiency compared to, say, a small Scandinavian city. But it’s easy to be efficient when you’re small and when you have a highly taxed, wealthy population. It is also easy to initiate green measures, from recycling to cycling, which prove far more challenging in a proper metropolis with its problems of crumbling infrastructure and mobile population.
Yet it is proven again and again that the biggest cities are in fact the greenest. Their density, the close proximity in which people live and the minimal amount of land they occupy – compared with largely suburban Vancouver, for example, makes for a far smaller carbon footprint. Mumbai is probably the greenest big city there is – slums like the million-strong Dharavi use minimal land, energy and water. And, of course, without wishing to patronise, it is undeniable that there are happy people living surrounded by their families in Brazil’s favelas and millions living lives of drudgery and lonely despair beneath northern Europe’s leaden skies. The world’s most liveable informal cities lists have yet to be pioneered.
There is one criterion which throws up shockingly counter-intuitive results – beauty. On this criterion alone, almost any Tuscan hill town, perhaps Venice, perhaps Paris, would come out on top, yet none of these are there. Most of the beauty in the cities which occupy the tops of the leagues seem to ghettoise their beauty outside the city. They have convenient escapes, though the most beautiful and enjoyable – Rio, San Francisco and others – are curiously absent from the lists. The problem is that beauty doesn’t do you any good at all. It’s not a factor for the efficient, mid-sized chart toppers – though places such as Zurich certainly have their lovely bits. But it also damages your chances of making it into the disaffected megacities mentioned at the start of this article. The most beautiful cities become monuments to their own elegance, immobile and unchangeable. They cannot accommodate the kind of dynamic change and churn that keeps cities alive. In London, New York and Berlin, it is their very ugliness which keeps them flexible.
“The other big question,” says Kotkin, “is can someone coming from somewhere else improve themselves, reinvent themselves? Is there upward mobility?” The top cities score badly again. London and New York are magnets for immigrants precisely because they allow those kinds of new beginnings. They do have class structures but they are increasingly malleable.
There is one problem, though, that remains hard to ignore – violence. Johannesburg may be beautiful but its per capita homicide rates are astronomical; Los Angeles and New York are held back for the same reason. Washington DC’s per capita homicide rate, for example, is more than 30 times that of London and this continues to hold US cities down in the rankings. Urban guru Richard Florida remarks that the key to liveability is to “ensure that a city can guarantee the safety of all its residents”.
Of course, the ultimate difficulty with these surveys is that tastes are individual. I find London infuriating but –with the possible exception of New York – couldn’t think of anywhere else I’d rather live. “The city is a unique and private reality,” wrote Jonathan Raban, author of Soft City. He proposed that his London was a “soft city”, a place that everyone remakes in their own manner, in which every place evokes a personal memory or connection and which we navigate through our own unique mental maps. Our cities are our own – we make them inside us. No city means the same to two people so how on earth can we measure them?
Edwin Heathcote is the FT’s architecture critic
…………………………………………..
Rankings: the best and the worst
New York
The only city that gives me a thrill every single time I walk through it. Fast, furious, brash, cosmopolitan yet completely self-absorbed, it is the perfect big city.
Rio de Janeiro
An extraordinary cocktail of pleasure and pain, beaches and favelas, condos and shacks, Rio is one of the most beautiful, most tolerant and most varied cities on earth. Unfortunately, its high murder rate discounts it from traditional best cities lists. But what a cityscape.
Istanbul
Istanbul
Istanbul

The fulcrum of the delicate balance between Europe and Asia, Christianity, secularism and Islam, Istanbul manages to be both one of the most beautiful cities on earth and yet accommodating to huge and constant change. It is a young, international, wildly commercial city with an extraordinarily vibrant street scene, open 24 hours and genuinely alive.

London
London seems to have the ability to reinvent itself. It has been a magnet for immigrants for centuries and remains a place where the poor can make something of themselves and the wealthy can enjoy their money. Its infrastructure is crumbling, its property overpriced and its weather dull but London’s cultural life is astonishing and most of its museums are free.
Rome
It might be more than 1,500 years since Rome was a proper world city but its allure lies in a blend of history, chaos, beauty and infinite layers of culture.
A few that don’t make the grade
Moscow
Impossible to traverse on foot, infinitely rude, corrupt, understandably alcoholic and seriously traffic-clogged, Moscow needs work. It does have some beautiful bits, from the Kremlin through to the masterworks of revolutionary modernism but the legacy of the communist police state hangs heavy.
Dubai
Everything that could go wrong with a city does here. It is, in fact, a place with no “here”. A succession of malls, highways, hotels and hideous towers, it has spent its history announcing its arrival but hasn’t a clue what to do when it gets there.
Birmingham
Once it was the workshop of the world, an astonishing morass of industry that somehow threw up a powerful, elegant Victorian city, which has been completely destroyed. Its decline has been less complete than that of, say, Detroit or Flint but it manages to be uglier nevertheless.
Jerusalem
I know, I know – beautiful, holy, history lingers in its every shady corner. Yet the treatment of Arabs as second-class citizens, the ghastly security wall smashing through its edges and the omnipresent guns have spoilt it. Jerusalem is the perfect example of why tolerance is so critical to a city.

FT.com Clippings – The MasterBlog’s FT Clips Navigator

Share this|var addthis_config = { ui_cobrand: “The MasterBlog”}

________________________ The MasterBlog


>

The Class That Built Apps, and Fortunes

May 7, 2011

NYTimes.com

STANFORD, Calif.
ALL right, class, here’s your homework assignment: Devise an app. Get people to use it. Repeat.
That was the task for some Stanford students in the fall of 2007, in what became known here as the “Facebook Class.”
No one expected what happened next.
The students ended up getting millions of users for free apps that they designed to run on Facebook. And, as advertising rolled in, some of those students started making far more money than their professors.
Almost overnight, the Facebook Class fired up the careers and fortunes of more than two dozen students and teachers here. It also helped to pioneer a new model of entrepreneurship that has upturned the tech establishment: the lean start-up.
“Everything was happening so fast,” recalls Joachim De Lombaert, now 23. His team’s app netted $3,000 a day and morphed into a company that later sold for a six-figure sum.
“I almost didn’t realize what it all meant,” he says.
Neither did many of his classmates. Back then, Facebook apps were a novelty. The iPhone had just arrived, and the first Android phone was a year off.
But by teaching students to build no-frills apps, distribute them quickly and worry about perfecting them later, the Facebook Class stumbled upon what has become standard operating procedure for a new generation of entrepreneurs and investors in Silicon Valley and beyond. For many, the long trek from idea to product to company has turned into a sprint.
Start-ups once required a lot of money, time and people. But over the past decade, free, open-source software and “cloud” services have brought costs down, while ad networks help bring in revenue quickly.
The app phenomenon has accentuated the trend and helped unleash what some call a new wave of technology innovation — and what others call a bubble.
Early on, the Facebook Class became a microcosm of Silicon Valley. Working in teams of three, the 75 students created apps that collectively had 16 million users in just 10 weeks. Many of those apps were sort of silly: Mr. De Lombaert’s, for example, allowed users to send “hotness” points to Facebook friends. Yet during the term, the apps, free for users, generated roughly $1 million in advertising revenue.
Such successes helped inspire entrepreneurs to ditch business plans and work on apps. Not all succeeded, but those that did helped to fuel the expansion of Facebook, which now has nearly 700 million users.
Venture capitalists also began rethinking their approach. Some created investment funds tailored to the new, bare-bones start-ups.
“A lot of the concepts and ideas that came out of the class influenced the structure of the fund that I am working on now,” says Dave McClure, one of the class instructors and founder of 500 Startups, which invests in lean start-ups. “The class was the realization that this stuff really works.”
Nearly four years later, many of the students have learned that building a business is a lot harder than creating an app — even an app worthy of an A+.
“Starting a company is definitely more work,” says Edward Baker, who was Mr. De Lombaert’s partner in the class and later in business. The two have founded Friend.ly, a social networking start-up.
Still, many students were richly rewarded. Some turned their homework into companies. A few have since sold those businesses to the likes of Zynga. Others joined hot start-ups like RockYou, a gaming site that at the time was among the most successful Facebook apps.
The Facebook Class changed Mr. De Lombaert’s life. His team’s app, Send Hotness, brought in more users and more money faster than any other in the class. And its success attracted the attention of venture capitalists.
“The class, more than anything, set the tone for us to try to start something big,” says Mr. Baker, 32, Friend.ly’s C.E.O.
When the Send Hotness app began to take off, Mr. Baker encouraged Mr. De Lombaert to treat himself to a new car. Mr. De Lombaert settled for a laptop. (He also put some money aside to help to pay his Stanford tuition.) They eventually sold the app to a dating Web site.
Facebook did not actively participate in the Stanford class. But some of its engineers attended sessions, and it benefited from the success of the students’ apps. “It really felt like an incubator,” says David Fetterman, a Facebook engineer who helped develop the applications platform.
The startling success of some of the class’s projects got Silicon Valley buzzing. The final session, held in an auditorium in December 2007, was attended by more than 500 people, including many investors.
“The Facebook platform was taking off, and there was this feeling of a gold rush,” said Mike Maples Jr., an investor who attended some of the classes and ended up backing one of the start-ups.
THE Facebook Class was the brainchild of B. J. Fogg, who runs the Persuasive Technology Lab at Stanford. An energetic academic and an innovation guru, he focuses on how to harness technology and human psychology to influence people’s behavior.
Mr. Fogg thought that the Facebook platform would be a good way to test some of his theories. Creating a new model of entrepreneurship was far from his mind.
At first, university administrators pushed back. “Facebook was not taken so seriously in academic circles back then,” Mr. Fogg recalls.
But there was no hesitation among students — from undergraduates in computer science to M.B.A. candidates — who were spending much of their lives immersed in Facebook.
From the start, many approached the class from a business angle. Mr. Baker, for instance, was a graduate business student but lacked technical skills, so he spent his first week interviewing engineers. “I wanted a technical co-founder,” he says.
He settled on Mr. De Lombaert, and the two, along with a third student, Alex Onsager, created Send Hotness. It let users send points to friends they considered “hot” and to compare “hotness” rankings.
Soon they found themselves in a proverbial “the dog ate my homework” situation. Three days before a presentation was due, Mr. De Lombaert accidentally deleted the computer code he was tinkering with. “We kind of freaked out,” he recalls.
Rebuilding the app would take too long. So, working around the clock over a weekend, they built another version, with a more rudimentary algorithm.
The stripped-down app took off. In five weeks, five million people signed up. When the team began placing ads on the app, the money poured in.
They had stumbled upon one of the themes of the class: make things simple, and perfect them later.
“The students did an amazing job of getting stuff into the market very quickly,” says Michael Dearing, a consulting associate professor at theInstitute of Design at Stanford, who now teaches a class based on similar, rapid prototyping ideas. “It was a huge success.”
DAN GREENBERG was sitting at the kitchen table one night when he and another teaching assistant decided to get into the app game. Mr. Greenberg, a graduate student who had done research for Mr. Fogg, hadn’t planned to get app-happy. But the students’ success whetted his appetite.
Four weeks into the quarter, he and his colleague, Rob Fan, set out to create an app that would let Facebook users send “hugs” to one another.
It took them all of five hours.
The app took off. So they moved on to apps for “kisses,” “pillow fights” and other digital interactions — 70 in all.
Their apps caught on with millions of people and were soon bringing in nearly $100,000 a month in ads. After the class ended, the two started a company, 750 Industries, named after the 750 Pub at Stanford where Mr. Greenberg and Mr. Fan where drinking when they decided to become business partners.
But juggling the business and schoolwork was too much for Mr. Greenberg, then 22. So he called his father.
“I said, ‘Dad, it is 10 p.m., and I’ve got so much stuff to do,’ ” Mr. Greenberg recalls. “ ‘We’re running this business, and I’ve got customers, and we are earning money, and we got financing and we have people to hire. But I have to write a paper tonight, and I just don’t have time for it.’ ”
His father advised him to pull a Mark Zuckerberg and drop out. The next day, Mr. Greenberg did just that.
Now 25, he works out of a glass-walled corner office in San Francisco. He is C.E.O. of his company, now called Sharethrough, which uses social media to distribute videos across the Web for companies. It employs 30 people and has raised about $6 million in venture capital. “It feels like a fairy tale when you look back on it,” he says of the class.
He has upgraded his lifestyle somewhat, but still doesn’t own a car. “I have a Vespa and skateboard,” he says.
“LOVE CHILD.” It sounds like an unlikely name for an app. But Johnny Hwin and his Stanford class team set out to build an app of that name, one that would let two users create and raise a virtual child. It never took off.
“We were overly ambitious,” Mr. Hwin says.
Seeing his classmates strike gold with simpler ideas proved to be a valuable lesson. In 2009, he began working on Damntheradio.com, a Facebook marketing tool that helped bands and musicians connect with fans online.
It opened last June and was acquired in January by FanBridge, where Mr. Hwin is now a vice president, for a few million dollars, he says.
Mr. Hwin, who is 26 and also a musician, now lives in a loft space in the Mission neighborhood in San Francisco. He uses his place as a kind of salon for late-night art shows and concerts.
“With Love Child, we wanted it to be perfect,” he says. With Damntheradio, he found his first clients by showing mockups of the product. “We were able to launch within weeks,” he says.
Another class member, Robert Cezar Matei, says he had only modest success with his projects. One, he said, allowed users to send “cheesy pickup lines” to friends; another encouraged people to reveal something about themselves. After graduating from Stanford, he wanted to earn some money to go traveling, but instead of getting a job, he decided to write Facebook apps. “I’d seen my peers being so successful with apps,” he says. “If they could do it, I could do it.”
After a few false starts, he created an app that let people send points and “kisses” to friends. It struggled until Mr. Matei, who speaks several languages, translated the app. The next day, traffic jumped fivefold. He added games, and employees, and the app became one of the most popular Facebook programs in Europe. In late 2009, he sold to Zynga for an undisclosed sum.
Also in the class was Joshua Reeves, who built an app that created animations that Facebook members would send to one another as birthday greetings or other messages. It made enough money for him to quit his job in 2008 to start Buzzeo, a content management system for Facebook. A year ago, Buzzeo was acquired by Context Optional, where Mr. Reeves, 28, is now a vice president. Last week, Efficient Frontier, a digital marketing company, acquired Context Optional for an undisclosed sum.
ONE recent afternoon at the headquarters of Friend.ly in Mountain View, Calif., 10 engineers worked away as two employees turned their attention to a companywide project: a 24,000-piece jigsaw puzzle.
For much of the past year, Friend.ly has worked on developing its service, a social network for meeting new people, without much success. A few weeks ago, the work appeared to pay off: traffic took off, growing to nearly five million monthly users.
Mr. Baker says the Facebook platform is a magnet for young developers, even though the kind of simple apps that were the focus of his Stanford class now face bigger hurdles. Facebook has made it harder to develop big-hit apps by controlling how apps spread virally.

But Mr. Fogg, says that for those who were at the right place at the right time — in late 2007 — things were different. “There was a period of time when you could walk in and collect gold,” he says. “It was landscape that was ready to be harvested.”


>March 9, 2011, 7:19 pm

Carlos Slim Widens Lead as World’s Richest Man

Jin Lee/Bloomberg News Carlos Slim Helú, picked up 420.5 billion in wealth in the last year.

When it comes to the race for money, Carlos Slim Helú, the world’s richest man, has surged even further into the lead. The Mexican billionaire accumulated an additional $20.5 billion over the last year, bringing his total fortune to $74 billion, according the Forbes annual rankings of the world’s billionaires.
Mr. Slim has held the top spot since last year, when he pushed aside the two past leaders, Bill Gates and Warren E. Buffett. Still, both men added $3 billion to their wealth since the last Forbes billionaires survey. Mr. Gates, the richest man in the United States, is worth $56 billion, while Mr. Buffett is worth $50 billion, according to the magazine.
Forbes attributes the stunning gains in Mr. Slim’s estimated wealth to 19 percent rise in the Mexican stock market, a stronger peso and successful mining and real estate spin-offs from his conglomerate, Grupo Carso. The magazine notes that his family’s stake in América Móvil, the giant Latin American wireless operator, accounts for 62 percent of his fortune. Mr. Slim also owns significant stakes in other companies, including the retailer Saks and the New York Times Company.
Forbes notes that Mr. Gates, a founder of Microsoft, is no longer the world’s richest man because he has already given away $30 billion to his charitable foundation. He and Mr. Buffett, who runs Berkshire Hathaway, have pledged to give away a majority of their wealth by the time they die, as have 57 other wealthy people who have signed the Giving Pledge.
Bernard Arnault, the chairman of LVMH Moët Hennessy Louis Vuitton, easily remains the richest European at No. 4 on the list. Forbes reports his wealth jumped $13.5 million over the last year, to $41 billion. Earlier this week, the French luxury goods company agreed to buy Bulgari, the Italian jeweler, for $6 billion including debt.
Rounding out the top five is Lawrence J. Ellison, the chief executive of Oracle, whose fortune surged $11.5 billion, to $39.5 billion.
The richest New Yorker on the list remains David Koch, who supplanted Mayor Michael R. Bloomberg last year. Mr. Koch and his brother Charles Koch of Wichita, Kan., each have fortunes of $22 billion, as gains of $4.5 billion apiece pushed them up to No. 18 on the Forbes list.
Meanwhile, Mr. Bloomberg dropped to 30th place from 23rd on the list, as his fortune showed little gain at $18.1 billion. Like Mr. Gates and Mr. Buffett, Mr. Bloomberg is a major philanthropist.
Among the Wall Street notables, the hedge fund manager John Paulson came in 39th on the Forbes list with $16 billion, a gain of $5 billion over 2010. The financier George Soros dropped to 46th from 39th, although his wealth rose moderately, to $14.5 billion. And the financier Carl C. Icahn came in 61st, down from 59th, even though his wealth rose $2 billion since last year, to $12.5 billion.
In percentage terms, the biggest gainer in the United States was Mark Zuckerberg, the founder of Facebook, whose wealth rose 238 percent over the last year, to $13.5 billion.
All told, there are 1,210 billionaires on the Forbes list, the most ever, whose combined wealth totals $4.5 trillion.

http://dealbook.nytimes.com/2011/03/09/carlos-slim-widens-lead-as-worlds-richest-man-2/?nl=business&emc=dlbka22

Share var addthis_config = { ui_cobrand: “The MasterLiving Blog”}

________________________
The MasterLiving Blog


>

Still a player: guitar legend Jeff Beck

Jeff Beck

Guitar legend: Jeff Beck

By Stephen Wilmot

Published: September 30 2010 18:01 | Last updated: September 30 2010 18:01

Most musicians are known for a particular sound, style or song. But not rock guitar legend Jeff Beck, who says the secret of his staying power has been the ability to “move on to something else”. It’s a journey that has taken him – via rock, heavy metal, jazz and soul – to his current world tour, backed by a full string orchestra.
“I’m at home with anything that’s got a groove to it,” says the ex-Yardbirds guitarist, pointing to a DVD he is making in tribute to legendary guitarist Les Paul and 1950s jazz. “I get just as much of a kick from that as I do coming up with something from tomorrow-land.”
But Beck’s taste for experimentation does not stretch to his finances – something in which he claims to have no interest but just a little “intuition”. He was almost persuaded to buy a portfolio of shares just before the financial crisis; luckily, he decided at the last minute not to sign. “It was a near-miss for me. But I said no, because I wasn’t satisfied with – or didn’t understand – what was being proposed. When people talk bank-talk, I glaze over after five minutes,” he admits.
Beck now uses the London-based private bank Duncan Lawrie, mainly because it offers a reassuringly old-fashioned experience. Lamenting the passing of the days when “you could almost have a pint with your local bank manager”, he remembers how he and his former concert manager grew frustrated with the impersonal service and “incompetence” of their high street bank. After doing research, manager settled on Duncan Lawrie and suggested Beck switch too.
“I felt nervous at first, because I didn’t really know whether I was making the right decision. But I’ve no complaints. It’s so important to have a one-to-one talk with someone at your bank. They’re handling your money, after all. You go around the world and make your money, and you want to be sure it’s being looked after.”
Beck is currently on the second leg of his world tour. He is still basking in the success of his latest album, Emotion & Commotion, which was released in April and is now up for eight Grammys. He says it is the best response that he has received since 1975, when he teamed up with Beatles producer George Martin to make the album Blow by Blow.
Fans have been particularly struck by Beck’s lush use of strings as backing for his electric guitar. “There’s no substitute for a full string orchestra,” he explains. “I was fulfilling a dream – I wanted to do it back in 1966, but couldn’t afford it. I was always impressed by people like Tina Turner and the way that kind of record was produced. It’s a beautiful sound that can only be achieved with acoustic instruments.”
Beck is also pleased with the popularity of Emotion & Commotion because singers, not instrumentalists, tend to dominate the charts. The guitarist has been wary of working too closely with singers ever since he parted ways with Rod Stewart – then the unknown lead singer of his up-and-coming band the Jeff Beck Group – back in 1969.
“Rod was a bit of a problem because his name wasn’t on the ticket, and the whole ego thing kicked off. I said if you put your name on the ticket you won’t sell any seats, but he wasn’t happy being treated as a sideman,” Beck laughs.
Stewart left to join the group the Faces, which seemed a career upset for Beck, but turned out to be liberating. “The singer problem was gone when Rod left. Rather than see that as negative, I thought: the doors are open.” He says it was working with the New York jazz-rock group Mahavishnu Orchestra in the mid-1970s that made him realise there was “life after singers”.
Beck considers the US his second home. He cites American rock and roll, blues and jazz as his original creative sources, and the US still gives him the warmest reception. It was there he spent a year in tax exile in 1977, which ironically was to pay for his English home – an Elizabethan manor house in the Sussex Weald that he fell in love with on first viewing.
“It was complete lunacy, as I didn’t know if I had the money. But when the estate agents opened the door I just wanted them gone,” he reminisces, grateful that his home turned out to be a good investment too.
Beck struggles to single out one highlight of his career, which has spanned four and a half decades and at least 10 different groups. “The big highlight is that I’m still in the business,” he says with another raucous laugh.

FT.com / Special Reports – Still a player: guitar legend Jeff Beck

Sharevar addthis_config = { ui_cobrand: “The MasterFeeds”}

The MasterFeeds


weOctober 03 2010 7:47 AM GMT
Big Mac index gives more than a taste of true worth

By Steve Johnson

Intervention has kept some emerging market currencies artificially weak, at the same time many have raised interest rates to stem inflation. It is only a matter of time before some allow their currencies to appreciate
Read the full article at: http://www.ft.com/cms/s/0/2736d936-cd89-11df-9c82-00144feab49a.html?ftcamp=rss

Sent from my iPad


On Tomorrow’s Secret Meeting To Plot The End Of High Frequency Trading

The MasterFeeds: On Tomorrow’s Secret Meeting To Plot The End Of Hi…

Sharevar addthis_config = { ui_cobrand: “The MasterFeeds”}

The MasterFeeds





%d bloggers like this: