The Third Power

A Local View of the BP Oil Spill

2010-06-07T18:17:00.001-07:00

While my last post was pointed through humor, this one is no laughing matter. The situation in the Gulf Coast region has pinned us all to our televisions for a good six weeks now with very little changed. My father lives in New Orleans and has weathered Katrina as well as this debacle. He wrote an email to a number of people including my siblings and me. I am reprinting it to give a local person's view of what's happening--with a twist. My father also runs a development fund for projects to help the Gulf Coast region. Please read. It's quite informative.

As I was shelling a batch of shrimp for dinner I thought I would update you on the oil spill from my perspective. I manage a $500 Million coastal restoration program in Louisiana - CIAP (Coastal Impact Assistance Program). The program is designated 65% to the state and 35% to 19 coastal parishes (counties). The funds are distributed to mostly Gulf Coast states and California and Alaska, i.e. those states that have oil drilling off the coast. The idea is that the states would share some of the oil royalties to off set some of the coastal problems/issues ( coastal deterioration, canals, oil and gas rights of way, etc) that result from the oil and gas industry. There is $1 Billion nationally to spend over 4 years of which Louisiana gets about 1/2 of that amount. This funding is a drop in the bucket given that the need has been calculated to be about $30 B. It has been calculated that the state is loosing a football field of coast every hour.

The state and parish projects are 95% selected and were based on public hearings, input from environmental groups, governments, state, universities, etc. My contract is to manage the entire program and report on each project to the Department of Interior's Office of Mineral Management Service (MMS) and to apply for grants as the projects are selected (that includes writing state grants and assisting parishes in their grants).

The oil spill is having an affect on a number of my projects. The largest is a $31M project on East Grand Terre to mine sediment from the bottom of the water about 3 miles away and pipe it to a barrier island to build it up and restore it for wildlife and to serve as a barrier for hurricanes and other weather events. The project is about 1/3 completed and now we have a problem: Contractor is on hold because there is oil and dispersants washing up on shore. Some of the dispersants settle to the bottom of the sea especially in the area where the sediment is being mined. There are other projects that are in design that will have to be re-thought.

The only 'positive' news for Louisiana (but not those states to the east -Alabama, Mississippi, and Florida) is that the Gulf of Mexico tide is taking the oil more toward the east of the delta of the MS River. Even though that means that there is a good possibility that the majority of parishes in the state will be minimally affected, those affected - Jefferson, St. Bernard, and Plaquemines will be devastated since those are the parishes that the sensitive marshland and estuaries are located. There is good oyster, shrimp and fishing industry that thrive in those areas.

Some other thoughts:

BP - are they doing enough? The informed thinking is that they are using the best technology available to them to stop the oil from gushing. They are testing new technology. The ultimate relief will be accomplished when the alternative drill reaches the area in August. There is still a chance the cap that seems to be moderately working could fail - again this is new technology.

Who should pay? Easy answer BP. They need to start paying more for clean up operations and revenue loss by fishers (note the politically correct term - no longer fishermen)

Should the government take over the operation? Hell no! They don't have the technology.

The Politics

Were the marshlands protected soon enough? No but there is no way to put enough boom to stop the oil from reaching land. All of the ideas that have been suggest are very expensive (some with little science and engineering impact) and could not be put in place fast enough to protect the coast.

Are there people working on the clean up in Louisiana? yes - thousands including the national guard. At this time there are hundreds of miles of boom laid - boom can only stop but so much of oil - in rough waters, the oil goes over the boom.

What should people in Florida, MS and ALA do? They should try and fight the oil at least 10 miles off shore by laying as much boom as possible and have a method to collect the oil that is behind the boom. It is impossible to totally protect the coast at this point.

Reaction to Obama

Louisiana is a southern conservative state. Obama is not a favorite - for that matter any one in authority. Lots of racist coded wording in the reaction of the local politicians. He has visited 3 times and met with local folk. There are people on the ground, BP's feet will be kept to the fire - let's hope the company survives so it can pay.

The oil spill is just horrible! The pictures of birds and wildlife coated with oil is just appalling. It will be very expensive and will take decades to fully recover. Fishers in this area will be out of business for a long time - lots of those folks that's all they have done for generations. A number of people in that area migrated to the US from the Cape Verde and Canary Islands in the 19th century. There are also large pockets of Black communities in the affected areas that have been around a long time. They depend on fishing, recreation and the oil and gas industry.

Just some thoughts...

When I read this it gave life to all the images once again, but gave a graver picture of the economic impact on the region. The government may choose to 'bail out' BP just so they can be held financially accountable for the destruction they have caused for the long term.

And lastly, we better not hear about BPs executives getting elaborate bonuses in six months....

Why People Love Sarah Palin

2010-06-04T17:45:00.000-07:00

I’m no political junkie. But Sarah Palin is just too good. No one can stop watching her even a year after she and the old man were readily dismissed in the presidential election.
We’ve heard it all. Sarah Palin has charm. She’s attractive. She appeals to the everyday American. Those are her strengths.

I’ll never forget when she stood in front of a guy stuffing a live turkey in a grinder talking about how she supports small business. Now I like eating turkey as much as the next guy, but I don’t want to see one slaughtered on the six o’clock news.

We watch her because she’s real reality television. She’s I Love New York, Tila Tequila, and Real Housewives of Orange County all rolled into one. We watch her because she’s a train wreck. You just know she’s going to do something that’s so ridiculous that you have to see it happen live. She wrote on her hands people! Can you remember the last time you did that? Probably in fifth grade when you were cheating on your multiplication tables test.

I’m certainly no hater. SP, make your money. Sell as many books as you can, do as many speeches as you can. Use your Sucrets. Keep your throat clear. This is the USA and it’s your time to capitalize. You weren’t going to get cheese in Anchorage.

Keith Olbermann can’t wait for Sarah to make an appearance because he knows he’ll have class A material and a frenzied audience ready to guffaw at her mishaps. I’d feel sorry for her except she orchestrates this stuff intentionally. She wants to portray herself this way. She’s an unintended comedian just walking through life. Her latest Facebook rant blaming the environmentalists for the BP oil spill disaster is just classic. Pure comedy.

Sure she’s a hypocrite. Perhaps she wasn’t the best running mate for John McCain. But she’s in the public eye now and everyone’s watching. I just can’t wait to see her, Pauly D, and The Situation doing “the fistpump” at the club on Jersey Shore. Tell me you wouldn’t watch that.

PatientsLikeMeOnCall™ Podcast Series

2010-04-11T16:27:00.000-07:00

I know it's been a while since I last posted, but hey, I've been a bit busy. I've decided not to call out the airlines as I had discussed before at the end of my last post. It's just too easy.

Instead, this is just a quick post to ask you all to check out the new PatientsLikeMeOnCall™ podcast series that we've recently launched.

The series features staff from PatientsLikeMe talking about our initiatives and how we are moving health care forward. Definitely subscribe to hear the latest.

For more information on PatientsLikeMe in general, check out our company blog.

Travel Right! The Best Coach Cabins in the Sky

2009-12-09T15:26:00.000-08:00

I travel a fair amount. Planes, trains, and automobiles. Mostly by air for the last three years, my travels have exposed me to many coach class cabins. Now seems to be a good time to rate the coach cabins of the top U.S. based airlines in the industry.

Note: this is not a ranking of the airline as a whole including frequent flyer programs, travel routes, customer service (no airline has good customer service), first class, prices, etc. Just coach.

Coach Cabin Rankings

4. Delta
This is not to be confused with Northwest. We’ll get to them soon enough (As an aside, I will miss the big ‘NWA’ on the side of their aircraft. Always made me chuckle.). Delta emerged from bankruptcy with newer planes, leather seats in coach, and a decent entertainment system. Their food choices, if you want to call them that, are pretty good if not reasonably priced. The flight attendants have been friendly for all of the 160,000 miles I’ve flown with them over the past two years. They lost a lot of my business discontinuing their nonstop service from LAX to Boston, though.

3. Southwest
Long known for their fun culture and service, Southwest coach is great. Still like the ‘sit where you want’ option (their ‘pilot’ test of assigned seating was nothing short of a traveshamockery). And now they offer travelers willing to pay a bit more the ability to get on the plane first in front of the fabled Group A. I’ve taken advantage of that a few times and haven’t decided if it’s worth it. Just check in early and you’ll get your aisle or window. Oh yeah, and in case you haven’t seen the ubiquitous commercials, Bags Fly Free.

2. JetBlue
If you ever question the value of crisis management consulting as a profession, talk to JetBlue. After they famously left people stranded on tarmacks around the country during the Noreaster a couple years ago, they’ve bounced back with great in-flight service after their admission of incompetence. Their “DirecTV in every seat” is still a great draw. The flight attendants are friendly and prompt. All seats are leather and even though they seem to be smaller than the coach seats on other airlines (or am I getting bigger?), I never feel uncomfortable. Why? Because JetBlue offers travelers the ability to pay more for more legroom seats. I’m 5’10” so I don’t need too much legroom, but the option is nice for redeyes. That’s important since JetBlue has picked up a fair share of the business Delta lost since it started flying direct from LAX to Boston. Happy Jetting!

And the number one coach class airline experience is…

1. Virgin America
Where to begin. When you walk onto the plane it’s like you’re rockin’ 50 Cent: In Da Club. Add up the black lights entry, pilots donning all black uniforms (no corny pilot hats), a (RED) in-seat entertainment system, armrest remote controls, leather seats, and ample legroom, and you have by far the best coach experience. Their in-flight service is far superior to others because their flight attendants will bring you food and drink when you order, not just via a cart that stands in your way right when you MUST relieve yourself. The order system is part of the entertainment system. Their musical selection offers dozens of artists of every genre. My VA playlist includes Bach, Vivaldi, Rihanna, Janet Jackson (Rhythm Nation 1814), Beyonce, John Legend, (I dropped Kanye after the Taylor Swift incident), Prince, Neo, Keysha Cole, Earth Wind and Fire…you get the picture. Travelers can pay $2.00 for a fairly decent pair of headphones too, but I suggest you have your own. And there’s more. VA offers a premium seating service called Main Cabin Select for seating at bulkheads and exit rows. Cost is $100 extra which isn’t reasonable on a short flight, but can make a difference flying cross country. Lastly, they have a creative safety video that gets annoying after the third time seeing it—which is good since most people tune out after hearing the same compliance speech begin. I won’t spoil it, but Richard Branson does make reference to the Mile High Club as a standard part of the video. VA gets the lion’s share of my LAX to Boston travel these days, and I don’t mind one bit.

*********

So there you have it. My top coach class airline experiences. The top airlines all have segmented the market by offering a premium coach option. They sport leather or equivalent comfort seats. Their market research has paid off from my perspective. While, there are plenty of poor airlines getting their deserved negative attention, I want to recognize airlines that are performing well.

That said, coming soon, I’ll give you the three worst coach cabins. Hint: the Detroit-hubbed airline that I grew up flying will make an appearance.

Take It Higher

2009-11-29T19:22:00.001-08:00

As many of you know, I dabble in poetry and spoken word. Even music back in the day. Check out some of my original tracks.

Droppin' a piece for inspiration. This is an excerpt from a duet single recorded with my good friend Katrina Runge (pictured right). Check the verse. Peace.

Take It Higher

Take it higher
Aspire to achieve what you believe
To be your calling
No more stalling it’s time.
Define who you are
Today and tomorrow
It’s OK to borrow from your history.
‘Cause it consistently reminds us
Of the sorrows that bind us
So they can no longer blind us
And we can put it behind us.
Subtract the minus
Make a positive impact on Earth
You decide your worth.
Free your mind and in time
You will find your way
It ain’t easy in the world today
Nobody can be you
So smile in your mirror
And fly like an eagle!

Bil:Pil Conference Presentation on PatientsLikeMe

2009-11-05T03:04:00.000-08:00

Last week I gave a 30 minute talk about PatientsLikeMe at Bil:Pil, the unconference following TEDMED in San Diego (where Jamie Heywood made an amazing presentation, by the way). The topic of my presentation was "A Healthy Mix with an Economic Twist." I focused on how difficult it can be to make money in the Health 2.0 space because companies must balance patient needs with commercial reality to keep the doors open.

Central to that discussion for PatientsLikeMe are our core values. As I've discussed many times before, it is our imperative to keep patients first in all of our endeavors, including building the revenue base for the company, because we must honor the trust patients give us in sharing their deep health information.

There was a mini-flurry of twitter activity during the talk as well. Check out some of the thoughts from leaders in the space to the left.

What do you think? Video from Bil:Pil will be available in the coming weeks. Kudos to Jonathan Sheffi and team for organizing a great unconference!

PatientsLikeMe Case Study by Claremont Grad Students

2009-11-04T19:22:00.000-08:00

Last year I gave a talk at an e-health conference hosted by the Kay Center for e-Health Research at Claremont University about PatientsLikeMe. A team of graduate students created an impressive case study of PatientsLikeMe utilizing video from my talk as well as other video content we have produced.

Below is the talk I gave to explain the PatientsLikeMe open platform and why patients often choose to create health profiles that anyone on the internet can view.

Lastly, attendee Ted Eytan, MD gave a quick reference to the talk on his blog also. Thanks for the kudos!

Any questions? Drop a comment below. Thanks!

Health Care in America: It’s About Opportunity

2009-09-20T09:26:00.000-07:00

Over the past few months we’ve all watched the health care debate take turns and twists that we never cold have predicted. From President Obama being seriously compared to the most heinous person of the 20th century, Adolf Hitler, to Joe Wilson’s unprecedented outburst of “You lie” at President Obama reminiscent more of lawmaking bodies in emerging countries than the distinguished delegates of our Congress. At its core, the future of health care has been turned into an ideological battle between liberals, moderates, and conservatives. Should the US have a public health insurance option?

Let’s look at some American ideals for a moment. Life, liberty, and the pursuit of happiness. The right to life is a bold statement in the context of healthcare. The government currently has public health care options like Medicare, and it’s law that emergency rooms must treat anyone who needs care regardless of whether the patient can pay. Here’s where opportunity comes in. The American Dream is based on people having the opportunity to reach their highest potential through a meritocracy. Denying anyone access to adequate health care in this country could be considered contrary to the ideals set forth by the founding fathers. In short, it’s un-American to deny people basic health care.

The right to the “life” part calls for people to have the opportunity to reach their highest heights. How can they do that if they don’t receive health care? Like eyeglasses help people see more clearly, adequate health care evens the playing field for people to succeed and achieve. Those on the right will say this is akin to affirmative action. Those on the left would say it’s making everything fair so that anyone can achieve their dreams without institutional barriers. If we as citizens of the United States embrace the American Dream and our unalienable rights proclaimed ours by the Declaration of Independence, then everyone in the country should have access to adequate health care. Everyone in this country should have the opportunity to succeed and health care is just like education in this respect. We don’t deny poor children education. We have public schools at all levels because to deny someone access to an education would deny someone the opportunity to succeed. If a student drops out of school, that is his or her choice, but the access to an adequate education is never denied. Why should health care be any different?

Contrary to President Obama’s statement in his recent address to Congress, this is not a moral question at all. It’s about one of the American ideals that built this country. Opportunity. No Republican can say that this country is built on anything less. No Democrat can say that giving someone a chance at success is inappropriate. Therefore, the health care solution must include a public option. Not having one disregards successful models currently used in the U.S. for no good reason.

No one in this country has achieved anything by themselves. Despite Clarence Thomas’ perpetual claim that he pulled himself up by his bootstraps, he didn’t get into college without someone helping him. He didn’t pass every exam without a teaching assistant. And he certainly didn’t get a nomination for the Supreme Court without some help. Last time I checked, he wore eyeglasses. Health care brings help to those who need it to reach their potential, be more productive, and participate in society. A public option brings opportunity to everyone, as it should in the land of milk and honey. Health care in America is about the opportunity to reach higher. And we all need help somewhere along the way.

Buying a House Out of Foreclosure

2009-05-12T17:44:00.000-07:00

Just recently my wife Rosemary and I bought a house out of foreclosure. Not just any house, but the house we were living in. Yes, our shady landlord Sharon Mooney (yes, I just put her on blast) hadn’t been using our lease payments to cover her mortgage. Worse yet, she didn’t disclose that she was in Chapter 13 bankruptcy when she leased the house to us. Anyway, that’s not the point of this post, although I will spend some time shredding the woman. I’ll then tell the story of how we bought our house out of foreclosure—and how mind-numbingly difficult it was!

That’s right. Buying this house was one of the most painful processes I’ve ever encountered. Fraught with incompetence, lack of urgency, needless paperwork, proof of EVERYTHING, and suspicion, the players involved were constantly at each other’s throats. We’ll get to that. Let’s just start from the beginning.

August 8, 2008. After dropping our kids off at school and daycare, Rosemary and I returned to see a piece of paper stapled to our front door. Notice of Auction. Our house was due to be auctioned on August 28, 2008 on the steps of the Pomona Courthouse – 11am. WTF??? So Rosemary calls (shady) Sharon who assures us that everything is under control and it’s clearly a mistake. At this point we didn’t know she was in Chapter 13. So I attended the auction on the 28th and the sale was “postponed by the owner.” Apparently Sharon’s lawyer was able to get another month to settle the financial issues.

Now picture this scenario playing out for the next three months: We get a new notice on our door for auction. Sharon says everything is great. Either Rosemary or I attend the auction to see if the house we’re living in is going to be purchased. We would have 30 days to leave under that scenario. I don’t think I have to detail the stress this uncertainty wreaked on my family. In addition, I had dropped almost $50,000.00 in rental payments and deposits over the course of a year—and for nothing.

Luckily, my sister, Kathryn, is a bankruptcy attorney. When November came, we had her look up everything on Shady Sharon’s record. We got it all. Her payment dates, dates missed on her Chapter 13, all of it. Then mid-November, Sharon’s final attempt to keep the house came. Chapter 7 protection. No creditors, no financial institution can repossess assets if approved. Deutsche Bank, the holder of the mortgage immediately filed counter suit to have the Chapter 7 request voided because Sharon didn’t have a snowball’s chance in Texas of making payments. Yes, she lives in Texas. I’d put her address up here, but that’s going too far.

Needless to say, Deutsche Bank won. On December 2, 2008, the house finally went up for auction. Sharon did make sure to add us to her Chapter 7 foreclosure so she wouldn’t have to pay us back our security deposit.

In California, one can’t just go to the auction with a pre-approval letter from a bank. A buyer has to come to the auction with a cashier’s check for the entire amount of the house. In this economy, most real estate investors had been burned and were gun-shy at the prospect of purchasing a house sight-unseen. That we had in our favor. I do fairly well, but I couldn’t come up with $600,000.00 in two weeks to buy the house. We rolled the dice on that one, and won.

Now it’s early December and the house belonged to the bank—and this is where the fun begins. Deutsche Bank immediately sold the mortgage to Wells Fargo because Wells held a position on the mortgage as a security and is based on California. This is precisely where the myth-busting began….

Myth #1: It’s easy to buy a house out of foreclosure.
This couldn’t be further from the truth. When you buy a house out of foreclosure, you’re buying from the bank—but the bank is not in the real estate business. What do they do? They hire an asset management firm to manage the process. Wells Fargo had—and this is not a typo—43,000 foreclosed homes in its possession. Now I was just trying to make it 42,999, but again, I wasn’t working with the bank. The asset management company hires real estate agents to determine next steps with each property. Real estate agents are typically not known for their “thought leadership” (no offense to my real estate friends out there—yall are the exception) and this guy was no exception. He made it his business to tell us when the eviction process would begin and how long we’d have to move out. Mind you, we told him we wanted to buy the house. Which brings us to myth #2.

Myth #2: Banks are salivating when they get buyers.
You would think that with a backlog of homes, banks would be willing to wheel and deal to get them off their books. Not exactly. When the real estate agent (Michael) heard that we were willing to buy, he seemed genuinely upset. Rather than greasing the wheels through the process, he kept telling us how many hoops we’d have to go through to get the house and how hard it would be for us to get a loan. He didn’t even know who we were or what our household income was.

Wells Fargo didn’t make it any easier either. In order to buy one of the 43,000 homes in foreclosure from Wells Fargo, they require you to be pre-qualified through them. That’s right. You can’t be pre-qualified through Chase, BofA or any other of the banks still standing. You have to go to Wells Fargo and go through their entire process. And lengthy it was. I had to go through every bank deposit I’ve had for the last two years. Even my expense checks! Why? Because they had to make sure that the extra checks I was receiving each month from my expenses weren’t from drugs. Yes, I’m serious. Banks trying to help? Not so much.

Anyway, after Michael told us for the third time that we would be evicted if we didn’t leave the house by January 17, we stopped talking to him. We did the unthinkable…we got our own agent.

Myth #3: You’re guaranteed to get a GREAT deal buying a foreclosed home.
Are you serious? We finally put an offer in on the house on January 16, 2009, the day before eviction proceedings were to begin. Michael called us to say that because we had submitted an offer, they were postponing our eviction for a month. Thanks. He also said that he would have to get three separate appraisals for the home and that he wouldn’t submit our offer to the bank until those appraisals came back. There were two reasons that three appraisals were needed: 1) to assure that the appraisals were for market value (people in California have been paying the appraisers of foreclosed homes to keep the appraisals low and paying them a commission on the difference), and 2) because they want to sell the house for as HIGH a price as possible. Of course they want to minimize their loss. But for someone who’s looking to buy a house in this economic climate, the hassle was enormous. Banks don’t want to give you a good deal on a foreclosed home. They want to minimize their loss. Which brings us to #4.

Myth #4: Buying a foreclosed home is faster than buying a home normally.
How long do you think it took to get those appraisals? Try a MONTH. So we had to wait a month—the time we had before eviction proceedings, for the agent to find three appraisers to come in and put a price on our house. The excuse was that the backlog of home was so high and that there weren’t appraisers available. Hmmm….Nobody’s BUYING right now!! So what were those appraisers doing? I shudder to ask…The point is that this process was MUCH slower than buying a house under normal conditions and banks aren’t pushing the process along.

So What Happened?
To finish the story, the eviction was pushed back another month into March. Our offer was submitted, but we didn’t hear back within the 72 hours we were supposed to. We began to get nervous because our agent hadn’t heard from Michael either. The rumor was that these agents would go out and find their own buyers (usually investor buddies) who would pay more for the house than the offers they had in order to increase their commissions. Not good for us, right?

We finally heard back in mid-March that the bank wanted to negotiate pricing. Here we go. All the while, we kept going back to our loan officer at Wells Fargo to check our interest rate. During this time, interest rates were falling off a cliff, so our pre-qual rate seemed sky high at this point. That proved to be a good strategy as we were able to reduce our interest rate from 5.4% to 4.8% on our 30-year fixed. Had we not asked, it’s likely we wouldn’t have received the lower rate.

Back and forth we go with the bank. Sure we low-balled, but that’s what you do in a buyer’s market. Their initial counter-offer was unreasonable and Michael knew it. We then came back with a slightly higher offer. Finally Wells entered the realm of reality and got to a somewhat reasonable price. We counter-offered one more time and the deal was done. How long did the negotiation take? Two weeks! It was now early April. Time for escrow.

After all that, we had a 30 day (ish) escrow. All the while we had to keep pushing back the eviction proceedings. Finally on April 30 we closed. Almost nine full months had elapsed since the day we received our first auction notification. Can’t say how happy we are that this process is over. We enjoy our home and feel like the deal we got was squarely in our favor. It was definitely harder than expected to get the good deal, though.

So if you’re looking to buy a house out of foreclosure, be prepared for the drama. Sure it was compounded by the fact that we lived in the house we were buying and were scared of eviction, but the process took five months from when Wells Fargo took possession to close. That’s an eternity and shouldn’t be the case in this market.

Good luck!

Getting a Job in a Down Economy

2009-03-26T10:33:00.000-07:00

When you start looking for jobs, what’s the most natural thing to do? Look in your industry. Industry experience matters to employers so when you’re in job search mode, you go for low-hanging fruit. We definitely recommend you do that as part of your search—but what if you’re in one of the industries like finance or real estate? There might not be an option in that industry. Don’t despair. I’m going to hook you up with secrets to manage that situation.

The Secret: Think Functionally

What does that mean? Every job is categorized by both industry and function. For example, an industry is pharmaceuticals, but the function is sales. Your potential to get an interview is based not only on the industry experience, but also on your functional experience. And guess what? Functions go across industries! That’s right. You have gained transferable functional skills that apply not only to your industry, but to others as well. Things should start coming into focus for you now….

Your job is to begin thinking functionally right now. Don’t think about the industries in which you’ve worked, start thinking of the different functions that you have experience with. Here are some functions to get your mind working:

• Marketing
• Sales
• Operations
• Recruiting
• Consulting
• Market Research
• Information Technology (networks, hardware, software, development)
• Strategy
• Research
• Project management

What about skilled trades?

• Truck Driving
• Painting
• Auto Work
• Hotel Room Service
• General Hospitality

Think about the projects that you’ve worked on within your job. Did you lead a team, do budgeting, perform custom analyses, business plan, or mentor others? Do you have a skill or trade that can be used anywhere? It’s extremely important to know what you have done when in job search mode. Cater your resume to your function and you'll be ahead of the competition. Good luck!

Is the United States truly a free market system?

2008-09-07T12:56:00.001-07:00

I've had enough! With today's seizure of Fannie Mae and Freddie Mac by the U.S. Government, I have to wonder, "Is the United States truly a free market economy?" In a true free market system, companies are judged by their decisions and prowess at generating extraordinary profits. Companies issue securities to be bought and sold in the open market to value the company and respond in real-time to its decisions.

It seems with the current mortgage crisis, "free market" has become a misnomer. The Bush Administration continues to use language like "protecting global markets" as reasons for bailing out yet another flawed financial services company.

From the Associated Press:

“A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance,” [Treasury Secretary Henry] Paulson said.
But more importantly, “Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe,” he added in a televised announcement.

Are Fannie and Freddie different from a Countrywide, IndyMac, or Bear Stearns? Well, yes, they are. Because they own about half of the total housing debt in the country, some believe their collapse would have meant a global financial meltdown possibly leading to rampant inflation and even a global depression.

But that's the doomsday scenario. What if the Government allowed Bear Stearns to fail? What if Fannie and Freddie were accountable to their multiple years of questionable lending and mortgage acquisition practices? Free market economies are supposed to correct themselves. The theory says that when free markets overheat, they correct, sometimes violently. We're seeing that now. The problem is that the government isn't allowing for this natural correction to take place. What about Enron, Arthur Anderson, and Martha Stewart? Where's the accountability in the financial services industry?

We have no idea how deep this crisis can go, but we know the government won't allow it to get there. With a Republican White House, one has to wonder if the party truly is about having smaller government, reduced spending, privatization, and, of course, open and free markets?

Over the last few months, the Bush Administration with Paulson (a former Wall Street executive with formal and informal ties to all of the companies he has bailed out) have flip-flopped on their party's most coveted stance--free markets. From the Associated Press:

Officials defended this approach by saying it underscores the importance of the trillions in mortgage debt that each company either holds or guarantees and the need to make sure that investors in this country and overseas keep buying this debt.

And herein lies the rub. The U.S. economy needs international investors to buy risky debt. That smells like HUGE trouble regardless of any bailout, doesn't it? If investor confidence overseas plummets in the US mortgage market, the dollar will continue to fall precipitously versus all currencies--and that could even happen WITH this bailout.

The real question then is, how much protection are these bailouts really providing? If the governmenet has to seize Freddie and Fannie, then we should expect this housing crisis goes deeper than any of us know. The common man's access to the data used to make these decisions aren't made public so none of us knows exactly what they saw before acting. That's what scares me.

I want to jump into the housing market because there seem to be opportunities. But today's action will keep me on the sideline not for months, but years. I get the feeling we haven't seen ANYTHING yet.

Diversity in 1995 and today...

2008-07-21T08:35:00.000-07:00

I was cleaning up my garage this weekend and found an article I had written in 1995, one year after I graduated from University of Pennsylvania. The subject was an incident that had happened to me just a few weeks prior at my job at Information Resources, Inc. that gave me a glimpse of what the business world was like for people of color. I chose to share that story with students still at Penn by submitting an article to The Vision, the African/Caribbean American newspaper published out of the W.E.B. DuBois College House where I had lived for two years during school. I wanted the students to learn from my experience.

**********

When You Get Out
By David S. Williams III
The Vision
University of Pennsylvania
September, 1995

When you leave Penn, there are a few things that you can expect: 1) you wont be paid what you’re worth, 2) you wont be evaluated fairly and 3) there won’t be many African Americans around you. The third constant above reveals the discrimination inherent in hiring practices throughout the business world. Executives are often afraid of hiring minorities because they’re worried about being labeled “reverse” discriminators.
During a recent group meeting the Executive Vice President of my company asked if there was a perception of a “glass ceiling” in the company for women and minorities. In a room willed with 80 people, over half of whom were women, silence ruled. The EVP sounded genuinely surprised by the lack of responses, but it seemed no one would dare raise a voice on such a controversial topic. Up went my hand. “Well I can’t speak on a glass ceiling since I’ve only been here a short time, but I think the larger issue is recruiting.” Then slowly rising to my feet, “…because I can look all around this room, and I don’t see one person who looks like me.” A tense silence prevailed as my fellow employees kept their eyes fixed forward.
Since the EVP refrained from addressing the issue, one woman did try to lend some support. Her voice trembled. Although it was a valiant effort on her part, she might have been more helpful by remaining silent. “Interesting…” pondered the EVP, just before, “Let’s discuss our third quarter goals.”
After the meeting, I received all kinds of support from co-workers! I heard, “Hey, I agreed with everything you said!” or “Dave, you’re absolutely right about that. It’s great that you stood up for what’s right!” The feeling of camaraderie with my colleagues swelled inside me like…lava in an active volcano. Where was that support when my head was on the chopping block?
A few days later, the EVP left me a voice mail message inviting me to lunch to discuss the issue “brought up in the meeting.” We set it up for a week later (after one cancellation) to eat at Bennigan’s. After exchanging pleasantries and funny stories, we began discussing the issue. He asked me if it was difficult for me to work in an environment without any other Blacks, and I answered (after taking a very deep breath), that it was very difficult because I had no way of expressing concerns if I’m treated unfairly because of my race either by a colleague or by a client. I told him that the isolation alone makes it a hostile environment. The EVP explained that he had never thought about it that way. Surprise. Being the action oriented executive he is, he asked me for a solution. I suggested that the company begin recruiting at some predominantly African American schools naming three that have excellent reputations. To his credit, the EVP responded favorably, but his following response cut through me like a knife. He explained that his main concern in changing recruiting policies was upsetting the current employees because he would be locking out good potential white candidates because of race. For a moment, I thought I needed the Heimlich Maneuver! I wanted to say “Don’t you realize that we’ve been locked out of positions for 400 years!?,” but somehow, calm took over. The diplomatic answer given was that the caliber of candidates would not be compromised by recruiting from these schools. Lunch tasted awful, even after dessert.
There won’t be many African Americans around you because the EVPs of America perceive two risks in hiring us: 1) That they will upset white people, and 2) that we’re all lazy and won’t work hard to make them more money. Isolation and contempt sprout into a weed within, but just remember that the bills must be paid. As a result of going under the guillotine, I will be heading the recruiting efforts at these three African American Universities for our office.

**********

So what did I learn from this and how has it played out today? I've had successful stops at every point in my career and have overcome more than my fair share of narrow-minded people. I created a similar position for recruiting at Deloitte Consulting during my time there because the same situation occurred.

Today, I still get funny looks when I walk in a room. There aren't that many African or Caribbean Americans with executive positions at startup internet companies (like PatientsLikeMe). I am still proving myself everyday. We still have to be 10 times better to get the same opportunities.

Progress, however, is right in front of us. Barack Obama's candidacy for President has marked a major shift in perceptions of people of color in the United States. Where Colin Powell, Clarence Thomas, and Condoleeza Rice failed to connect with people who look like them, Obama has done so in a principled manner while still appealing to the majority. Good for him, good for us.

In that vain, I'm proud of the successful peers of color I have leading many industries, starting great companies, and contributing to academia. Let's keep it up, and pave the road for those who come after us.

From First Class to Last Class: Delta Airlines

2008-06-29T11:24:00.000-07:00

I know it has been a while, but with good reason. In the last two months I've been criss-crossing the country. Boston, New York, Philadelphia, New Jersey (north, south, and central), San Francisco, Seattle, San Diego, and then back to Los Angeles.

Those of you who find me on Facebook have noticed recent multiple status updates on my first class upgrades (or lack thereof). I have a ton of miles on Delta Airlines, so I frequently get free upgrades. However, recently they have lowered capacity, and thus, I'm competing on high travel routes with other Platinum Elite flyers.

The way the free upgrade works is that if first class doesn't sell out, then the highest level frequently flyers (Platinum Elite in this case) get the open seats. The issue is, however, that there are often more PEs than there are seats. What's the next tie-breaker? Total miles flown. My measly 300,000 doesn't often cut it.

So after about a year of non-stop first class flights, I've had to fly coach for the last two months. This happens to coincide with my heaviest travel schedule, hence the frustration. In fact, on a flight from Boston to Seattle last week, I was in what I unaffectionately call "last class"--the last row of the plane where there's no recline.

So perhaps I'm a bit spoiled. I'll give you that. But flying first class without paying anymore will do that to a person. Just got the email confirming my latest itinerary, too. Got first class, both directions. Aaahh...return to normalcy.

Update: But now I'll have to pay to redeem my miles for any free tickets. This is getting ridiculous....

23andMe and my wife

2008-04-29T14:57:00.001-07:00

My wife got her 23andMe personal genetics profile information yesterday. Wow, you never really know a person until you see her genome, huh? Just kidding, Rosemary. The results raised her eyebrows and mine after we dug a little into the information.

First, the good: The amount of information that is elegantly packaged into one service module is amazing. Learning not only about geographic origins and eye color, 23andMe makes it easy to find out who your genome resembles most. No matter how simple some of the charts look, building software to produce that output is extremely difficult.

Now, the challenges: With so much data, it was hard to find the same information twice. Once Rosemary viewed her profile and a few pages, she found it hard to locate the same information again when trying to share it with me. Navigation could be improved. Lastly, a couple of the charts weren't so easy to understand (and I have a pretty good feel for data visualizations). There were instructions on how to read these charts, however, which shows insight among the 23andMe team that their visualizations may be new ways for people to view data.

Although this isn't supposed to be a review, 23andMe is quite a service. The information is thorough and relatively easy to digest. Rosemary and I now have a few private jokes based on the results of her data that will last quite a long time. She now wants me to send in my kit. I think I'll milk this just a little longer. Like I said, you never know someone.....

AIDS.gov Interview

2008-04-09T22:25:00.001-07:00

Today I was quoted as part of a series on health social networks by AIDS.gov. The post has views from myself of PatientsLikeMe, as well as one of our community members. It's certainly worth the read, especially if you're considering joining a social network centered on a health issue.

As preparation for that piece, I was asked to answer a few questions--the answers to which I think add to the consideration for anyone looking to join a health social network. The focus is on people with HIV, but applies to people with any condition.

As always, comments or feedback welcome.

______________________

1. What do you see as the value of niche social network sites as opposed to larger social networking sites, like MySpace and Facebook?

"Niche" social networks, like PatientsLikeMe, focus on people's particular health needs. We are not concerned with "links", "friends", or "feeds" as much as we're focused on gathering, structuring, and reflecting information that will improve the quality of life of people with life-changing conditions.

2. Do you prefer the word "niche" social networks or "communities of interest"?

Well, neither of those terms best describes what we do. Perhaps “collaborative network” would be most accurate for us. Yes we are a “social network” and we do create “communities of interest”, but we’re different. Patients share information (such as CD4 counts and viral loads) in order to learn from each other in a spirit of collaboration—to help themselves while helping others.

What separates us from typical social networks is that status or prestige is not measured by how many “friends” one has, or how many “hugs” one gives. Status on PatientsLikeMe is conferred to each patient by how much data one shares with the rest of the community. For example, a three-star patient shares a diagnosis date, is current with outcome, treatment and symptom information, and has provided a certain amount of historical outcomes data. This deep data sharing provides credibility to the patient for all interactions on the site. In essence, sharing data gives patients our version of “street cred”.

3. What was the impetus for starting the HIV community at PatientsLikeMe? How were patients involved?

Clearly there is a need for people with HIV to learn what works for patients like them. With virus mutations, numerous medication choices and combinations, and different stages of the disease, people need a place to learn from the collective experience of others. We target those types of disease communities in order to advance knowledge when conventional methods are either too slow or unavailable.

We opened the HIV community to charter members last fall in order to learn from patients how we could improve. We now have more than 600 charter members, many of whom have influenced new functionality and streamlined data visualizations to be more user-friendly.

4. What advice would you give to AIDS service organizations wanting to get involved with niche social networking sites? How can they get involved with PatientsLikeMe?

Our communities are free to join and open to all patients, researchers, doctors and nurses, and other industry professionals and organizations. For organizational partnerships, we can set up a page for you in our Partners section that list your website, contact information and more. The organizational page will also include profiles for any members of your organization participating in the community. We encourage any AIDS service organizations interested in this type of partnership to reach out to our marketing team.

5. What do you see as some of the benefits/challenges of social networking sites? PatientsLikeMe?

The challenge for people joining many health-related social networking sites is being open about their own health. On PatientsLikeMe, that issue can be confounded since patients share their in-depth health information that would traditionally be kept private. Some people don’t feel comfortable sharing that level of information in an open community, and we respect that.

The benefits, however, are astounding. Imagine knowing what everyone is taking for HIV and their outcomes over time. Each patient can then have a more productive dialog with his or her health care team in order to craft a customized treatment program based not only on clinical trial evidence, but also on the real-world experience of thousands. Doctors would have access to the range of dosages for every medication in real time, thus keeping on the cutting edge of prescribing practices. For many, the benefits clearly outweigh the risks.

"My Teammates" - The Sign of Selfishness

2008-03-29T20:48:00.000-07:00

I happen to watch a lot of NBA basketball. Teamwork on the court is just like teamwork in the board room. My hometown Detroit Pistons prove their mettle year in and year out. Built on a mantra of unselfishness, the Pistons have appeared in the last five Eastern Conference Finals, winning the NBA Finals in 2004. When any of the Pistons are interviewed, they talk about the team concept, they praise others, and they thank the team collectively. Same with the San Antonio Spurs (4 rings). Have you ever noticed how the new crop of NBA players refers to others on their teams as "my teammates"? Using that term rather than words like "our team" or "the team" or "other players" condescends to the true team players on each squad and exposes their unquestionable selfishness.

Now it's very true that others on their team ARE their teammates. It's the context of the quote that raises eyebrows. Case in point: Dwight Howard. Did anyone see the NBA Dunk Contest during All-Star weekend? Cheryl Miller (aka the best female basketball player who has lived or will ever live), asked "the new Superman" how he got the idea for his red-caped flight to the rack. Dwight said "my teammates came up with the ideas" for his dunks. Can we get names, please? Everyone says that was one of the most creative and dramatic dunks ever, and you can't give the guy who thought of it some credit? Was it Jameer Nelson--the guy who threw you the pass on the Superman dunk and went to chest bump you after you made it and you went the other direction? Now you know why Stan Van Gundy's been calling him out all season.

Dwight Howard - Selfish NBA Player

Who's next on the list? None other than LeBron James. If I had a dime for every time LeBron uses the term, "my teammates" to describe the Cavaliers, I wouldn't have to work. One quote, however, sums up LeBron's selfishness:

"I love sharing the ball with my teammates. I see a lot of things before my teammates see them."

What? So what you're saying is that you love to share the ball with guys who can't see? Yes, LeBron. We are all witnesses.

LeBron James - Selfish NBA Player

Here are the most frequent "my teammates" guys who will never be winners because they condescend to other players rather than honor the team itself (not in any order).

1. Dwight Howard
2. LeBron James
3. Tracy McGrady
4. Amare Stoudemire
5. Kobe Bryant (although much less so in 2007-2008)
6. Allen Iverson (the poster child)
7. Carmelo Anthony (doesn't bode well for Denver's playoff hopes, huh?)

So why did I bring all this up? Because in business--especially entrepreneurship--everything is teamwork. If you want your business to succeed each player on the team MUST set aside his or her ego and work toward the common goal. That old cliche about the "weakest link" still holds. If you have some people like the seven listed here on your team, it might time to ask what team they play for.

Enough said.

PatientsLikeMe Featured in the New York Times

2008-03-22T13:06:00.000-07:00

PatientsLikeMe, the leading treatment and outcomes sharing online health community, is featured in the March 23, 2008 edition of the New York Times Magazine. The article, entitled Practicing Patients, appropriately discusses the pros and cons associated with sharing data-rch personal health information in an open community.

PatientsLikeMe seeks to go a mile deeper than health-information sites like WebMD or online support groups like Daily Strength. The members of PatientsLikeMe don’t just share their experiences anecdotally; they quantify them, breaking down their symptoms and treatments into hard data. They note what hurts, where and for how long. They list their drugs and dosages and score how well they alleviate their symptoms. All this gets compiled over time, aggregated and crunched into tidy bar graphs and progress curves by the software behind the site. And it’s all open for comparison and analysis. By telling so much, the members of PatientsLikeMe are creating a rich database of disease treatment and patient experience.

With amazing patient successes balanced by medical leaders' skepticism, author Thomas Goetz strikes a critical chord within the current healthcare debate. Is the American health system broken? Can patients fix it through aggregation of collective experience? Are patients to be trusted to report their own health conditions? What does PatientsLikeMe mean for the medical establishment?

PatientsLikeMe is a tool that allows patients to manage their disease with a sophistication and precision that would have been unimaginable just a decade ago. The 7,000 members of PatientsLikeMe, in other words, are beta testers — they may be the vanguard of how we all will care and treat our résumé of chronic diseases.

The PatientsLikeMe Openness Philosophy (penned by yours truly) draws our company line in the sand. Openness can lead to better outcomes and accelerate research like never before. This is our goal for PatientsLikeMe. This isn't health science fiction. It's happening today.

Read the article--and join PatientsLikeMe--to see where you stand.

An Open Letter to Senator Clinton

2008-02-14T20:00:00.001-08:00

Senator Clinton,

As your team endures the challenges of a grueling campaign, I offer these observations. As I am but one man, I understand my voice is not loud. My blog is not prominent. My stature, still emerging. In watching this election cycle unfold, I have seen why Senator Obama continues to impress voters while you watch your lead slip away.

This election is about us--the people

Whether intentional or not, the media has portrayed your campaign as something that is about you. About your entitlement to the presidency. The problem? The beat of America now drums for empowerment of the people. For 7 years we have felt powerless to change the course of the country. We have felt powerless to create our own destiny. We want to feel in control of our democracy again.

Senator Obama has portrayed himself as the embodiment of "the people". That the "change" he will deliver will be the people's will. This is why he continues to win. This is why he continues to gain support from the most staunch of Clintonites.

Your win in New Hampshire wasn't because "you cried". It wasn't just because you showed emotion--and that as a woman, emotion is expected. The media has it wrong. The reason you prevailed was because of WHAT moved you to choke up. It was because you showed how much you care about America. You showed how much it means to you that the country move in the right direction. In other words, the election wasn't about you, it was about us.

When your campaign leaves that message, you lose. It's that simple. You can follow the "stark differences" strategy that you're beginning as of today, and you will lose. You will feed Senator Obama's momentum and you will become the symbol of ol' school politics.

In order to connect with the people, you must return to where you win. By showing why you are the candidate that best embodies the will of the people. It's not about your ideas, it's about our ideas. Your platform needs to be our platform.

Senator Obama is getting by without having to explain how he embodies the will of the people--he just is. It's now your job to show that his interpretation of what people want is out of touch. You must electrify your supporters by reminding them who can not only understand the will of the people, but can execute our demands. That is where you win.

I am a supporter of change. My vote is not yet cast. I want you and Senator Obama to listen to the people and bring our ideas to the debate. Once this happens, you will find yourself standing on much firmer ground instead of flailing in quicksand. Then, regardless of who wins, the United States will be just that.

Business Development in Health 2.0: Blazing the Trail to Profitability

2008-02-06T20:32:00.000-08:00

From the PatientsLikeMe Blog, The Value of Openness

Much has been made about the potential for viable businesses in the health 2.0 movement. In short, these articles and blogs (among others) openly and appropriately question the long-term viability of the space:

Are they right? That answer is unclear, but they are right to ask. In our spirit of openness at PatientsLikeMe, we’re going to share some of our experiences as we evolve our commercialization strategy.

In order to give context to the discussion, however, we want to share our corporate values. These values shape our lenses so when we have partnership opportunities, we see 20/20, and avoid color blindness, i.e. only seeing green.

Honor the trust patients place in us
Simply stated, this means “Patients First”. Patients trust us with their most valued health information and share it with people they believe have the same collective goals. We can’t overestimate the trust we’re given.

Openness
Per our Openness Philosophy, we believe that sharing health information is good. Why? Because sharing will drive massive change in healthcare.

Transparency
No surprises. Our members shouldn’t be surprised by any of our steps, especially in business development. We will disclose all of our partnerships on the site.

Wow!
When people see our site, we want them to think, “Wow!” Achieving our vision takes flawless execution and understanding of patient needs.

With these core values in mind, we attempt to match the needs of our patients with the goals of our partners. If the two are misaligned, then we pass on the deal. In fact, we have passed on dozens of opportunities because they weren’t aligned with our core values. We must embrace a high ethical standard because patients share data with us that would historically be held private—not just for their own benefit, but for that of others. Since they’re selfless, we must consider that selflessness when we enter into potential partnerships. If it doesn’t feel right, it’s not right.

Here’s an example of a deal we passed on...Read the rest at PatientsLikeMe Blog.

UCLA Anderson #1 in Entrepreneurship

2008-02-02T03:23:00.000-08:00

For the fourth time in six years, UCLA Anderson has been ranked #1 in entrepreneurship by the Financial Times.

From Financial Times:

Best in entrepreneurship**

1 UCLA: Anderson
2 Stanford University GSB
3 Babson College: Olin
4 UC Berkeley: Haas
5 IE Business School
6 University of Arizona: Eller
7 University of Texas at Austin: McCombs
8 Imperial College London: Tanaka
9 Insead
10 University of Southern California: Marshall

As a member of the Price Center for Entrepreneurial Studies Board of Advisors, I'm proud of this ranking as it reflects the accomplishments of our alumni entrepreneurs while recognizing the excellent faculty and students currently attending the school.

The Price Center and UCLA Anderson press release contains more information about this prestigious award. As an alumni entrepreneur with a number of businesses under my belt, I can attest to the school's curriculum and student experience and how it helps mold successful entrepreneurs.

Congratulations UCLA Anderson!

Happy New Year! 2008: The Year of Greatness

2008-01-02T09:41:00.000-08:00

Happy New Year everyone! Just checking in to wish everyone the best for 2008. As many of you know, I have a theme for each year that I carry throughout in order to keep me on track. 2007 was the Year of Prosperity. I am happy to say that our family had a great year financially as well as health-wise. I would say that we have prospered in both of those areas beyond my satisfaction.

So with no further distraction, I would like to announce the theme for this year. 2008 is now known as:

The Year of Greatness

Why did I choose that? Because there are a few areas on which to focus in order to achieve greatness. We're looking at health, career, and family.

Regarding health, the development of our children is paramount. With Davey's diagnosis with autism, there's an opportunity to be great. As an executive at PatientsLikeMe, I have the opportunity to help consolidate the prevailing knowledge and create NEW knowledge in autism by starting a community. That endeavor is slated for 2008.

Professionally, being "great" comes with much sacrifice. I define career greatness not just by my individual success, but also by how many others I help to reach higher levels and unlock their potential. As a member of the Board of Advisors of the Price Center for Entrepreneurial Studies at UCLA Anderson, mentoring more students about entrepreneurship is my main focus. I want to help others achieve greatness.

Our family greatness is an ongoing progression, but we'll measure it by the combination of how well we utilize our financial resources, maximize our children's life experiences, and ascend our family's influence in a number of areas externally. It's not enough to just help ourselves. We must help others as well.

So best wishes to everyone in 2008. Find your greatness. Live it. Achieve it. This is the year.

Williams Family Video Clips

2007-12-30T21:24:00.000-08:00

Here are some great family video clips from 2007.

Rosebud's pre-Christening clip.

Halloween 2007 with the Williams kids

Rosebud Walking for one of the first times.

PatientsLikeMe Badge

2007-11-01T10:51:00.001-07:00

Check out our new badges!

Health 2.0 Conference

2007-09-22T12:26:00.000-07:00

Kudos to Matthew Holt and Indu Subaiya for putting on an excellent inaugural conference last Thursday. The panels were excellent, providing insight into the future of health on the net.

Search, vertical health search, social media for patients and providers were all represented with a distinguished closing panel giving thoughts on the future. I was impressed with the diversity of angles people have identified to address the "hairball" of health care in the U.S.

It was also great to see former RHR friend Doug Evans, CEO of Presidio Health. They have closed a Series A round of funding and are expanding their already successful convergence hospital medical billing and operations business to a consumer model.

I also got to catch up with an old friend, Stephanie Ho. An HBS grad and former intern with me at BizBuyer.com, Stephanie is now a Vice President at Bertram Capital focusing on the health space. Stephanie has become a player in the growth equity game for health care and is looking at the space for potential investments.

Raising Price as a Viable Marketing Strategy

2007-08-15T12:39:00.000-07:00

I get this question a lot from people that I mentor and other business clients. I answered this particular question on LinkedIn that I think deserves blog coverage here.

The question:

"Raising your prices - a viable marketing strategy?"
In traditional marketing we worked with the 4 P's. Price, Product, Place and Promotion. The only P creating income and margin is Price, the rest create costs. Still, product and service providers generally compete on prices and suffer lower margins. You do it differently and raise your prices this year with 10%. At the same time you compensate with value-added services. What will be the result of this strategy?

Here was my answer:

Errol, You ask an excellent question. Often entrepreneurs enter markets and compete on price to obtain share. Pricing is the first communication to... see more customers of the value they should expect from your product. If you price at or just below your competitor, you may get share, but you will always be expected to price at or near your competitor. That way, the competition indirectly dictates your pricing strategy.
Price your products and services based on where you should be positioned versus your competition. If you are superior, then price at a premium. Your brand strategy should support a premium position (i.e. some value added services), but you should not be afraid to price at a premium if your product is better. Gear your organization to appealing to a customer who will value your premium product. Then, you will be defining your own pricing and branding strategy, and your competitors will have to follow you.
I have implemented this strategy several times in the past with excellent results. On the product side, Prodigen (TM), a nutritional supplement, I priced 80% higher than any competitive products because of the benefit our customers will receive. Windhawk Nutritionals uses better ingredients, better process, and this product has a dual benefit. The product is flying off the shelves--and my lower priced competitors are scrambling to keep pace.
On the service side, at The Windhawk Center we used to price our memberships at $59/month to compete with other fitness centers. I realized however, that we have such specialized services that gyms didn't offer, that we were leaving money on the table. Now our memberships are tiered with the lowest price at $179/month and the highest at $599/month. Our business has soared since the pricing changes with our client list growing faster than ever. Clients are paying for the perceived benefit, outstanding customer service, and the overall experience.
To drive the point further home, our location has a much lower demographic profile than our customer and they travel 10 miles or more to come to The Windhawk Center. We realized that our core customers were affluent and were willing to travel a great distance for our specialized services. Pricing to reflect the level of our service was the key change to our strategy and it made a monumental shift in our business.

The overall message from this response is to understand your pricing sensitivity based on the product you provide. Consistency is the key element to branding and perceived value. Ensure that the entire organization is ready to deliver on that brand promise.