Amazon Acquires Sears

amazon-sears_Rd.1If you have any doubts, just wake up and think about it. It’s a win-win for both Jeff “Get Big Fast” Bezos and Eddie “Take the Money and Run” Lampert. Amazon gets roughly 2400 US stores (or “buildings”), overnight (1300 Sears, 1100 Kmart). The acquisition becomes Bezos’ answer to omnichannel and the proven revenue synergy of consumers’ ability to shop online and off; the convenience of proximity for pick up and returns; and facilitation of even greater delivery speed. So just as Walmart’s 4500 stores double as distribution centers, so would Amazon’s acquired Sears/Kmart stores.

The real estate assets would be the primary reason for Amazon’s interest in acquiring Sears Holdings. However, there are several other valuable assets and operations, which Amazon could enhance and grow.

What Eddie gets in such a sale is a potentially profitable exit strategy that many analysts, myself included, believe he is pursuing. In fact, in several of my past articles I have opined that Lampert was, indeed, managing the business into liquidation. And regarding the real estate assets, Lampert has been methodically selling, leasing (partial or in total), and/or closing Sears and Kmart locations. Indeed, he indicated not too long ago that Sears Holdings was considering shuttering its entire fleet of Kmart stores. So if he is seeking an exit, a far less painful and certainly more profitable option would be a sale to Amazon.

This could fall nicely into Bezos’ hungry little hands. Amazon might be able to cut an incredible deal, at least far less costly in time and capital, than building or leasing its own nationwide distribution centers/stores.

The financial complexities involved in such a deal are beyond my pay grade, particularly since Eddie engineered a total reorganization of the business: morphing its structure into some 30 business units; establishing the securitization of brands — “unlocking value” as Eddie called it — and other aspects that might give the dealmakers a royal headache.

However, “by the numbers” alone, it might be timely for both Bezos and Lampert to want to make the deal. When Lampert formed Sears Holdings in 2005, revenues of the combined businesses were around $50 billion with about 3500 stores. Revenues and profits have dropped steadily, to $36 billion in 2013, with a loss of about $1.4 billion last year. The stock price hit a high in 2007 at $192 per share; today, a share of Sears Holdings is hovering around $30. One analyst said if the stock drops to around $20 per share, Sears would be “one stop on the way to liquidation.”

So as Sears’ declining financial condition continues, its valuation as a potential acquisition target falls as well, making it very attractive to Amazon. Sitting in Amazon’s lengthening shadow, Eddie might assess that the “whole” is now more valuable than the sum of each of the last few remaining assets. Therefore, in my opinion, Eddie might be bailing into his lifeboat sooner rather than later, and a deal with Amazon would no doubt fill it with enough cash for him to add substantially to the pile he’s already extracted through his brilliant financial engineering.

Other Amazon “Gets”

There are other attractive assets and operations that could easily be integrated into Amazon’s model, and to which value could be added (in some areas repaired). While Kenmore appliances, Craftsman tools, and DieHard batteries have been placed into another entity and charge Sears royalties as a licensee, I’m sure Amazon would insist they come with the deal. And, those are iconic brands that can be re-energized. The e-commerce business, which Lampert invested most heavily in and strategically focused on for future growth, while only accounting for about 3% of the total business, could certainly be leveraged when plugged into Amazon’s model.

Furthermore, Amazon has mastered “Big Data” (its database is estimated to be larger than that of the Pentagon), and more importantly, they know how to use it strategically. For example, it has the ability to guide customized or “localized” assortments into each of the store locations based on local consumer preferences.

What Amazon Shouldn’t Want

However, and above all, the Sears or Kmart names are not on anyone’s “value-added” list. Sears and Kmart’s financial plunge; the physical deterioration of their stores; the fragmented and “siloed” operations; strategically chaotic merchandising and marketing strategies and ad hoc implementation, all have contributed to the decimation of the consumers’ perception of the brands. The iconic Sears brand has taken this biggest hit; it was once at the pinnacle of retailing in the 1970s even bigger than today’s behemoth Walmart.

So, in my opinion, bye, bye Sears and Kmart brands, hello Amazon, replacing those brands wherever they appear, store nameplates included. Why not? The Amazon brand name is simply more powerful today, and I suggest even more so among the younger generation, well on its way to becoming the largest consumer segment.

You say, ‘How sad!’ But, get over it. If Sears and KMart aren’t discarded in this kind of a deal, at some point in the very near future, they will end up in the trash bin of history. And “Fast Buck” Eddie “Time to Exit” Lampert will go down though the ages as the iconic financier who won more cash (way more than most people would know what to do with), but failed to succeed at what he declared was his original objective: to return Sears and Kmart to their once powerful positions as iconic American retail brands.

Amazon, a little-known brand just a decade ago, is becoming the new American icon. Maybe acquiring these two fading American icons is a more dignified way to put them to rest than the blunt harshness of liquidation.

Walmart Can Crush Amazon

walmart-amazon-pac-man_rd.3I described Amazon a while ago, as “PacMan,” gobbling up everything in sight, including big chunks out of Walmart. Well, that’s about to change. Walmart can literally crush Amazon. Or at least it can put a lid on Jeff Bezos’ mantra: “get bigger faster.” Bezos will have to begin quantifying just what getting “big, bigger and faster” means. And it will also be the moment we’ve all been waiting for when Amazon will have to start turning a profit. At this juncture, yes, Amazon, the great disruptor, has created a new retail playing field, that they alone have been dominating.

But Walmart is finally rediscovering and reinventing the part of its DNA that disrupted the industry and created a unique new playing field half a century ago, which it alone dominated and grew to its near- $500 billion in annual sales (Amazon is pushing for $90 billion). Walmart is rediscovering its once-revered distribution genius, not just as an incremental update and improvement, but rather to reinvent it altogether. And I predict it will reinvent itself by “leapfrogging” over Amazon’s model (which still has miles to go), and will redefine what getting bigger, faster really means. Talk about a breathtaking spectacle. What does a gargantuan $500 billion, 10,000-store (worldwide – about 4500 in the US) company look like getting bigger, faster? [Read more...]

Technology Doesn’t Change People, People Do

speed kills_FinalPardon me for using the “guns don’t kill people” metaphor. But people are now using the incredible power of technology and the Internet in ways that are disruptively changing our entire culture: some of it awesomely positive, but some of it ominously negative. The myriad of positive effects is accelerating on a daily basis, immediately recognizable as providing “better, easier, quicker, more convenient, more sustainable, more experiential” and on and on. Yet, in my opinion, there is a darker side that threatens to alter our culture in a very negative way.

Today, humans are born with a mouse in one hand and a smartphone in the other. “Digital” is the ‘D’ in our DNA. That is to say that as we evolve generationally, the importance and utility in our lives of newspapers, books, libraries, movie theaters, concert halls, designers and on and on, become irrelevant. Exaggerating a little bit, but you are getting my drift; and we are, indeed, participating in this cultural evolution whether we want to or not. [Read more...]

The Great Retail Demassification

deadmall2The Death and Diminishment of Malls and Other Big Footprints

We are on the edge of the Great Retail Demassification. Prior to the “great disruptor” (that would be the Internet), and before the marketplace became ridiculously over-stored and over-stuffed, consumers were well served by massive regional malls (currently numbering about 1200), in which retailers located their stores and to which consumers travelled enthusiastically. To steal a line from the movie, “Field of Dreams,” retail growth strategy during the pre-digital era could truly be based on nothing more than “build it and they will come.” And they did. Fast forward: consumers have every retail store in the world resting comfortably in their pockets, just a key-tap away, wherever they are and whenever they choose to shop for exactly what they want. Why, then, would anyone spend the time and money to travel to, and shop through the malls; or for that matter, any large, impersonal, traditional retailer? [Read more...]

The British are Coming, The British are Coming

RR_MarigayMarigay McKee’s Revolution?

First of all, along with many industry luminaries, I extend a warm welcome to Marigay McKee to this side of the pond, and especially to New York City: the most intensely competitive city in the most ferociously competitive country on the planet; massively over-stored; stuffed and web-sited; and with the most complex distribution and marketing infrastructure in the world. And I’m sorry to start off with such a negative tidbit, but as people get to know me they understand I tend to remind them of the darker side of things. Usually my observations are followed by: “so good luck!.” And in Ms. McKee’s case, it’s augmented by: “particularly since she is coming from the role of chief merchant of one privately-owned store to president of 41 publicly-owned stores, with a lot of underperforming doors.” [Read more...]

Amazon “Nailed”…For Now

Jeff Bezos was quoted at an Aspen Institute awards dinner, “Invention requires a long-term willingness to be misunderstood.”

Okay Mr. Bezos. However, I must say that my friend and columnist for this publication, Warren Shoulberg, didn’t misunderstand your “invention.” In fact, he nailed it in this issue, at least for now. His article, “Down by The River,” provides a clear and brilliant insight into the breadth and depth of that omnipotent “river,” indeed, sparking the “fourth distribution revolution.” It also sends a strong and provocative message to all retailers, large and small, both online and off: you are getting your “e-butts” kicked, and you might as well concede “game over.”

He suggests that even if you catch up, it will be too late.

Yes!! … But for the 70% on the Ground

I totally agree with Warren about kicking “e-butts,” but what about the share of total retail sales owned by the real butts on the ground? Currently, varying between 70 to 95 percent, depending on the category. That’s a whopping big share flowing through the various physical distribution platforms in this omnichannel new world. So, even if, as Forrester Research predicts, that someday e-commerce may account for 30 to 40 percent of total retail sales, the omnipotent Amazon will not even be a player on the biggest “real butts” playing field, unless …

They Hit the Ground

And if Amazon does go physical, as predicted in my co-authored book, and in many articles in this publication, they will hit the ground running, no — sprinting. I say sprinting because, they will not only be adding a sixth distribution point to Warren’s “fourth revolution,” Bezos will be launching a new “real butt” model that will — well, kick “real butts.”

Using their Pentagon-sized database and the hundreds of huge distribution centers they are now building across the country, I envision small, experiential showroom-like offshoots of those centers, spreading into neighborhoods, and physically and digitally connecting/engaging with each local consumer. Their ‘big data’ already tells them what each of those people desires. And all of the technological gizmos and gadgets currently being tested and tried by the “real butts” will likely be improved and added to by Amazon when they hit the ground.

And They Will

If Bezos is as brilliant as reported, he ‘gets it,’ and knows this is a next phase. The omnichannel concept is not just for brick-and-mortar retailing. And the three-to-four-times more revenue producing synergy created by both online and offline shopping options, is a metric Bezos can’t ignore, to say nothing of the absolute dollars he will be leaving on the real butt playing field if he chooses not to play.

Oh yes, understand one other thing about his “invention:” you may have to wait (not long), but he will play.

China Seeks Low-Cost Production

china_factory_main.top copyIn the United States

Beware of what you wish for. For all of the “pollyannas” who have been rooting for manufacturing jobs returning to the good old USA from low-cost countries such as China, they may just be getting their wish; but not in the way they intended.  It will end badly.

In a perverse kind of irony, it appears that the United States may be evolving into a low-cost country, wooing China-based manufacturers to set up shop here — at least in the textile and yarn industries — which the US lost to Asia and the Far East in the 70s and 80s.

In fact, several Chinese yarn and textile manufacturing businesses have already moved to the United States, primarily in the southern states where the manufacturing skills still reside and where most of those textile jobs were lost to lower-cost countries. The region also has state and local governments eager to boost their economies and decrease unemployment, and willing to provide significant tax breaks, bonds to defray project costs, grants, and job-development credits. [Read more...]

Now it’s Eddie “The Whining Professor” Lampert

Lampert_Einstein_2The ‘fat lady’ is getting ready to sing.

I don’t know if Eddie Lampert’s recent quote in The New York Times was intended to be a tutorial on business or if he was just whining about his long and ongoing failure to fix the miserably declining retail mess called Sears Holdings (of which he is chairman and CEO).

Read this and imagine hearing him saying it:
“I’d like to go faster. I’d like to go bigger. We’re just not making money, which makes it much, much harder to fund the transformation.”

Doesn’t that sound like whining to you? It sure does to me. Of course I’ve purposely made myself privy to all of his many ‘trickster’ statements ever since he cobbled together the two ‘Titanics’ in 2005, better known as Kmart and Sears. And I’ve attached as many descriptive monikers to his name as there have been tricks up his sleeve. From Eddie, the “magician” to “fast buck” Eddie to “Dr. Strangelove” to Eddie “hedge-your-bets” Lampert, and now I give you Eddie “the whining professor” Lampert. [Read more...]

It’s a Bird, It’s a Plane…NO, It’s Amazon

amazon-pac-man_rd.2It’s a state. It’s a city. It’s a country. It’s a movie producer, a real estate broker, a publisher, a wholesaler, a fashion house, a distributor of anything and everything. It’s really anything you want it to be. However, unlike Superman who could be seen and recognized, Amazon is still masked in the fog of the unknown. Nobody knows how to accurately and succinctly describe Amazon. However, since it sells lots of stuff to consumers, it is most often referred to as a retailer, and therefore, traditional retailers’ biggest fear. Described as Pac-Man in a previous Robin Report, chomping up share of market in multiple industries, Amazon is now pushing $80 billion in revenues and growing at 20+ percent a year.

E-commerce start-ups, which display positive growth trajectories, have been more than happy to get acquired, or to merge with Amazon. And the range of such deals over the past many years just confirms the fact that Amazon is an all-inclusive, ‘boundary-less’ world of whatever one might want or need. The list is endless, ranging from drugstore.com, to pets.com, wineshopper.com, audible.com, shopbop.com, foodista.com,and zappos.com. And these are just a few.

Ironically, or brilliantly, Amazon is most often operating with a red bottom line. This, of course, is simply absurd, counterintuitive and unacceptable for most traditionally grounded businessmen, particularly since this has been CEO and Founder, Jeff Bezos’ ‘MO’ from Amazon’s day one. How does he get away with it? Well, Wall Street not only accepts it, they totally understand that it’s an expansion and growth strategy without end, not limited to any product or service category, to any consumer segment, to any geography. It is simply a distribution platform, able to distribute anything and everything to anybody and everybody, at any time, anywhere in the world — and soon to be distributed the same day.

So Bezos continues to take any leftover cash from revenues and throws it at new business launches. And investors have learned to not only expect and accept it, they, well … invest in it.

While Walmart is still the world’s largest retailer, and recently declared that their approximately 4500 stores are indeed, distribution centers, they are so established in the minds of consumers as a traditional brick-and-mortar retailer, selling basic, commoditized ‘baskets’ of products and services at rock-bottom prices, that it would be near impossible to transform itself into the Amazon model.

Having said that, we do not count the Walmart ‘behemoth’ out, do we? Pushing towards $500 billion in sales, with a mere 1% to 2% (roughly $5 billion) of sales generated online, its digital future should be its oyster. However, given its established business model, with a narrower range of product or service avenues for growth compared to the ‘boundary-less river’ of Amazon, I just don’t see a horse race in the future when Amazon reaches Walmart’s size and begins to pull away.

And for the rest of you, regardless of the industry you are in, your product or service category, your position as luxury or discounter, wherever you are located geographically, just simply expect and accept the fact that Amazon is going to be eating your lunch for a long time.

And believe me, Amazon will open physical buildings, commonly called stores, probably sooner than later. Further, those stores, ‘pods’ or showrooms, or whatever you wish to call them, will offer a level of personalization/localization that traditional retailers simply cannot achieve. Why? Because Amazon sits on bigger data than anybody else on the planet — and they know how to mine it.

Good luck.

COTTON LEADS™ Us to the Promised Land

Robin-cotton-article_FINALAll-In for Planet Earth

As my readers know all too well, I usually write about significant strategic events that have noteworthy impact on both our industry and the larger canvas of life, so to speak. We at the Robin Report make it a point to not report “news,” but rather what the news means and why it matters.

That said, however, I came across some news that I felt was really part of a larger, important trend happening to all consumer-facing businesses.

So to get a perspective in this, let’s start at the beginning, and the genesis and driver of all things commercial: we humans. Human beings are by nature consumers. And as consumers, we’re never satisfied. We’re always trying to use our purchasing power to achieve increased levels of satisfaction, perceived or real.

Take apparel, for instance. A hundred years ago, we bought clothing principally for utilitarian reasons to cover our bodies and protect us from the elements. That pair of cotton dungarees may have been a little heavy and scratchy, and not too flattering, but it did the job.

But vanity and self-expression got the better of us. Pretty quickly, we took functionality for granted, and decided that the clothes we wore needed to be made of finer fabrics and look more attractive.

As the history of apparel evolved, the intrinsic properties of the product gradually took a back seat to the name and logo on the label. Calvin. Polo. True Religion. We didn’t buy clothing to cover our bodies anymore. In fact, as I’ve written about ad nauseum, we didn’t even really need another pair of jeans. We bought them for a zillion reasons, not the least of which was to project a certain image and lifestyle that we aspired to. We bought them to impress, “fit in” or “fit out” as outliers. I could write a whole book about why we buy clothes, but I’ll spare you for the moment.

All for One and One for All

So, in this world of abundant choice, immediate gratification, and 24/7 online shopping malls, what’s left? We have to admit that we have been living in the era of “It’s all about me.” We expect shopping experiences that just get better and better. We demand it from our retailers, online and off. We want an incredibly memorable experience co-created by ourselves and the retailer that will forever shape our perception of the store We can get that at a place like 3×1 in Soho and have a pair of bespoke jeans custom-made to fit perfectly. They’ll be made out of one of the hundreds of bolts of soft, shuttle-loom-woven selvedge denim they have in the store, and trimmed with hand-enameled buttons selected by moi. And speaking of bespoke, 3D printing today is just the tip of the iceberg.

Wow, we really have climbed a kind of Maslow’s Hierarchy of Consumption pyramid, haven’t we? We’ve moved from needing protection, to wanting quality, to aspiring to a lifestyle, to demanding an irresistible experience. What’s next, saving the planet?

How’d you guess?

The next frontier for consumers is to use their enormous purchasing power for good. Although various terms have been coined to describe the phenomenon – from conscious capitalism to cause-based shopping — the trend is real and growing. Financial services companies are offering mutual funds invested in socially conscious companies. Accessories makers like Thom’s shoes and Warby Parker eyewear are donating their products to people in developing countries, which is really resonating with consumers, judging from their meteoric sales growth. Large retailers are cutting their carbon footprint by managing energy levels, reducing product packaging, making sure their vendors use safe, responsible hiring practices, and even rewarding customers who bring their own bags. Gap gives a10% discount when you purchase their reusable bag and then use it for every visit. And to Millennials, this trend isn’t even trendy; it’s part of their ethos.

All For One Planet

And now, back to the news. Cotton – the king of raw materials – is taking the growing need for social and environmental consciousness all the way back to the farm.

Last week, our friends at Cotton Incorporated, along with their colleagues at Cotton Australia — two countries at the forefront of responsible cotton production — announced a program that will heighten awareness about responsible cotton growing practices in these two countries. Mark Messura, who leads the Global Supply Chain Marketing at Cotton Incorporated, said the initiative, called Cotton LEADS™, was developed in response to “growing downstream concern for upstream issues.”

Cotton LEADS™ is aimed at textile brands, retailers and manufacturers committed to sourcing cotton that is grown in a responsible and transparent manner. Validating the Cotton LEADS™ program will be the national-level oversight, regulatory enforcement, and transparency of practices currently underway in both countries. It will include both conventionally and organically grown cotton.

The positive change that will result from this system will be found in water and soil conservation, pesticide regulation, child protection, and workplace safety, and be continually measured and improved. It will do things like help farmers optimize irrigation and watering schedules, calculate precise fertilizer needs, detect viruses and other pests that decrease crop yields, and more.

Retailers and brands that want confidence and integrity in their supply chain and want to deliver high quality cotton products to their customers will become partners in Cotton LEADS™. It worked for the architectural and building industry with the USGBC LEED certification, so it should be a slam-dunk for apparel. Because these days, it’s not enough to be better, chicer, cheaper, and an impresario of an irresistible experience, it has to save the world, too. And that’s not cynicism talking, that’s good business practice.

“Bargain Fever” Meets “The Age of Oversupply”

Like Abbott and Costello Meeting Frankenstein

If you read “Bargain Fever: How to Shop in a Discounted World,” by Mark Ellwood, you will roll on the floor belly laughing until you read “The Age of Oversupply,” by Daniel Alpert. Then you’ll understand the cause of consumers’ addiction in Mark’s ‘discounted world.’ It will not only make you start weeping, it will also scare the hell out of you. Kind of like Abbott and Costello giggling about those goofy consumers on Black Friday, pushing and running over each other to get their “fix.” When lo and behold, they round a corner and who’s staring them in the face? That would be Frankenstein.

Robin-Blog_Oct.-13_Rd.2.2Indeed, “The Age of Oversupply” is a global Frankenstein of our own making. And ironically, if we hadn’t over-stored, web-sited, over-stuffed the world, and printed money by the trillions — yes, if we hadn’t built an age of over-supply — Mark would not have had anything to write about. Alas, he has essentially been able to turn a truly horrific and deleteriously vicious cycle into kind of a comedic landscape of a compulsive and obsessed culture of consumerism with dysfunctional shoppers in a collective addicted frenzy to hunt down the best and biggest discount “rush.” And most often, the drug of choice is simply the “deal” itself. It’s become pretty clear that people really don’t need yet another product or service in our over-supplied world. But they can’t help themselves. Mark calls the addictive drug, “buyagra.”

In my opinion, the notion that the discounted price is, in fact, the drug, (not the product, which they don’t need), is why $5 billion in revenues “walked” out the door at JC Penney in 2012, locked away in consumers’ pocketbooks. And it’s why it didn’t “walk” across town to Kohl’s, Target or Macy’s. The revenues exited the JC Penney stores and disappeared because JCP got rid of the “drugs” (discounts). The disappearing $5 billion is a story deserving its own blog.

Anyway, with a wry sense of humor, Ellwood spews forth with one hilarious story after another, and pretty much runs the gamut of consumers’ rabid and nutty searches for every possible form of discounting drug known to mankind (with an enlightening historical narrative along the way). And of course, we also get a good look at the “drug lords” (retailers), supplying the fix, creating an equally bizarre array of discounting schemes.

For example, there’s the pastor’s wife who marshals an army of stay-at-home moms to help run her coupon-brokering business, netting more than $1 million a year. Or the socialite-only sample sale ‘Fight Club’ where discounts are secretly offered to an elite group, and membership is rescinded if you tell anyone about it. Not to mention the gas station operator that silently uses dynamic pricing offering discounts at certain times of day. Or the fact that Chanel, upon attempting a “liquidation” of some of its handbags via Neiman Marcus’ Last Call outlet stores, discovered they ended up on eBay. This begs the question: is this process just a new form of business-to-business discounting? If eBay can’t get rid of it, where does it go? Perhaps it winds its way down to one of those luxury “swapping” sites, or flea markets, or one day, maybe in 7-Eleven or Dollar stores?

And yet, as one crazy anecdote after another unfolds through eight chapters and about 200 pages, the underlying horror of reality begins to emerge for those with even half a brain in the retail business and just a modicum of interest in discounting’s ultimate impact on the overall economy. So I suggest you read the book. And, if and when you can see through your chuckles to Mark’s irony and the emerging head of Frankenstein, then pick up “The Age of Oversupply” to understand why retailers began such deleterious discounting in the first place, and why they are doomed to continue it in perpetuity just to survive.

From a macro-perspective, author Daniel Alpert’s thesis can be summed up with key points outlined in his introduction, as follows: “Via extraordinary monetary-easing measures, the developed world’s central banks have turned trillions of dollars of financial investments into so much cash that it is metaphorically bulging out of the pockets of banks and other investors. Yet it is not getting lent and it is not getting invested in new capacity. Why?

“In a nutshell, the reason that the enormous ocean of liquidity is not being deployed is that there is so much global supply and excess capacity of labor, plants, equipment, and goods and services relative to present demand that there is little reason for private-sector investment in the development of additional capacity to produce additional supply.

“What we have on our hands is a supply-side nightmare scenario.”

Alpert goes on to speculate that all of this “throwing easy money” at the problem simply creates valueless “bubbles” that pop into recessions (as we’ve witnessed), with the “Great” one being a forewarning of the “Apocalyptic” one that is sure to come.

Looping back to the micro-perspective and retailing, the discounting of goods simply began because of, well, over-supply. By default, it became the weapon of choice to undercut the price of hundreds of equally compelling competitors’ products. And perversely of course, retailers have now “hooked” consumers into their addiction, and thus, the race to the bottom perpetuates itself.

Furthermore, if you are savvy enough to understand the dynamics and futility of this conundrum, and the full-on global impact of “The Age of Oversupply,” you will also realize this is a death dance that will end badly, very badly. In fact, global economic collapse,“badly.”

And, in my opinion,(and perhaps the good news), since the world is now so financially and economically integrated, such a collapse would drive the ultimate “backs-against-the-wall” moment, thus, forcing some worldwide collaboration to create a new global monetary and financial structure based less on the profit and material growth motives of capitalism (which no longer works, even in its “managed” form, and essentially drove us to our current quagmire), but, more on some mechanism that will incentivize sustainable improvement of human living conditions based on some balance of nature. This may sound a little esoteric. However, I would cite the Patagonia apparel brand as a very real example of a business that eschews growth in favor of sustainability to the point where they would rather repair an item for one’s further use than selling a new one. And, every other aspect of their business focuses on reigning in reckless consumption and accommodating a healthy environment.

Anyway,  I do believe if some form of this kind of transformation does not happen, we will surely devour the planet or destroy our species while doing so.

As always, have a nice day :)

The Bird’s Eye View

RR_lemmings-RD2Actually, lemmings are a lot cuter than most investors, but investors are sure acting like lemmings, all heading over the proverbial cliff.  And while lemmings in real life do not partake in mass suicide, venture investors in real life have been, and continue to, inflate a massive suicidal “bubble,” metaphorically floating above Silicon Valley in danger of popping any day now.

In this flat economy, with billions of dollars of “dry powder” (sitting on the sidelines), the ‘lemmings’ are frantically looking for the next Facebook or Bonobos or the new ‘cool’ to throw money at. According to PWC, in 2012, 65% of venture capital ($8.3 billion) was invested in 1,266 deals in the software industry, up 10% over 2011, and the highest since 2001.

So, there are ‘next big things’ popping up all over the place, dreamed up by Zuckerberg wannabes, (whose ‘big thing’ is now a big question, by the way).  And big cash is being ‘burned’ through like there’s no tomorrow, as nine out of ten of them aren’t making a dime.  Bubble, bubble, toil and trouble, or something like that, as the bubble inflates to its popping point.