The Marx factory fire in Girard PA

The birthplace of scores of classic toy trains fell victim to the Marx factory fire in Girard, Pennslyvania.

The old Marx factory stood at 227 E Hathaway in Girard, Pennsylvania. For a time in the 1950s, Marx was the largest toy manufacturer in the world. Marx made toy trains at the site, which caught fire on July 12, 2016. There were no immediate reports of injuries, fortunately. There was very little news coverage of the fire.

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The freedom to fix our stuff

This week the Wall Street Journal ran an editorial about the right to fix our gadgets. It was surprisingly pro-consumer. The author wrote about a friend whose Samsung TV broke due to $12 worth of capacitors and how he fixed the TV, with no experience, in a couple of hours. I can relate, though I took the easy way out.

He lamented the throwaway of gadgets being unethical on several levels, and I agree. I also remember a time when it wasn’t this way.

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1984 called. It wants its surveillance back.

So, the reaction to my story about my coworker’s 10-year-old going all Scooby Doo on the guy who had the nerve to steal his dad’s car was definitely mixed. Most people, of course, lauded the 10-year-old’s detective work. Others pointed out the dark side.

And there is a dark side.

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IBM PCjr and Tandy 1000

IBM PCjr and Tandy 1000

On January 29, 1984, two computers hit the market. One was Apple’s Macintosh. It needs no introduction. The other was the IBM PCjr. It was a little less successful.

Scratch that. The PCjr is one of the biggest flops in computing history. Few people know much more about it than that. It ended up being an important computer, but it certainly didn’t meet IBM’s expectations. Read more

An Amazon shopping trick

I alluded to this the other day, but some people might find it worth mentioning in its own right. As most people know, Amazon offers free shipping on orders over $25. And if you’re buying something small, shipping can end up being a large chunk of the total bill.

So when buying something sold directly by Amazon or fulfilled by Amazon, you can save the shipping by building a shopping list, if you can put off the purchase a little while.

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Rest in pieces, Borders

The Borders at my local mall is closing today. I’ll miss it.

I still remember when the store was being prepared. It was around the time I got married. My then-pastor said he was really looking forward to it opening. While his wife and his daughters shopped, he could hang out in there. I agreed with him. Nearly every time I went to the mall, I would sneak over to Borders for a while.
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What’s wrong with American manufacturing and industry

I read a disheartening story today. It’s the story of an entrepreneur, making models out of his garage and selling them. A competitor took a liking to his models and started selling crude copies of them, made in China. The competitor is so much larger than him, he can’t afford to sue.

There’s something even more sad than this story, however. It was some people’s reaction to it.The whole thing started out as hearsay on a train forum. Someone noticed a striking similarity between two companies’ competing products. Fans of the larger company rushed to its defense, and someone who claimed to know someone came in with claims about the larger company copying the smaller. Eventually the person who designed the originals chimed in and confirmed that yes, the designs were his, right down to the placement of the cracks on the sidewalk being identical.

He went on to say in very human terms who it hurt. He’s a guy in southwestern Missouri who could make more money as a draftsman, making buildings out of his home for the love of making buildings. He sells the design to another small company in Maine who buy materials, produce parts, and assemble them into kits for sale, employing a handful of Americans along the way.

And, if sales deteriorate too far, eventually he may have to go back to work as a draftsman. Which most likely means some other draftsman will be looking for a job.

Buying the crude, cheap Chinese-made knockoffs from the other company hurts the designer. But not only that, it ripples over to the manufacturer/distributor and its suppliers, all of whom are employing Americans who are just trying to earn an honest wage working for small businesses.

But the copies sell for about half the price.

To some of the people hearing this story, the end–half-priced models–entirely justifies the means. The cheap copy is, well, cheaper, and more convenient–requiring less assembly and being easier to find, since the larger competitor sells its products in more stores–so that’s all just fine and dandy. Who gets hurt doesn’t matter as long as the purchaser is happy.

Maybe the guy just likes jerking people’s chain, or maybe he really believes this, but he was painting the people who felt empathy for the designer as the ones with the problem.

Others present an easy solution: Sue. Well, he’s not stupid. One look at his models should tell you that. He looked into that. The problem is that a one-man operation can’t hope to compete with a company that sells $50 million worth of product per year. Imagine what happens if the larger company generates a mere 100 hours’ worth of billable work for the smaller company’s lawyer, at $400 per hour. That’s a $40,000 legal bill. If the kits sell for $75, their wholesale price is less than 25. That means he has to sell 1,600 kits to cover the legal bill. And in the meantime he also has to sell enough kits to pay himself enough to pay his mortgage, utilities, and put food on the table.

If that $40,000 doesn’t sink him, maybe the next 100 hours’ worth of work will. All they have to do is delay the trial long enough to make giving up look like the best and most reasonable alternative. They don’t have to be right, and they don’t have to win. They just have to make sure the other guy runs out of money first.

Now I know the majority of Americans have no interest in wood and tin 1:48 scale models of general stores. But the wonderful thing about American capitalism used to be that someone working out of a garage or spare bedroom could make niche products and sell them to the people who want them without breaking any laws. It’s one of the ways our ancestors got ahead in life.

I’m not sure my son’s generation is going to have those same opportunities. Not when a big company can come steal products from guys like Dale in Carthage, Mo. with no fear of recourse, and self-centered consumers will gladly snap them up, just because they’re cheaper, even if they know they’re buying stolen property.

People can blame Barack Obama or George W. Bush or Bill Clinton or NAFTA or unions or any of the other usual scapegoats for being the reason why jobs are hard to find. But none of those guys caused the predicament that Dale in Carthage, Mo. is in.

That’s purely the fault of the people who buy knockoff products, with a narcissistic, end-justifies-the-means attitude, and the people who tolerate it.

But it’s a lot easier to blame the politicians than it is to look in the mirror.

How Generation X can take this country back

I’ve done some reading in recent days. First I read that GenXers aren’t happy with Corporate America and the feeling is largely mutual. It appears I’m not the only one.

But I see an opportunity in this. We have a window to take this country back. And I have a plan.The way I see it, the unholy triumverate of big government, big corporations, and big labor has done its best to ruin this country. Big government’s mess needs no introduction. While big labor drove some necessary reforms, it lost its way, asked for too much, and today we see the result when we look at the sticker prices of GM, Ford, and Chrysler vehicles. And as for big business, I could get into specifics, but I see the problem like this: Large corporations think only quarter to quarter, chasing short-term profits and never considering the long term. They hand out raises to their workers that don’t keep pace with inflation, while their CEOs make six- and seven-figure salaries plus equally large bonuses, no matter how badly they do their jobs. Since the people who do the work feel undervalued, they tend to jump from job to job a lot, so institutional memory becomes a thing of the past.

Forget them. It’s time to escape and start over. Here’s the plan.

Minimize the risk.

You can’t very well escape corporate America’s stronghold while you’re saddled with debt. Most small businesses die within three years because at some point in that timeframe the owners find themselves unable to pay the bills. So as long as you have debt, you are corporate America’s slave.

But you can escape. It doesn’t really matter how much you make or how much money you owe–you can be debt free in seven years or less. The main reason this works is because creditors generally won’t loan you more money than you would be able to repay in seven years.

I don’t know how long this movement has existed. My mother and father in law did it in the 1980s. A classic entrepreneurial book by William Nickerson, published in the 1950s, mentions the phenomenon, so it must have existed then.

There are lots of subtle variants on the plan, but it boils down to this. Gather up all your debts–car payment, credit cards, mortgage, student loans, furniture, whatever. Figure out the minimum payment on them. Now take 10 percent of your monthly income. Pick one bill, and add that 10 percent of your monthly income to what you pay on it. (If you can afford more than 10 percent, pay that.) Make the minimum payment on all of your other bills.

After you pay off that first bill, take what you were paying on that bill and apply it to the next one. Let’s say you have two $300 car payments and a $1,000 mortgage. You could start paying an extra $300 a month on one car, for a total of $600, and pay $300 on the other car, and $1,000 on the mortgage. When the first car is paid off, the $600 moves to the other car, for $900 on the car and $1,000 on the mortgage. Once the other car is paid off, pay $1,900 per month on the mortgage.

The hardest part is initially coming up with that $300. The rest is fairly easy because you’re always paying the same amount every month, but the longer you go along, the faster you’re retiring your debt because you’re paying more principle and less interest.

How you pick the order is up to you. Mathematically speaking, you’re always best off applying your extra payment to the debt with the highest interest rate. But in every analysis that I’ve seen, the difference between paying them off in the best possible order and worst possible order is only a month’s worth of payments. Many people suggest paying off the debt on which you owe the least first, so you get the psychological boost of having eliminated one debt.

I started in November 2004. It took less than a year to pay off my car. Not long after that I got married, and it only took a few more months for us to pay off my wife’s car. Right now the only debt we have is the mortgage and my wife’s student loans. Barring unexpected emergencies this year, we should be able to pay off our remaining debt by the end of the year. (We may keep one of my wife’s student loans, since the interest rate is lower than the rate we get on one of our bank accounts.)

This is the most important thing: I fully expect to own my home outright at age 33. If I played by the rules most people play by, I’d make my last payment on it at age 58.

Here’s why I say to eliminate your debt. Take a look at what you spend every month. When my wife and I looked at our spending, we found we were spending more than $2,000 a month on car payments, the mortgage, and her student loans. Meanwhile, we were spending less than $1,000 on food, utilities, and everything else. So in theory, without debt, we could live on $12,000 a year.

Which leads to the second part of the plan.

Find a business you can start that will make you more than $12,000 a year

I’m not talking about multi-level marketing or any garbage like that. Start a real business that you control and makes money for you.

I won’t tell you what business to start, because I only know what works for my wife and me. But I’ll give you some questions that will get your mind rolling.

What can you do better than anyone else? There must be something that you know how to do really well and can leverage. Find it.

What do you know how to find or make less expensively than anyone else? This can replace the question above, or supplement it.

What do you enjoy doing? If you actually enjoy doing it, you’ll work harder and more productively. I would moonlight fixing Amiga computers if there were any money in it. Frankly I find modern computers uninteresting, so I don’t moonlight fixing other people’s computers at home, because I find it boring and stressful.

And finally, what problem do people have that you might be able to solve for them?

Mull those questions. It’s OK if you don’t immediately know the answer to any of those questions, or if you know the answer but they don’t bring a business plan to mind. Keep thinking about it, and keep looking around for opportunities.

I started looking for something in mid-2004 when I realized I didn’t make enough to support my wife and me if she was in school. I don’t remember now when I first had the idea that ultimately worked, but I followed through on it in June 2005. It took two weeks for anything to come of it, but it did finally work, and it’s still working today.

Once you get an idea, explore its feasibility. Look and see if anyone else is doing it. See if you can do it better or cheaper, or in a slightly different way than everyone else does it.

If the idea looks feasible, start doing it part-time. Don’t quit the job yet. The idea is to get established while you still have the safety net of a 9-to-5 job. If you’re thinking about a service, start advertising on Craigslist. If it’s a product, eBay and Craigslist are possible venues. The upside to Craigslist is that it doesn’t cost anything to advertise there. The real key is to look at your questions as an opportunity to get creative, rather than as blockades to your progress.

Here’s one strategy for dealing with those questions. Ask yourself those questions, especially around bedtime. Your subconscious will mull over the question even while you sleep. The answer will take some time to come, and will probably come at an unexpected time. But I’ve tried it and it works. Your subconscious mind may be the most powerful tool you have.

Notice I didn’t say to go borrow money. One of the reasons businesses die young is because they can’t pay their debts. Keep your overhead low, and you have a better chance of being successful. Operate on a shoestring.

Once you have an idea and something to do, give it a try on a small scale. At this stage, don’t put up any more money than you’re willing to lose, and don’t be afraid if your initial attempts don’t get anywhere or fail. You’re learning. If you’re starting while you still have a job and you’re in the process of paying down your debt, you can afford to fail a little. At the early stages, gaining information and wisdom and knowledge is more important than success. Get enough of those three things and you will find success, and if and when success wanes, you’ll find it again.

The problem with big government, big corporations and big labor is that they are successful, but by and large they are not well informed, they aren’t knowledgeable, and they certainly aren’t wise. That’s why we’ve seen so many spectacular failures in the last 10 years.

I see lots of small business owners who aren’t informed, knowledgeable, or wise either. When their success runs out, that’s probably the end of them. But there are also small businesses in St. Louis that stood the test of time and became institutions. Lots of Fortune 500 companies have come and gone in St. Louis since Ted Drewes Sr. opened a frozen custard stand on Natural Bridge Road in 1930. And lots more will come and go before the two Ted Drewes locations close up for good.

During this time that your small business is struggling and you’re gathering knowledge abd wisdom, you’re still working for someone else and you’re paying off your debts. But along with those struggles, you should have some encouraging successes. Follow those successes, and tweak things along the way.

Chances are, by the time you have your debt paid off, you’ll have a successful small business that’s capable of bringing in enough money to support you full-time. So you can step out of the corporate world and into business for yourself. From there, the sky’s the limit, because you’re no longer working hard to make money to support the pyramid of management above you–you only have to support yourself. And without the burden of personal debt and corporate overhead, you’ll be more free to be successful.

And how does this save America?

On May 11, 2006, Robert X. Cringely wrote, “I’m counting on Google and eBay to save America.” He didn’t elaborate, but here’s what I think he meant.

Just before the dawn of the 20th century, there weren’t a lot of large corporations in the United States, but there were plenty of bright entrepreneurs with ideas. Thomas Edison, Henry Ford, and the Wright Brothers are examples.

The problem today is that large public companies don’t breed great people like Edison, Ford, and the Wrights. The shareholders won’t stand for it. Shareholders care only about the profits on the next quarterly report, and if the company doesn’t deliver, investors dump their shares, the stock price drops, and then (and only then) executives start losing their jobs. So companies tend to play it safe to protect their executives.

We’re seeing this problem with eBay right now, of all things. While eBay remains hugely profitable, its investors got spoiled with exponential growth. Now that the profits are steady but growth has leveled off, investors are whining, and eBay is trying all kinds of goofy things to try to recapture the magic. None of it’s really working, but they sure are alienating a lot of their best merchants.

Two years after Robert X. Cringely wrote those words, I no longer know if eBay is the right company for this recipe to save America, but it has the right business model. Someone else will pick it up if eBay decides it doesn’t want it anymore.

The small entrepreneur can’t afford to compete head to head with General Motors. But Google gives small businesses affordable, targeted advertising, while eBay and other online marketplaces provide small businesses with a low-overhead distribution channel. Google and eBay (or their replacements) won’t directly save America, but the small, bright, nimble businesses that they enable will. Small businesses can afford to think long-term, they can deliver a better product with better service (and do it faster) than the huge, lumbering behemoths, and they aren’t slaves to whiney shareholders who have lots of money but little idea how to run the companies they invested in and no vested interest in the company’s long-term health because in five years they’ll have their money somewhere else.

And since small businesses have more control over their own destinies, they’re in a better position to adapt.

If we believe the Businessweek article I linked above, corporations need us GenXers. But in my experience, as well as the experience of hundreds of people who commented on the article both at Businessweek and on Digg, by and large the corporations don’t want us. So the best thing for us to do is to compete with them. And in the long run, I think this country will be better off for it.

Why small business is better than big business

Technophilosopher Paul Graham (whose essay on Bayesian filtering spurred the development of one of the more popular methods for blocking spam) has some thoughts on what companies ought to learn from open source and blogging.

I really liked this quote: [Those who] run Windows on servers ought to be prepared to explain what they know about servers that Google and Yahoo don’t know. I know Google and Yahoo are a whole lot smarter than anyone I’ve worked for who runs on Windows.

But the most poignant bit for me was this: People work a lot harder on things they like.

I believe this is why successful small businesses are successful. Millionaire owners of small businesses often work very long hours–possibly 10 or even 14 hours a day. But many of them probably don’t realize they’re working those long hours because they enjoy it.

I’ve noticed this with my wife when I work with her. She doesn’t keep track of the hours she works because she doesn’t care. And at the end of my workday when I come home, we might spend most of the evening working, but at the end of the evening, we’re no more tired than we would have been if we’d spent the evening sitting on the couch watching TV.

As I watch the rise and fall of companies in the computer industry, I see this same pattern. Why can’t Microsoft sustain the growth of its early years? There are lots of reasons, but in the very early days when Bill Gates and Paul Allen actually spent time writing code alongside their employees, everyone worked excruciatingly long hours, but they did it out of choice. Microsoft is notorious for trying to force those kinds of hours out of its workers today (the book Microserfs details this in general). Could the reason every Microsoft operating system released in the last 15 years has been delayed be because they’re just a labor, rather than a labor of love?

I think that has a lot to do with it.

And I think this is the reason why I’m not a fan of big business and never have been. Don’t get me wrong; I’m no fan of big government or big labor either. Big anything is out of touch and can’t help but focus more on self-preservation than on the things it’s doing and why those things are interesting and important. I can’t necessarily tell you why any given thing is interesting or important but I can tell you without even seeing it that it isn’t because of the amount of money it can make.

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