April 18, 2021

Common Sense: At SAC, Rules Compliance With an ‘Edge’

The firm said it spends “tens of millions of dollars,” on compliance, “deploys some of the most aggressive communications and trading surveillance in the hedge fund industry,” has hired big-name lawyers like Peter Nussbaum and Steven Kessler to oversee compliance, and has a staff of “no fewer than 38 full-time compliance personnel.”

Which sets up the question: What were they doing?

On Thursday, the federal government charged SAC with running an insider trading scheme that flourished from 1999 to 2010, the result of an “institutional indifference” to unlawful conduct. On the face of it, it’s impossible to reconcile SAC’s avowed devotion to both legal and ethical behavior and the government’s allegations.

It may be true, as SAC concedes, that even the best compliance programs “may not detect individuals determined to evade firm policies or break the law.” But that doesn’t explain the insider trading “on a scale without known precedent in the hedge fund industry,” as the government put it, which already includes guilty pleas by five employees, insider trading indictments of two more, and SAC’s own settlement of Securities and Exchange Commission charges for $616 million, the largest insider trading penalty ever.

Whether the elaborate compliance system at SAC was little more than a Potemkin village will be at the center of both the S.E.C.’s civil enforcement against Steven A. Cohen, SAC’s eponymous billionaire founder, for failure to supervise his employees, and this week’s criminal indictment against the firm. (Mr. Cohen hasn’t been charged with any crime.) As Harvey Pitt, the former S.E.C. chairman, told me this week: “When it comes to compliance, you have to live, eat, breathe and drink it. It has to be embedded in a firm’s DNA.” And that process, he emphasized, had to start at the top, with Mr. Cohen.

SAC maintains that’s exactly what both the firm and Mr. Cohen have strived for, and that “Mr. Cohen himself exemplified” that “compliance is the responsibility of all of its employees.”

Such an effort, SAC said, began with its hiring process. The “firm does not take lightly its decision to employ someone,” it said in a document responding to an S.E.C. action last week contending that Mr. Cohen failed to supervise SAC’s employees. The firm said it refused to hire candidates because of concerns about compliance issues. When I asked for an example, the firm declined to identify any.

But the government cited multiple examples of SAC employees who were hired precisely because of their purported “contacts,” including one who “has a share house in the Hamptons with the C.F.O.,” or chief financial officer, of a publicly traded company and is “tight with management” at the company, as one internal SAC e-mail enthused. Another prospect was praised for “mining his industry contact network for datapoints.” The government said SAC rarely, if ever, showed any interest in ethics, integrity or compliance in vetting candidates.

On the contrary, when SAC’s legal department raised objections to hiring Richard Lee after another hedge fund warned that he was part of an “insider trading group,” Mr. Cohen “decided to hire Mr. Lee anyway,” and overruled the legal department, the indictment contends. Mr. Lee began insider trading almost as soon as he was hired. (Mr. Lee pleaded guilty this week to conspiracy and securities fraud charges and is cooperating with the government’s investigation.)

SAC has also stressed its continuing training programs, which include requiring employees to certify their adherence to a compliance manual and attend sessions with “prominent outside speakers.” These included Mr. Pitt, who is now chief executive of Kalorama Partners, a consulting firm that advises clients on compliance issues; and Stephen Cutler, a former chief of enforcement at the S.E.C. who is now general counsel at JPMorgan Chase, who spoke to the employees while in private practice. Mr. Cohen himself was “an active participant in this process,” SAC said.

But not all that active, apparently. Mr. Cohen didn’t bother to attend all the lectures, according to participants, although he did meet with the speakers individually.

Article source: http://www.nytimes.com/2013/07/27/business/at-sac-rules-compliance-with-an-edge.html?partner=rss&emc=rss

Airlines Confident in Boeing’s 787, but Doubts Linger

Air accident investigators continued on Sunday to try to figure out why a parked 787 Dreamliner caught fire on Friday in London, while airlines around the world kept flying the plane and expressed confidence in it.

Passengers and investors in Boeing, the Chicago-based plane maker, were left to make their own calculations about how serious the problem would turn out to be.

In that sense, the situation seemed like a return to the limbo of early January, after a battery fire broke out on a Dreamliner parked in Boston and federal safety officials began an investigation. Only after a battery started smoking on another 787 days later were regulators compelled to ground the planes worldwide for four months.

Now, the latest episode raises its own puzzling question: Is the innovative jet passing through mere growing pains, or is there a more serious problem in its design or manufacturing?

Investigators in London have essentially put to rest any concerns about a repeat of the battery hazards. But it is still not clear whether the fire on the Ethiopian Airlines 787, which sat unoccupied in a remote spot at Heathrow Airport, was caused by something as simple as a galley stove that had been left on or a faulty component, or indicated a more serious problem.

Several of the 13 airlines flying the plane, including Ethiopian, and several that have ordered the planes, including Virgin Atlantic, said they were confident in Boeing and were sticking with the Dreamliner. Some frequent fliers and passenger-rights groups, however, were more skeptical.

“What do we tell consumers? ‘Flier beware,’ ” said Kate Hanni, the founder of FlyersRights.org, an airline passenger advocacy group.

Ms. Hanni, a real estate broker in Napa, Calif., said she was personally concerned because she and her husband were scheduled to fly to Tokyo on the Dreamliner in mid-August. Depending on the outcome of the investigation into the fire at Heathrow, she said, she might ask to fly on a different aircraft.

“I am very nervous about it,” she said. But, she added, “so far the Dreamliner appears to be safe while in flight.”

United Airlines, the only United States carrier that is flying the 787 so far, said on Sunday that it had not made any changes to its 787 flight schedule as a result of the fire. “We won’t speculate on the cause but will closely monitor the findings of the investigation,” it said in a statement. British Airways reiterated that it planned to start its Dreamliner service on Sept. 1.

Several airlines also said they had been in close touch with Boeing, which has sent a team to London to support the British investigators. Boeing said in a statement that the safety of passengers and crew members was “our highest priority.” It added: “We are confident the 787 is safe and we stand behind its overall integrity.”

Still, unless the cause of the Heathrow fire is pinpointed quickly, Boeing, the airlines and the Federal Aviation Administration could once again find themselves in a delicate spot in balancing passenger safety with high financial stakes, including millions in lost revenue that would come from any delays or suspensions in service.

Boeing and its suppliers have invested more than $20 billion in the Dreamliner, which uses lightweight carbon materials and more efficient engines to cut operating costs by some 20 percent. The company has delivered 68 of the planes to the 13 airlines, and it expects to sell thousands of the planes over the next two decades.

The F.A.A. and the National Transportation Safety Board, which investigates aircraft safety issues, are assisting the Air Accidents Investigation Branch in Britain with the Heathrow inquiry. Federal officials said the F.A.A. typically needs to have more information about what went wrong — and indications that the problems apply to more than one aircraft — before it takes any action.

Former federal safety officials said that so far they were not picking up the kind of urgent alarms about the Heathrow fire from current safety officials as they did after the Boston battery fire. Aviation consultants said the airlines were also not quite sure what to make of the problem, in part because Ethiopian Airlines workers could have made a mistake in doing maintenance on the plane.

Natasha Singer, Georgi Kantchev and Stephen Castle contributed reporting.

Article source: http://www.nytimes.com/2013/07/15/business/airlines-confident-in-boeings-787-but-doubts-linger.html?partner=rss&emc=rss

The Haggler: Tracking a Child Support Mix-Up In New York

There are surveys that cover just about every aspect of air travel: rates of on-time departures, rankings of frequent-flier programs, and on and on. But the Haggler has never seen a study that shows which airlines regard fliers as the biggest idiots.

Huge omission, right? And until a thorough inquiry is undertaken, the Haggler contends that US Airways takes the dimmest view of its customers’ intelligence. On what evidence is that conclusion based? When you call the airline’s reservation number, the first utterance you hear after you shimmy up the phone tree and await a representative is this:

“Note that under federal law, passengers are prohibited from bringing hazardous materials on the aircraft.”

Is there a sentient human on this planet who is unaware that bringing hazmat on a jet is verboten? Is it not self-evident that loading up your baggage with potentially lethal, flammable and/or toxic chemicals is uncool, not to mention illegal?

The most charitable explanation here is that US Airways is just trying to kill some time by filling your ears with factoids, as you stew on hold. But being called a dummy, by implication, doesn’t make the stewing more pleasant. Quite the opposite. Why not just remind us to wear clothing to the airport? Or to walk upright?

The Haggler posed these questions to US Airways, mostly because he can. A spokesman, John McDonald, wrote back and noted that a lot of passengers have no idea how many everyday items are considered hazmat by the Federal Aviation Administration. He listed some: spare curling-iron gas cartridges, dry ice in an airtight container, a can of aerosol spray starch, loaded firearms.

The loaded firearms — not really a surprise. But the others are.

“Our friendly little reminder on the start of the call,” Mr. McDonald wrote, “is just to pique interest, as it did with you, to ask the question: What is hazmat?”

Respectfully, as an interest piquer, the “little reminder” stinks. So here’s some free advice: Bag the little reminder and give callers a list of the surprising items that are banned. Or list eight items that might be hazmat and challenge callers to pick out the one that isn’t.

“Great idea,” wrote Mr. McDonald, effectively neutralizing the Haggler with cheap praise. “I’ll pass it along to our reservations team.”

Problem all but solved.

Question: Is there any way to improve the world that is too trivial for the Haggler?

Apparently not!

Enough of this folderol. It’s question time.

Q. I am a single mother, and my case does not involve bad corporate customer service but rather the seemingly impenetrable New York City Office of Child Support Enforcement that has for months now miscalculated the child support arrears owed by my daughter’s father.

An order was issued by family court on Nov. 30, 2012, specifying that the support collection unit of the O.C.S.E. was to assess the father’s arrears at $12,568 plus the previously calculated arrears, which were $7,439. Instead of adding the new arrears to the old, as instructed by the court order, the O.C.S.E. substituted the new arrears of $12,568 for the previously calculated arrears of $7,439. An amended order was issued on Jan. 8, 2013, in an attempt to be clearer for the O.C.S.E.’s employees.

The amended order came only after I spent five hours speaking with eight different people in two different buildings.

But the new order didn’t help. Yet again, the O.C.S.E. simply substituted the new arrears of $12,568 for the previously calculated arrears of $7,439.

I have spent the past four months doing everything within my power to rectify this situation, and I have failed. If I were to seek legal counsel to help me, I’d be spending thousands of dollars to try to get a state bureaucracy to do its job enforcing a court order. The $7,439 that I am trying to get would be spent in legal fees.

If you would consider trying to intervene on my behalf, I would be more grateful than you could know.

L.G.

New York

A. The Haggler has spent little time dealing with the public sector, so he sent an e-mail to Bill de Blasio, the city’s public advocate. Mr. de Blasio, who is seeking the Democratic nomination for mayor, runs an office that mediates between the electorate and the city government. He handed off this matter to a staff member, Phil Walzak, who brought in the office’s director of constituent services, America Canas.

The pair went at this for several weeks. On April 23, Mr. Walzak wrote to say, “Still gathering the details on this case, but my constituent services person says the case outcome is actually positive.”

The Haggler spoke to Mr. Walzak and Ms. Canas a few days later, and they were low on details about what exactly went wrong at the Human Resources Administration, home of the O.C.S.E.

“Why it got screwed up at the front end, we don’t know,” Mr. Walzak said.

“A little bit of a missed communication,” Ms. Canas speculated, “and a lot of emotion.”

The leaders at the Human Resources Administration did not offer much more illumination. A spokeswoman, Carmen Boon, initially suggested that this entire matter was fed to the Haggler by the public advocate’s office, presumably to make that office seem like heroes. (Untrue.) Then she e-mailed a statement.

“This is a very rare instance in which an unconventional court order lacking proper terminology and not identifying a specific dollar amount to add back to the arrears balance caused confusion among our staff,” Ms. Boon wrote. “Once the issues with the order were detected, H.R.A. worked as quickly as possible to update the amounts owed and fix this unfortunate situation.”

It would nice to file this entire affair under the category of “learning experience.” But nobody here seems to have learned anything. Other than the Haggler, who learned that he much prefers dealing with the private sector, where blame-pinning is invariably far easier.

E-mail: haggler@nytimes.com. Keep it brief and family-friendly, include your hometown and go easy on the caps-lock key. Letters may be edited for clarity and length.

Article source: http://www.nytimes.com/2013/05/26/your-money/tracking-a-child-support-mix-up-in-new-york.html?partner=rss&emc=rss

You’re the Boss Blog: Up for Discussion: Can Employees Be Rehabilitated?

She Owns It

Portraits of women entrepreneurs.

Susan Parker: Any benefits are temporary, at best.Earl Wilson/The New York Times Susan Parker: Any benefits are temporary, at best.

At a recent She Owns It business group meeting, the owners talked about the odds of rehabilitating an employee who isn’t working out. Susan Parker, who owns Bari Jay, started the discussion by explaining why she was focused on becoming better at ensuring she has the best possible employees.

In 2008, she and her sister Erica Rosenberg inherited the business — and its employees — from their father after his death. Under those circumstances, Ms. Parker explained, she did not, at least initially, have control over whether she had the right employees in the right roles.

Some of those employees had been with Bari Jay for 15 to 30 years. “You have loyalty to them,” she said. This loyalty extends even to employees who have been with the company for far shorter periods of time — to those who helped Ms. Parker and her sister during the difficult transition period. For this reason, she said, “Erica and I have really tried hard to rehabilitate people.” Ultimately, however, she said she had come to the realization: “You just can’t.”

Ms. Parker said she came to this realization — and many others — while reading “Who,” a book on hiring that her business coach recommended.

Deirdre Lord, who owns the Megawatt Hour, said she had also conducted lengthy rehabilitations throughout her career — and come to a similar conclusion. While nobody wants to be fired, she said, she has found that the person who is not working out is often relieved. “There is this sense of, ‘Oh, thank God, we can stop this charade,’” she said.

Beth Shaw, who owns YogaFit, asked a question: What do you do with an employee who is really good at the job itself but has a bad attitude? When dealing with someone who fits this description, she said, she gets tired of the defensive stance and pushback that she and other YogaFit employees confront when offering feedback or suggestions.

Ms. Lord pointed out that it sounded as if this employee was not actually good at the job.

“There has to be a cultural fit,” said Jessica Johnson, who owns Johnson Security Bureau.

“Exactly,” Ms. Lord said.

Ms. Johnson said the resistance to feedback was especially jarring given that Ms. Shaw runs a yoga company, and it was critical that yoga instructors gave feedback. “Even if that’s not your role, there’s a disconnect,” she said. “You’re going to be schizophrenic in your job.”

Alexandra Mayzler, who owns Thinking Caps Group, said her biggest struggle was over how detailed to be when describing job requirements to a new hire. For example, is it sufficient to say timeliness is essential? “To me, that means you get there five minutes early and you’re ready and you have a few minutes to prepare yourself,” Ms. Mayzler said. “For some people, it might mean that you run in on the minute, and some people think if you’re five minutes late, you’re actually on time.”

She also said that she did not want to judge employees unfairly if the problem was her own failure to be specific when explaining job requirements. She said she wondered whether rehabilitation sometimes became necessary because the employer was not clear from the start.

“One of the reasons that I rehabilitated in the past was that I thought, ‘This person’s three months into the job, they know something already,’” Ms. Shaw said. She said another reason was that as the owner of a yoga business, she always felt it was important to “try to bring out the best in people and see the good in them.” But, she added, the values of a “spiritual mission” may not be the same ones that work in business.

Ms. Parker said she had found that any benefits from rehabilitations were temporary, at best.

“That’s what most rehabilitations are, even in relationships,” Ms. Shaw said. “They will rehabilitate, and chances are in three months, most people go back to their old behavior.”

“It’s not that they’re rehabilitated, it’s that they’re performing differently,” Ms. Johnson said.

Ms. Mayzler repeated that her biggest struggle was over whether she should expect employees to share her standards, even if she had not specifically defined the ways in which they should perform their duties.

“It’s a big communication issue, and I think it’s balance,” Ms. Johnson said. “For us, timely might be being there 15 minutes before the meeting starts, but you don’t know how somebody else interprets that, and if you don’t have that discussion. …”

“But if you hire the right person, from the beginning, they should know that,” Ms. Parker said.

“Right, that’s the question,” Ms. Mayzler said.

“Yes, they should know,” Ms. Shaw agreed.

“You shouldn’t have to explain to somebody what timeliness means,” Ms. Parker said.

“I’m not just talking about timeliness, but everything,” Ms. Mayzler said.

Ms. Parker said the book “Who” had been an eye-opener for her. She said it made her realize, “If I hired the right person, I wouldn’t have to micromanage, and I wouldn’t have to explain everything.”

This discussion will continue in our next post. In the meantime, what has been your experience with attempts to rehabilitate employees?

You can follow Adriana Gardella on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/04/24/up-for-discussion-can-employees-be-rehabilitated/?partner=rss&emc=rss

Special Report: Well Appointed: Among the Pink Organza, Down-To-Earth Basics for Business

For men — well, let’s just say that voluminous Bermuda shorts worn with socks and lace-up shoes is the new bottom-half suit for warm weather.

Except that it isn’t. At least, not for the 99 percent of fashionable but businesslike consumers, who need to put on something on in the morning that will not provoke ridicule, snarkiness or even the most slightly raised eyebrow from anyone during the workday — whether loud-mouthed taxi drivers, colleagues in the cafeteria or somber chief executives.

All of which is why, runway conceit notwithstanding, luxury houses all insist they have got more in their collections than fashion magazine fodder. To test that theory, we went shopping with two business executives, neither of whom is in the fashion trade, at some of Milan’s top boutiques. The question: Is there anything truly office-ready in the spring offerings?

One of the executives, whom you will meet farther down, is Stefano Mantegazza, head of European business for NTT Data, a global player in information technology. But let us first go to the fitting room with Kelly Russell, an American-born, Milan-based working mother of three.

As managing director of the Riccardo Catella Foundation, a nonprofit organization that promotes community and cultural projects to benefit urban spaces, Ms. Russell is as likely to have lofty meetings with city officials as she is with public schools, where she is organizing a vegetable garden program for Fuori Expo 2015.

And she does it all in straight-leg trouser suits or form-fitting pencil skirts, with heels that never go over an 85-millimeter, or 3.3-inch, maximum.

“I’m probably more conservative than I have to be,” Ms. Russell says. “But certain things just don’t feel right in the office.” Tops on her no-no list are skirts above the knee, jeans, extremely high heels and anything sheer, which essentially obliterates 95 percent of what was on the spring runways.

And so, we head to Jil Sander, a brand known for its friendly dialogue with working women, and where Ms. Russell has recently bought a navy blue jersey pant suit.

At first glance, she dismisses the new collection’s hot pops of color, another big runway trend, as too bold, and the angular-cut suiting in double-faced cotton as potentially too stiff.

But once she tries on a pair of Sander’s tomato orange straight leg pants (€460, or $590) with a crisp, boxy, white short-sleeved shirt (€440), she warms up.

“I don’t have anything else like this in my closet — I’d wear this on a casual day,” she says, scooping up the pants but leaving the shirt behind. “The price doesn’t make sense. I really only buy a few important pieces per season, and the rest I’ll find on sale or at the cheaper brands.”

Also on her radar: a knit jersey navy blue dress (€700) with a form-fitting, but demure, cut to the knee and an open-flap neckline. “It even has a pocket!” she exclaims (a highly prized detail for any woman wielding pen and cellphone). She deems the dress the perfect workhorse and keeps it on her wish list for spring.

At Alexander McQueen, it is hard to see beyond the crystal-crusted black jackets or the satin jackets with elaborate painted details or the suits made from intricate black and gold beehive embroidery.

“It’s absolutely beautiful, but most of this feels like evening wear to me,” Ms. Russell remarks, sotto voce. She does, however, zero in on a snug, gold and black patterned knit dress (€945) that could make an appearance at work, thanks to its demure cap-sleeved top and knee length. “I’d wear a long black jacket with it to the office and then be ready for dinner out after work.” Dress, welcome to the corner office!

Article source: http://www.nytimes.com/2013/04/15/business/global/among-the-pink-organza-down-to-earth-basics-for-business.html?partner=rss&emc=rss

Fashioning Change: Finding a Coder When You Don’t Know How to Code

Fashioning Change

A social entrepreneur tries to change the way people shop.

When I first entered the start-up world, I found the landscape tricky to navigate  especially as a nontechnical founder of a technology company. How could the founder of a tech start-up not know anything more than HTML? How was I going to hire the right people with the right skills to build the lines of code I needed if I didn’t understand what I was looking for?

Hoping to gain a better understanding, I took a trip to Santa Monica and participated in a Startup Weekend. Over the course of the weekend, I spoke with more than 50 engineers, and I asked every one the same question: “If you were going to build Fashioning Change, how would you do it?” After the weekend was over, I analyzed the notes and compiled the similarities. With that, I was able to build an engineering job description and begin the search for a qualified person to join me in creating the Fashioning Change shopping platform (which I explained in a previous post).

But that still wasn’t enough  I can be a bit of a skeptic. When I am unsure of something, it’s not enough for me to take someone’s word. So while all of my friends were going out on Friday and Saturday nights, I began a new routine. Week after week, I would open a bottle of wine, buy WordPress templates, break them, and then put them back together (this was before Code Academy existed). I learned enough to build a browser add-on using a third-party API and an e-commerce site that aggregated popular green products. The site was “janky” and the browser add-on would flash green-living information at the wrong times, but I gained an understanding of the job description I had put together and built an early proof of concept for my start-up. Most important, learning to code made it easier for me to understand what I was looking for and to weed out résumés that were irrelevant.

It was while I was learning to hammer out a line of code that I met Kevin Ball, who had just moved to San Diego with his wife and had worked previously at Causes. We met in a co-working space when he noticed that I was stuck on a line of code and offered to help. He fixed instantly something I had been struggling with for hours. He had a great background that fit the description of what I was looking for, and he happened to be looking for his next thing. So together, we did a four-month trial project and built a green-living tip app. The project went well, and we decided to proceed with Fashioning Change.

These days, I frequently get asked how I recruited Kevin, who is known for being worth  five or six normal engineers. I think Kevin saw that rather than sitting around and waiting for an engineer to join me, I took initiative to get started. But when I tell people how I gave up my Friday and Saturday nights to learn to code, the response I often get is, “That’s too hard.” I tell people that if they think that learning to code is too hard, then they are never going to make it as an entrepreneur.

They usually don’t like my response, but I think it’s true. There is always going to be some hurdle that your start-up needs to get over and that you have never previously encountered. If you can’t get your hands dirty to figure out a solution, it’s not worth diving into the start-up world.

What do you think?

Adriana Herrera is chief executive of Fashioning Change. You can e-mail her at adrianah@fashioningchange.com, and you can follow her on Twitter at @Adriana_Herrera.

Article source: http://boss.blogs.nytimes.com/2013/04/02/finding-a-coder-when-you-dont-know-how-to-code/?partner=rss&emc=rss

You’re the Boss Blog: Finding a Coder When You Don’t Know How to Code

Fashioning Change

A social entrepreneur tries to change the way people shop.

When I first entered the start-up world, I found the landscape tricky to navigate  especially as a nontechnical founder of a technology company. How could the founder of a tech start-up not know anything more than HTML? How was I going to hire the right people with the right skills to build the lines of code I needed if I didn’t understand what I was looking for?

Hoping to gain a better understanding, I took a trip to Santa Monica and participated in a Startup Weekend. Over the course of the weekend, I spoke with more than 50 engineers, and I asked every one the same question: “If you were going to build Fashioning Change, how would you do it?” After the weekend was over, I analyzed the notes and compiled the similarities. With that, I was able to build an engineering job description and begin the search for a qualified person to join me in creating the Fashioning Change shopping platform (which I explained in a previous post).

But that still wasn’t enough  I can be a bit of a skeptic. When I am unsure of something, it’s not enough for me to take someone’s word. So while all of my friends were going out on Friday and Saturday nights, I began a new routine. Week after week, I would open a bottle of wine, buy WordPress templates, break them, and then put them back together (this was before Code Academy existed). I learned enough to build a browser add-on using a third-party API and an e-commerce site that aggregated popular green products. The site was “janky” and the browser add-on would flash green-living information at the wrong times, but I gained an understanding of the job description I had put together and built an early proof of concept for my start-up. Most important, learning to code made it easier for me to understand what I was looking for and to weed out résumés that were irrelevant.

It was while I was learning to hammer out a line of code that I met Kevin Ball, who had just moved to San Diego with his wife and had worked previously at Causes. We met in a co-working space when he noticed that I was stuck on a line of code and offered to help. He fixed instantly something I had been struggling with for hours. He had a great background that fit the description of what I was looking for, and he happened to be looking for his next thing. So together, we did a four-month trial project and built a green-living tip app. The project went well, and we decided to proceed with Fashioning Change.

These days, I frequently get asked how I recruited Kevin, who is known for being worth  five or six normal engineers. I think Kevin saw that rather than sitting around and waiting for an engineer to join me, I took initiative to get started. But when I tell people how I gave up my Friday and Saturday nights to learn to code, the response I often get is, “That’s too hard.” I tell people that if they think that learning to code is too hard, then they are never going to make it as an entrepreneur.

They usually don’t like my response, but I think it’s true. There is always going to be some hurdle that your start-up needs to get over and that you have never previously encountered. If you can’t get your hands dirty to figure out a solution, it’s not worth diving into the start-up world.

What do you think?

Adriana Herrera is chief executive of Fashioning Change. You can e-mail her at adrianah@fashioningchange.com, and you can follow her on Twitter at @Adriana_Herrera.

Article source: http://boss.blogs.nytimes.com/2013/04/02/finding-a-coder-when-you-dont-know-how-to-code/?partner=rss&emc=rss

France Rejects Plan to Block Online Ads

Fleur Pellerin, the minister for the digital economy, said she had persuaded the service provider, Free, to restore full access after meetings with French online publishing and advertising groups, which had complained about a loss of revenue.

Free had moved last week to block online ads for some of its users when it introduced a new version of its Internet access software. While some Internet users already use ad-blocking programs to rid their screens of annoying pop-ups and other online ads, the software upgrade from Free did this automatically.

“An Internet service provider cannot unilaterally implement such blocking,” Ms. Pellerin said at a news conference Monday. Advertising should not be treated differently from other kinds of Internet content, she said, adding: “This kind of blocking is inconsistent with a free and open Internet, to which I am very attached.”

While Ms. Pellerin said Free, which has 5.2 million broadband customers, had agreed to stop blocking ads by the end of the day, she said the company’s initiative had highlighted an important question: Who should pay for the infrastructure that telecommunications providers need to carry ever-growing volumes of Internet traffic?

Network operators like Free complain that much of the benefit of their investments has gone to Internet companies like Google, which generate billions of dollars worth of revenue from online advertising. The move by Free was widely seen here as a tactic to try to get Google to share some of its ad revenue with service providers.

Google was not represented at the meetings Monday with Ms. Pellerin. In an interesting twist, its case was effectively argued by other Web publishers, including French newspapers, even though these sites are separately seeking a revenue-sharing arrangement with Google, in a related dispute.

Free, which is controlled by a French technology entrepreneur, Xavier Niél, did not immediately respond to a request for comment.

Article source: http://www.nytimes.com/2013/01/08/technology/france-rejects-plan-to-block-online-ads.html?partner=rss&emc=rss

High & Low Finance: A Starting Point for Tax Reform: What Reagan Did

Tax Reform report of the Treasury Department to President Ronald Reagan, November 1984

As Washington grapples with the budget, it might be worth asking a simple question: What would Ronald Reagan do?

He was the last president to preside over a significant tax reform, one that did exactly what both candidates in this year’s presidential election said they want to do: lower tax rates and close loopholes.

And a critical part of that reform was to end the historical system of taxing capital gains at lower rates than ordinary income.

In the name of fairness, the Tax Reform Act of 1986 raised the maximum tax rate on long-term capital gains to 28 percent from 20 percent at the same time it reduced the maximum rate on ordinary income to 28 percent from 50 percent.

Doing that again in a tax reform act of 2013 would do more than raise revenue and increase fairness. It would bring an abrupt end to the “carried interest” tax dodge, in which managers in the private equity business are able to define their compensation as capital gains and thus pay far lower income tax rates than do ordinary people with far less income.

Ideally, there will be two tax reform efforts in the next 18 months.

The first, going on now, is a simple patch-up, aimed at dealing with the pending increases in taxes brought on largely by the expiration of the Bush “temporary” tax cuts. If the lame duck Congress and President Obama can avert disaster, raising some revenue while not devastating the economy, they will have succeeded.

But the next move should be aimed at comprehensive tax reform. The Obama administration should look to President Reagan’s second term for inspiration. The Reagan method included a comprehensive, well-thought-out proposal that dealt with the myriad details that can rise up to frustrate any efforts at change, put together painstakingly by the Treasury Department.

Then there was a bipartisan effort to get it through Congress, with inevitable compromises but with clear goals in mind.

The proper way to approach that proposal is to accept that the government needs to raise a certain amount of money. There can be differences over spending, obviously, but there should be consensus that whatever decisions are reached, the tax system adopted should be expected to finance those expenditures over an economic cycle, with deficits in difficult economic times and surpluses in good years.

With an agreement that taxes should raise a certain amount of revenue — presumably expressed as a percentage of G.D.P. — then the debate on actual tax policies can take place in an atmosphere very different from the ones we have had in the past. Every tax deduction and every tax exemption should be viewed not just as giving a break to whatever deserving group has hired a good lobbyist but as forcing the rest of us to pay more.

One way to do that would be to calculate a system, based on a simple progression of tax rates, without any deductions or exclusions, that would produce the needed revenue. Then the debate over each tax break would include a discussion of just how much the rates would have to rise if that break were granted for those who can take advantage of it.

Do you want to preserve the deduction for interest on home mortgages, in the name of encouraging homeownership? Fine. Just understand that it would raise the marginal tax rate for every one of us by a certain number of percentage points. The same goes for charitable deductions, or not taxing certain fringe benefits like the cost of health insurance premiums.

With that in mind, we come to the capital gains tax break. It is defended as critical to economic growth and prosperity, on the theory that without it money will not be invested. But the empirical data to back that up is lacking, to say the least. Over the last 30 years, the economy and the stock market has tended to do better when the capital gains rate was high.

That does not prove causation, of course. But if the data went the other way you can be sure supporters of low capital gains rates would be citing it.

It also needs to be understood that the current system ends up discriminating against many who own stocks and mutual funds and thus receive capital gains and dividends. If your investments are in retirement plans, like 401(k) accounts, the profits are not taxed until the money is taken out. And then the money is taxed at ordinary income tax rates, regardless of whether it originated as capital gains.

Article source: http://www.nytimes.com/2012/11/23/business/a-starting-point-for-tax-reform-what-reagan-did.html?partner=rss&emc=rss

You’re the Boss Blog: This Week in Small Business: Gangnam Style!

Dashboard

A weekly roundup of small-business developments.

What’s affecting me, my clients and other small-business owners this week.

The Economy: Big Bird Wants Out

Small-business confidence remains at recessionary levels. Wholesale sales and inventories (pdf) are soft. The International Monetary Fund lowers its global growth forecast. Both imports and exports were weak in August. However, machine-tool orders rebounded, and the Federal Reserve reports that the economy “expanded modestly” in September. A team of investment professionals believes that a fiscal cliff solution will be reached. David Rothkopf wonders if world leaders understand the third industrial revolution that’s taking place. Neil Irwin explains what’s really going on. Shale gas could lower manufacturing costs. Meanwhile, there was a vice-presidential debate, and Big Bird just wants out.

The Data: To Trust or Not?

For each job available, there are three and a half people looking for work, and Lance Roberts wonders if the unemployment rate is 7.8 percent or 22 percent. Bill McBride demystifies how the rate is computed: “Most of the decline in the overall participation rate has been due to changing demographics.” Mark Thoma believes we can trust the data. Meanwhile, no one knows why a single mysterious computer program that placed orders (and then subsequently canceled them) made up 4 percent of all stock market quote traffic last week.

Your People: Tracking Employee Hours?

Brad Farris answers the big question: what to pay employees. Here are five tips for paying part-timers. The Evil HR Lady explains why tracking employee hours is dumb. Kevin Kruse says the Taj Hotels have five ways to recognize employees. Here are a few ways to nurture creativity. Sajjad Masud believes there are five characteristics to look for when hiring talent. A study concludes that there is no evidence that increasing the employment of older people reduces job opportunities or wage rates for younger people. Are your unpaid interns suffering? Here are five things entrepreneurs can learn from art students. And wait, is this really a university for monsters?

Starting Up: The Making of K-Pop

A new platform provides tools for young people to set up a business. YouTube adds 50 new channels, including hip-hop choices from Russell Simmons and Jay-Z. John Seabrook looks at cultural technology and explains the making of K-Pop and the “Gangnam Style” craze. A start-up offers failed entrepreneurs a million-dollar signing bonus. Hermione Way wonders whether you can have a start-up and still be sexy. Stella Fayman explains why fake it until you become it should be every entrepreneur’s mantra. Here’s the secret to getting paid to do what you love. Rieva Lesonsky shares tips on starting a business without losing your shirt.

Marketing: It’s All About Image

These are six things your customers won’t tell you — unless you ask. Some franchises are incorporating the election into their marketing. Pamela Wilson explains the business of images. A new technology can recognize and grab information from products that appear in online images and video so they can be offered for sale. Stephanie Miles shares five ways small businesses can expand their e-mail marketing lists. Stephen Shoff says that a good e-mail marketing tool can make it easier to follow best practices. And Sonia Thomas shares her e-mail marketing tips. This infographic describes the needs of online shoppers. James Gardner takes a look at the conversion rates of eight small-business landing pages.

Social Media: Ask a Teenager

Online reputation management is important to non-Internet businesses, too. Here are four easy ways to monitor what’s being said about you online. Matt Owen gives tips for optimizing LinkedIn’s new company pages.  A team of search engine optimization consultants makes predictions for 2013. There are three types of social businesses. Terri Cettina explains how teenagers can help with social media marketing: “If you’re using social media for your business, you’ll look more knowledgeable if you know the latest abbreviations and language. Have a teenager point out important online phrases and conventions.” A social media expert says your business will suffer if you ignore the iPhone.

Management: The Scent of a Business

Lisa Evans says lavender is one of six scents that can transform your mood and productivity. Christopher Walken reads Honey Boo Boo. A life-changing experience led this chef to look for efficiencies. Jon Stow has a story on how not to run a business. A new season of Project Grow starts off with how to make a million this year. Gil Garcia shares his experiences at the Boulder Outdoor Survival School.

Around the Country: Gas Prices

Florida and California dominate the list of the 10 weakest markets. Brad Plumer explains why California’s gas prices are going haywire. Here’s how to prepare for Small Business Saturday. In Pennsylvania, the Internal Revenue Service and state troopers raid 197 video poker locations. The 2012 wife-carrying champion is announced. A new General Motors tech center in Michigan will employ 1,500. A restaurant group in Massachusetts says that a pending bill will put a chokehold on small businesses. EBay unveils same-day delivery. Here are 10 American industries with surprisingly poor prospects.

Around the World: The Price of Eggs in Mexico

A new report from the World Bank looks at whether entrepreneurship can be taught in poor countries. Valeria Maltoni says happiness is the world’s best brand. Mexicans are coping with egg shortages and price spikes. Growth in Britain is the fastest in five years but industrial output falls. Prank signs show up on London’s Underground. A group argues that Britons should work a four-day week: “We would all be happier and healthier if we spent more time outdoors, taking up ‘gardening leave.’” Iraq could become the world’s second biggest oil exporter. This is how a Chilean start-up initiative is changing Latin America. A Paris-based music streaming company raises $130 million.

Cash Flow: Is Google a Better Bank?

Google introduces a credit card for small businesses, and Martha White wonders if companies like Google and Wal-Mart can provide a better banking experience than actual banks. Most venture capital money flowed into the same funds last quarter. Kevin Kaiser offers some tips on managing your new office space. A woman gets a $15 quadrillion phone bill.

Red Tape: The Chaos of Online Sales Tax

Lou Carlozo explains what the end of tax-free online shopping would mean for small businesses. Jim Tierney says online sales taxes would create e-commerce chaos, but a business owner believes that they would restore competitive balance. Your tax filing extensions have run out! New York State has the worst tax climate (pdf) in the country. The Small Business Administration’s loan dollars in the 2012 fiscal year reached their second highest total ever. The Obama administration gives $20 million to 10 public-private partnerships to support American manufacturing and encourage investment. Olive Garden’s owner puts President Obama’s health care law to the test. A District of Columbia board approves forcing small businesses into its health exchange. NASA is gung-ho about small business. Al Gore cashes in on green tech.

Technology: The iPhone Is a Miracle

PC shipments are set to decline for the first time in 11 years, and one analyst thinks Hewlett-Packard’s stock is worth negative $2 a share. Groupon introduces a point of sale system for restaurants, and the retailer Urban Outfitters says it will never buy a cash register again. Apple, Facebook, Google, Microsoft and others join forces to start a new resource for Web standards. A new report finds that two-thirds of small-business mobile-device users believe their companies would lose competitive ground without them. Apple is expecting to ship 10 million iPad minis. Farhad Manjoo of Slate thinks the iPhone 5 “is a miracle.” Allen Gannett explains what big data can mean for small businesses. Verizon introduces a new tool to accelerate productivity for small and medium businesses. Microsoft will introduce Office 2013 for both iOS and Android. A cloud-based operating system is in the works. Natural gas trucks are gaining momentum. Here’s how to set up free text-message alerts when your Web site goes down. Polycom is trying to build a better conference call. Autos become the center of innovation. A life-altering way to make a grilled cheese sandwich is invented.

Tweets of The Week

‏@ConnectedStrat Busy people get things done. Busy people don’t use being busy as an excuse for delays, non-responses dropped balls.

@LeadToday
When you tell people it’s your way or the highway the highway starts looking pretty darn good.

@MeghanMBiro
Hire someone who understands what culture you’re trying to build

Bests of the Week

Eric Pangburn explains why you aren’t born great – and why that’s O.K. “When you understand that failure is your own fault, it’s easy to get depressed about it – but that’s not the real lesson here. … Rejection can be a great tool for self-improvement. Think of rejection as a form of free education. Whenever something you wrote gets rejected by a client or by a blog owner, ask why. Sometimes they’ll provide their reasons; sometimes you’ll be left to figure it out by yourself.”

Alice Walker says to go to the places that scare you. “If you want to have a life that is worth living, a life that expresses your deepest feelings and emotions, and cares and dreams, you have to fight for it. You have to go wherever you need to go, and you have to be wherever you need to be, and place yourself there against the forces that would distort you and destroy you.”

This Week’s Question: How would an online sales tax affect you?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

Article source: http://boss.blogs.nytimes.com/2012/10/15/this-week-in-small-business-gangnam-style/?partner=rss&emc=rss