Banking in an internet cafe

It’s a typical Saturday in Philadelphia and I once again find myself sitting in my local ING Direct Cafe (”the Cafe”), a retail bank masquerading as a coffee shop and internet cafe. The Cafe caters to the coworking generation with its shared office space, cafe culture, and double-agent barista-tellers offering sage savings advice with your purchase. The front of the Cafe is mixed with round tables and plush chairs, and is peppered with families, students, and professionals sipping the afternoon away people watching. I am at the four-person granite bar where the mood is like my corner pub, with NASCAR on the high definition television above me and a nervous home buyer named Sandy sitting next to me. Sandy is taking advantage of the free wifi to make the final decisions for her purchase, and isn’t shy to share her story with the non-threatening internet nerd sitting next to her. The other two seats are now empty, but serve as a revolving door for patient patrons waiting to take advantage of the Cafe’s eight internet terminals.

Per ING Direct’s website, their approach to banking is backed by ING, a Dutch-origin global financial institution that offers banking, insurance and asset management to sixty-million customers. The Cafe is an excellent complement to ING Direct’s no-frills retail model, passing the savings from a limited bricks and mortar presence onto its customers through higher-than-normal returns on their various demand and long-term savings products. Additionally, the Cafe offers added value to its customers by making the typically mundane experience of retail banking more enjoyable. But while I have been sitting here, I have noticed that customers typically come for the food, beverages, and internet, and shy away from talking about ING Direct’s financial services. There are several possible reasons for this including a hesitancy for potential customers to discuss their personal finances in public, current customers taking advantage of the ING Direct’s self-service nature and handling issues at home, or that customers simply want the Cafe’s ancillary services and aren’t interested in an online retail bank. In my humble opinion, the Cafe should offer a private room where the employees may discuss their products privately with potential customers.

Overall, the ING Direct Cafe is a unique alternative to the traditional retail banking model, and offers several needed services for the urban customers that they serve.

a (re)introduction

Are you thinking about purchasing your first investment property? Are you already an investor seeking to refinance your properties? Do you have a large-scale project in mind? Not sure where to start? I can point you in the right direction. Have no idea what LTV is? Go ahead and ask. I am here to help YOU. If you are looking for an independent analyst, you have come to the right place.
An Introduction

I started bootstrap | economist because I had a lot of ideas and I wanted to set them free on the web. I have been sharing parts of my life online for years, but this was my first time not hiding behind corporate firewalls and forum moderators. I had been keeping an offline journal for several months prior to starting bootstrap | economist, and realized that if I published my thoughts I would have an opportunity to help others and not just myself.

On the bus yesterday morning, I caught Michael Arrington’s notice that he was ranting on new media publishing politics.

And writing good content is only half the battle. You have to figure out the complex, dynamic web of politics between bloggers and mainstream media before you post to know where to get support. And you’ll need support in the form of links from other prominent bloggers. An early push can take a post and make it a headline on TechMeme, which leads to page views and notice by sponsors. But since blogging is almost by definition a conversation between bloggers, fights tend to break out over emotional issues. Cliques develop. Can you count on them to support you down the road?
- Michael Arrington, TechCrunch

I learned this lesson early on when Michael’s incredibly popular weblog, TechCrunch errantly credited me as the designer of FlashElementTD, an addictive web game I used to pass the slow days at work. When the story was published, I saw an immediate spike in traffic to my blog; which at the time was located at davidlitsky.com, and how quickly their posts were syndicated throughout the web. I subscribe to the Charles Foster Kane philosophy of “trying everything to see what works” and took an inch of a gesture and made myself an unwelcome guest by using their comment system as a soapbox for my perceived-to-be brash opinions. One of many mistakes that I chalk up to my entrepreneurial spirit.

But as I face new challenges in my career as a blogger with a full time job, I have recognized that I face different challenges than many of the other bloggers in this expansive social network. I am a financial risk manager for an east coast bank which provides me with an opportunity to meet numerous entrepreneurs across a wide range of industries, but because of regulation to protect our customers’ privacy, I choose not to speak about my experiences.

A few weeks ago, I re-read a May 2006 interview between then Risk Management Association (RMA) President and CEO Maury Hartigan, and RMA Board Member Bharat Masrani. At the time, Mr. Masrani was vice chair and chief risk officer of TD Bank Financial Group. In the interview, Mr. Masrani speaks about the risk of negative publicity which has the potential to cause a decline in the firm’s value, liquidity and customers. This risk; also known as reputational risk, is derived by all other risks that a firm identifies and manages including, but not limited to credit risk, market risk, operational risk, and regulatory & legal risk. When asked if there are any observable metrics or criteria in the area of reputational risk, Mr. Masrani responded:

My first answer is a simple one, and it’s a good test. Let’s say the bank undertakes a particular activity, in lending or management or in selling or manufacturing or trading a product. If that activity appeared on the front page of a business journal, would the bank be able to stand up and say, “You know what? I’m comfortable with that.” That’s what I would call the newspaper headline type of test. Am I going to be proud when this is announced? Am I going to be comfortable if this appears in print?

This particular quote reminded me of my eighteen (18) months as a risk manager for the Delta Rho chapter of the Alpha Epsilon Pi fraternity. A rewarding but thankless job, it was up to the risk management committee to identify and mitigate the high-risk behaviors of college-aged men that “just want to have a good time”. As an undergraduate student, most of us are self-absorbed and may not fully understand the consequences of our actions, and how they may negatively affect our organization.

But I digress. When I started blogging, I was appalled by what people were saying about members of their community. Although at the time it acceptable for me to use my words as inauspicious instruments, I chose to bite my tongue if I had nothing nice to say. This came off as creepy, weird, and fake to my friends that had brought me into the blogging community, but I felt that my reputation was more important to me than a few cheap links that would do very little to sustain the growth of my blog. I went against the grain, but as noted biographer and historian David McCullough says,

We need leaders, and not just political leaders. We need leaders in every field, in every institution, in all kinds of situations. We need to be educating our young people to be leaders. And unfortunately, that’s fallen out of fashion.

Talking about Others

I was shocked but pleasantly surprised when Jason Calacanis’ post, Note to self: stop promoting, start thinking again (or “Scoble’s Law”) came across my SMS feed.

It’s really hard when you’re excited about what you’re working on to not talk about it. Especially on your personal channels like your blog, Twitter account, and Facebook page. Over the past month I’ve tried to stop talking about my day job and latest project and focus 100% of my talking at conferences and most of the talk on my blog/Twitter account on general topics related to technology and business.

Robert Scoble, Jason Calacanis, Chris Pirillo, Dave Winer, and so many others have been my virtual guides through the blogosphere. While I have been involved with internet and web social networking since I purchased my first 2400 baud modem in elementary school, the blogosphere challenged me because I didn’t have virtual barriers protecting what I say from the Google search machine. Humbled by historic instances where I used my words as inauspicious instruments against my peers and competition, I viewed the blogosphere as a springboard to start over. Unfortunately, the behaviours that Jason is denouncing in his above post were prevalent, and my approach of only talking about others was misconstrued as being corporate and fake. But I continued on, blogging about the products I tried out and enjoyed.

Several video services are available on the web, but Viddler and Justin TV are two communities offering content produced by individuals. The former allows its community members to provide self-made content and tag it similar to a DVD. The community is also involved tagging video with subjects, comments, and video responses. Also, Viddler relies on its members to help remove copyrighted material, which mitigates the risk of a copyright lawsuit similar to what YouTube faces. The latter follows two people, Justin Kan and Justine Ezarik — also known as iJustine, who continuously broadcast video over the internet regardless of location. This service has a similar feel to The Truman Show and EDtv, offering a voyeuristic view into their lives.

The Future of Mobile Video and Television

When I started this blog, it was because I had a lot of ideas and I wanted to organize them. For a few months I had been keeping my thoughts offline in a journal and realized that if I published them, I would have an opportunity to help others and not just myself. The secondary benefits of this website have been to search engine optimize (SEO) myself as well as create a living, interactive resume. This is especially important to me because I was switching positions and have to ensure my online “brand” is professional. Appreciation goes out to Alex Hillman; a friend of mine from college, who helped me find hosting and setup my blog.

With the necessary infrastructure in place, it was time to fill the site with content. I chose to focus primarily on real estate because that is where my experience is concentrated. I started with basic ideas and have begun moving towards ideas that go into further depth. While updates have slowed slightly, it is due to a position change and updates will resume shortly. My new position will allow me to continue talking about real estate, and enhance my knowledge of commercial and industrial (C&I) lending.

Immediately I noticed the importance of Technorati and it’s tagging system, which is used to continuously index blogs. Within a days of posts, a search for my name in Google came up with this blog and my “about me” or resume page. I have also noticed that once my blog was filled with content, it was being accessed by a number of customers across the country. With my primary and secondary goals on track, I started to look into the numerous web applications available to help make my life more efficient.

Emurse is an online resume tool that allows you to create and store your resume online. A great feature of the site is that your resume is easily viewed with an option to download in a number of formats including rich text, pdf, and Microsoft Word format. Emurse also has a great profile section, which can be viewed from your resume page.

Twitter is a a mini blogging tool that asks one question: What are you doing? The service allows you to follow users or be followed. Posts are short; 140 characters to be exact, and can be sent or received through the web, standalone programs like Twitterific, text message, or the AIM instant messaging client. The service has been used in a number of manners including posting articles, documenting trips / events, and letting your friends in the area know where you are.

Netvibes was introduced to me this weekend by my friend Brad Levinson, and offers its users the ability to cater the web to their needs through RSS feeds. Content pages are organized by tabs and the pages are customizable from one to four columns.

Blogging and the Web: How it’s Helped Me and can Help You.

I came across trulia while completing market research for a potential customer. The site puts together a myriad of data in an easy to use format, that was previously difficult to find. Although the focus is for retail customers, there are a number of tools to aid your search of a potential investment property. My personal favorite is the “heat map” feature which compiles popularity trends on a state level to the neighborhood level for select cities. Data; whichincludes both actual prices and year-over-year percentage changes, can be sorted by average listing price, average sales price, median sales prince, price per square foot, and search popularity.

Buying a property? Need to do market research?

But I digress. Reflecting on Jason’s conversation, these are my four quick-hit tips on how I participate in conversations online and off.

Understand the concepts:

I have learned that details constantly change depending on the audience, and think of conversations as a pyramid. The top or “point” is a broad topic and the base expands exponentially with ideas, people, and continued conversation. This emphasizes a mindset that discards pre-conceived notions and focuses on progressive change.

Listen:

Listening is a simple form of feedback that provides an opportunity to learn from every conversation that you participate in. I listen by engaging my audience with consistent eye contact and ask questions about what they discuss. What I have found most difficult is reserving my personal opinion until I am asked, but find it refreshing to have productive conversations while saying as few words as possible.

Know your audience:

How you receive and provide feedback requires an understanding of the audience you are speaking with. Adaptability to a situation provides an open forum where both parties can build a continued two-way discussion of words and ideas. This open-mindedness allows for better management, products, and relationships between two parties; however, all feedback should be constructive.

Know where you add value:

Understanding your industry, art, product, and etc allows you to have the right conversations. Collaborate with those that have different strengths than you, ask the right questions, and the results will be positive. In addition, you create new contacts when questions arise in the future.

When utilized together, the preceding will help you participate and lead future conversations.

Technorati Tags: conversation, organic, coworking

Coworking: A Disruptive Innovation

During the tedious parts of my work day, I have been listening to the HBR IdeaCast Podcast. One of the recent topics was Disruptive Innovation, a discussion lead by Scott Anthony, who writes the Innovation Insights Blog at HarvardBusiness.org.

Disruptive innovation is using simplicity, convenience, and accessibility to transform existing markets and create new ones. Unlike sustaining innovation, which takes an existing idea or product and makes it better, disruptive innovation is achieved by thinking outside the box and changing the game. The everyday improvements to the web’s standards and technologies are a collective sustaining innovation of the internet, while the coworking movement and its embrace of technology to create a virtual office anywhere in the world, is a disruptive innovation to corporate america. The coworking movement has hit its stride due to a myriad of dedicated technology “geeks” that were tired of working thankless jobs in America’s corporations. Coworkers are a niche group of writers, developers, and other independent contractors that pool together their resources and share a common office space. These spaces are non-traditional work spaces offering a fun and creative culture for coworkers. According to the coworking wiki, there are locations throughout the United States and the world, including Europe, Asia, and Africa.

And to coworkers, with technology making communication easier and less reliant on distance, there is no better time then now to go out on your own. According to an industry report on Computer Systems Design and Related Services in the US; otherwise known as IT Consulting, 65% of revenues are derived from the business sector. This is further broken down to the banking, finance, and insurance industries comprising 40% of revenues. These traditional businesses are employing outside consultants to build software solutions to fill industry specific and cross industry needs. Fortunately for opportunistic entrepreneurs, IT Consulting has a low barrier to entry with approximately 84% of the companies operating as “micro entities”; or companies with fewer than 10 employees. These micro entities are the model that many coworking hot spots and their individual members utilize. This business model allows for an efficient company with low overhead, and infinite scalability for any project. What sets one company apart from another are three things; the ability to identify customers’ needs, pricing your services competitively, and quickly scaling your workforce to complete the project.

I have already encountered one company which uses a similar business model to fill a niche market in the banking industry. Beth Hamlin; one of the instructors from my credit training, is the Executive Vice President of Caliber Commercial Corporation, which provides credit analysis and training services to commercial lending institutions. This service fills a position banks need, while eliminating the expense of hiring and training internal personnel.

But it is important to caution all current and future entrepreneurs, to be wary of the micro entity model. Trying too hard to build a firm that is light weight and easily scalable, may possibly burden the firm with core and overhead costs that surpass the savings from being a scalable firm. The Undercover Economist Tim Harford passed along a coherent essay by economist Michael Munger on the theory of the firm.

Then one day, in one firm, one manager, perhaps on a whim, outsources the computer services or janitorial services or the legal advice. Not to India or Ireland but simply to another company across town or across country. The boss signs a contract, after taking bids from several companies that provide similar services. These companies are forced by the scolding winds of market competition to provide excellent service at low cost. By looking at the different prices in the bids offered in this competition, the boss learns something. He learns how much the service costs to provide. And he learns how much money he saves by laying off the employees who used to provide the service in-house.

It’s hard to fire employees, particularly since most employees are smart enough to work hard enough to get acceptable performance reviews. The boss also has a hard time motivating the in-house staff, because watching each employee is expensive and tiresome. But it’s easy to fire contracted employees, because you just sign a new contract with a competitor. Why not let the market system do your motivation work? Let’s suppose that our outsourcing boss sees the company’s profits rise dramatically, and the stock price goes up 18% in six months. Life is good, for the boss.

Hypothetically speaking, lets assume that Generic Firm; a mid-sized corporation, decides to redevelop their enterprise IT framework and outsources a portion of the web development needs to their local coworking office via a three month contract. It’s a beneficial deal for both parties because Generic Firm will save money on its head count (the number of people they employ) by outsourcing part of the project to a local company, and the coworking office receives a solid contract that can help keep the lights on for an additional three months. But the pressure now lies on the coworking office. Can they scale quick enough to accept the contract and cheap enough so the contract can earn a profit? The difficulty with a coworking workforce is that independent contractors are traditionally working on their own projects, and may not be available to work on Generic Firm’s larger project. Additionally, coworkers may expect a certain level of compensation which may not be in line with the monetary value of Generic Firm’s three month contract. If these difficulties are not addressed by the coworking office’s leadership, they may lose Generic Firm’s contract and future referrals from Generic Firm’s customers and vendors.

But I digress. Coworking takes advantage of an identified need for independent contractors to work with like-minded individuals. The business model has made office space simpler, cheaper, more affordable, and easier for independent contractors to access.

.info: economist