Personal Branding

In banking, it is often touted as part of the four (4) C’s of credit that repayment of our loans comes from the character of the individual(s) who operate the businesses that we lend to. This requires banks to perform their necessary due dilligence including but not limited to how the company has historically handled their accounts payable, handled their prior debt obligations, and how the principals have historically handled their personal expenses. These factors plus market trends in the industries that the business serves and the overall economy are combined to form a risk profile for our potential customer. This provides a snapshot for the Bank to weight two decisions, whether or not to lend to the potential customer and the appropriate fees and interest rate to charge the customer to compensate for the risk.

When I was using my credit cards to finance fancy dinners, flashy cars, and expensive gifts during college, I knowingly jeopardized my personal brand. Mesmerized by America’s buy now and pay later philosophy, my credit card companies considered me a high-risk customer as evidenced by late payments and interest rates that rivaled batting averages. Coupled with my lack of a savings account, my personal brand became a rubber stamp with the word “DECLINE” in bold block letters. Although my friends had the foresight to maintain their financial solvency in college, there were many of my colleagues that graduated with similar debt levels as myself. But the difference lies in how we handled the challenge. Unfortunately, success stories such as my own are often overshadowed by those who refuse to take responsibility for their spending habits. About a month ago, I ran into a former colleague of mine from college who discussed his personal situation with me. Hampered by high-balance credit cards and student loans from college with a humble annual salary, he decided to neglect the credit cards altogether and maintain his consumerist lifestyle. Having a blatent lack of ownership for wastrel spending will ultimately hurt his personal brand when it is time to purchase a house, apply for new credit, and find future employment.

But the beauty of America is that it favors those who work hard and I have a hard-earned opportunity to try again.

Mint Misses on Data Privacy Protection

My marketing and technology infrastructure advisor, Roman, recently sent me an e-mail inviting me to try Mint. For those who may be unfamiliar, Mint is a personal finance management application available free on the internet. Mint allows its customers to centralize their banking, savings, credit card, and brokerage accounts to get a snapshot of where and how they are spending their money. And one of Mint’s most discussed features is that the application will search those transactions, and provide its customers with opportunities to reduce credit card interest rates and improve savings account interest rates.

Uploaded with plasq’s Skitch!

Mint goes way beyond just reporting and budget tracking. Using a patent-pending search algorithm, Mint constantly searches through thousands of offers from hundreds of providers to find the best deals on everything from bank accounts to credit cards; cable, phone and Internet plans; and more. Mint’s suggestions are “unique to you” based on your individual spending patterns. For example, if you have $20,000 in a bank account that’s earning no interest, Mint might recommend a high interest rate savings account from ING or HSBC. Acting on that suggestion would give you an extra $900 in interest income over a year.
Mint.com - About Us

I originally tested Mint while it was in private beta, and while I liked its sleek interface, I was concerned about identity fraud risk from how it calculates opportunities to improve its customers’ interest rates. The application searches its customers’ financial transactions and uses that data to offer services from its partner organizations. To address these concerns, CEO Aaron Patzer states:

I’ll make a bold statement: You’re safer on Mint then with online banking. On Mint, you’re completely anonymous. We never ask for a name, address, or SSN - just an email. We know about your finances…but not about you. We’re also independently verified by Verisign, TrustE, and several outside agencies.
Aaron Patzer
Founder & CEO, Mint.com

What Patzer has not addressed is how a company operating for less than three years; Mint was founded in November 2005, can provide its customers with more security than long-standing financial institutions that have substantial risk management procedures in place. Personal financial data is extremely sensitive which is why financial institutions go to great lengths to keep it protected. Data security within a financial institution starts with website encryption, continues with intricate password management, and finishes with barring employees from accessing personal e-mail websites and social networking websites from behind the corporate firewall. This mitigates the risk that employees will inadvertantly disclose sensitive customer data. Additionally, financial institutions are regulated by a number of Federal and State regulatory agencies to ensure that they are maintaining sound data privacy procedures.

The U.S also has one of the most highly regulated banking environments in the world; however, many of the regulations are not safety and soundness related, but are instead focused on privacy, disclosure, fraud prevention, anti-money laundering, anti-terrorism, anti-usury lending, and promoting lending to lower-income segments. Even individual cities enact their own financial regulation laws (for example, for usury lending).
Wikipedia - Bank Regulation

In my humble opinion, it would be irresponsible to trust personal financial data to a company that does not follow the same data privacy precautions.

Successful Debt Reduction

This post serves as an update to Let My Loss be Your Gain, an article I wrote last year for Geezeo, a personal finance web community. When I graduated from college in June 2005, I had $13,645.24 in revolving credit card debt, no savings, and was making less than $40,000 per year.
————————
American Express - $3,565.22
Best Buy - $704.30
Circuit City - $2,010.99
Chase - $3,687.42
Target - $3,677.31
Total - $13,645.22
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As we approach June 2008, I have substantially reduced my debt by cutting back on my expenses, saving money, and working hard to increase my salary by over 50%. It is with proud-tears that I present a three-year update of my college credit card balances.
————————
American Express - $0
Best Buy - $0
Circuit City - $0
Chase - $0
Target - $1,198.87
Total - $1,198.87
————————
It has been a difficult task, but by June 2008 my collegiate debt will be completely repaid. An accomplishment I never imagined when I joined Money Management International three years ago. Needless to say, I am excited to put this debt behind me and move on as a fiscally responsible adult.

My bootstrap business experiment

One week ago I had lunch with my marketing and technology infrastructure advisor, and he asked me to describe the name “bootstrap | economist” in my own words. While in my mind I knew exactly why I chose the name bootstrap | economist, I found it challenging to accurately portray my thoughts in words and syllables. I rediscovered a post I made in March discussing my reasons for starting bootstrap | economist, but found that it lacked explanation of how I chose the name:

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.
a (re)introduction

I chose bootstrap for the philosophy utilized by many web technology startups, where aspiring chief executive officers rely on wit and intuition to build viable businesses instead of substantial investments by venture capitalists. This philosophy is particularly important to me because my wastrel spending in college has limited my access to credit. Without the safety of a credit card behind me to fund temporary shortfalls in my personal working capital, I have had to carefully juggle my cash to ensure that it lasts throughout each pay period. I chose economist; a term typically reserved for those who specialize in the science of economics, in memorandum of my grandfather. He himself was an economist, humbly serving the United States government in his earlier years, and sharing his knowledge to students in South Florida and Kingston, Jamaica until his unexpected death in December 2003.

When combined, bootstrap | economist is a business mentality challenging entrepreneurs to understand the internal and external drivers of their industry and develop fiscally responsible business processes. While reflecting on my earlier post, I neglected to mention that bootstrap | economist foregoes intensive audio and visual multimedia in favor of a low-bandwidth design. This provides my writers and I with a global printing press, easily accessed by developing internet communities who do not benefit from the high bandwidth internet services many of us take for granted. And at less than fifteen dollars per month to operate, modest advertising income of twenty dollars per month provides bootstrap | economist with an operating profit of 25%.

Privilege of Opportunity

Long gone are the glory days of American business when companies strove to groom stars from within. Strong training and mentoring programs that companies used to mold employees into confident extensions of their brand, have been replaced by bare bones frameworks of top-heavy management and unhappy supporting casts. Many of my colleagues in American business dangle one foot out the door, and carelessly disregard momentum within their company for a few dollars more every pay period. Their underlying reasons for departure are uninspiring managers, unrewarding workflow and unclear growth opportunities. But instead of lamenting over the injustices of American business, I seek out managers willing to teach me the formalities and informalities of my industry. Beginning with my first co-operative education experience at Wyeth Pharmaceuticals through my current position with Commerce Bank, these managers have provided me with the requisite confidence to succeed in American business. Throughout the years I have learned how to interact with internal and external customers, and build the products that they want to see.

My experience at Wyeth Pharmaceuticals stands out because I was only nineteen years old, and had an experience that I could only dream of when I was stocking shelves of appliances at Best Buy. The job was a management information systems support position within Wyeth Pharmaceuticals’ Logistics and Supply Chain department, and was passed along to me by my friend Jacquie who had accepted a second offer. My primary task was to support an external consultant who was building the framework of a data warehouse that would ultimately build efficiencies between Wyeth Pharmaceuticals’ refining, manufacturing, and distribution channels. The task was mostly data entry with a tinge of analytical work, but it opened up opportunities for side projects to enhance my hands on education.

On one particular day, my team leader invited me into his office to discuss my interest in creating a set of project management forms that would improve workflow within the Logistics and Supply Chain department. Difficulties arose between the several teams that comprised the Logistics and Supply Chain department, and how they were reporting workflow to the department’s manager. My task was to interview the department manager and the team leaders, and create a standard set of project management forms that would be used by the entire department.

I began the project by compiling a list of open-ended questions to gain clearer understanding of the department manager’s requirements for the project management forms. As he was the intended audience, it was important that I accurately capture the information that he wanted to see. I revised my questions to reflect the department manager’s requirements and began talking to the team leaders, seeking cues to design the project management forms for ease of use among their respective teams. But during my interviews I noticed apprehensiveness about the project from several team leaders, and was unsure with how to continue. I met with my team leader who explained that while I had accurately portrayed the concerns of the department manager, my revised questions failed to capture the concerns of the team leaders and their direct reports. He explained further that the success of this project lies in the hands of the direct reports who would be using the project management forms, and their adoption would be critical. Refocused on the users, I revised my questions and was able to receive constructive feedback from the team leaders. Through their commentary, I was able to create a draft of the project management forms. The project culminated with me presenting the project management forms to the department manager and team leaders in a board room setting, and answering any questions that they had.My co-operative education experience with Wyeth Pharmaceuticals ended shortly after my final draft had been implemented.

The confidence that my team leader placed on me to complete this project has stuck with me through two additional co-operative education experiences, a number of student leadership roles, and my post collegiate career.

Facebook denies Google access to its customers’ identities.

Article courtesy of my friend Michael Arrington, TechCrunch

More details on Facebook’s banning of Google Friend Connect from the Facebook API earlier today. I spoke with Facebook Chief Privacy Officer Chris Kelly and Google’s Director of Engineering David Glazer about the banning to get a fuller picture of the conflict.

Here’s an example of how Friend Connect (more details) works in practice. A third party site may want to add social elements to their service. They can integrate with Friend connect and allow users to sign in. Those users choose a social network where they keep their profile (Orkut, Hi5, GTalk and, until today, Facebook) and log in via the social network’s API. They then become “members” of the site, using Google’s terminology. If any of their friends from their social network also become members of that site, those friends are shown on the site and you can interact with them. To see it for yourself, click “log in” at the top of this sample site, IngridMichaelson.

Facebook has taken the proper stance to maintain its $15 billion valuation by limiting access to its customers’ identities on third-party websites. Facebook aspires to be the social network where customers can broadcast their true identity, and that requires a level of trust between Facebook and its customers. To gain this trust, Facebook allows its customers excellent control over which other users can view their Facebook profile, and how much of the Facebook profile is visible to those users. Facebook continues to earn the trust of its customers; evidenced by its heavy usage, and it would be irresponsible of the Company to allow third-party websites access to its customers’ identities.

Bankbook

Just more than one (1) year ago I joined Cambrian House, an idea-sharing web community based in Calgary Canada. Today I read on TechCrunch that Cambrian House has been purchased by established venture capital firm Spencer Trask, who will undoubtedly attempt to develop several of Cambrian Houses seven thousand (7,000) ideas. I only had the gall to post one (1) idea to the community, and want to share it with my readers prior to Spencer Trask dimming the lights at Cambrian House.

My idea is to come up with a marketplace where customers can submit their proposals, budget for the project, income statements / balance sheets, tax returns and personal financial statements of the borrower, and other pertinent information; then put the project out to bid. My thought is that a risk rating can be developed from this data.

The bidders on the projects can be individuals or financial institutions and would work similar to Prosper. Revenue can be generated by advertising as well as charging a fee to the financial institutions for using the service.

As always, comments are encouraged.

Facebook acquires debt financing.

Palo Alto (Calif.)-based Facebook has secured a $100 million dollar leasing facility to purchase additional servers for its rapidly growing web application. The Company has partnered with TriplePoint Capital, a Menlo Park (Calif.)-based company that specializes in providing debt financing to venture-backed companies. The TriplePoint Capital leasing facility will offer Facebook the flexibility to exchange and replace its equipment during the term of the lease.

Facebook’s need for new servers is two-fold; it will help the Company avoid service interruptions and provide headroom for technology startups that they acquire. It has been rumored that Facebook may target technology startup twitter, whose users have recently complained publicly about slowdowns and outages perpetrated by recent growth.

TriplePoint Capital was established in July, 2005 by James P. Labe, and has provided more than $500 million in debt financing to venture-backed companies, including Google’s YouTube and Slide.

The last thing the entrepreneur wants to do is see those precious equity dollars flowing into equipment purchases. It’s a very unproductive use of equity to plow it into fixed assets.
TriplePoint Capital’s Chief Executive Officer Jim Labe

Many of TriplePoint Capital’s customers have received equity financing from Kleiner Perkins Caufield & Byers, Mayfield Fund, and Sequoia Capital. By using debt financing, Facebook can reserve its $360 million in equity raised primarily through Microsoft Corporation ($240 million) and Hong Kong Billionaire Li Ka-shing ($60 million).

twitter + netvibes

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 such as 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 one 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.

And here are three (3) examples of how I use the two web applications together.

Customer Service in the Information Age

In his post, Why I say I’m a Blogger, Dave Winer follows up his Comcast diatribe from a few days earlier, with a subdued explanation of how he expects blogs to change how corporations interact with their customers. In the former post Winer states:

One of the reasons I believe in blogging is that it can reform business, giving power to the users, where we were powerless before. If I didn’t have a blog what could I have done to get Comcast to pay attention? Tell my friends and relatives? Sure, they know that isn’t very powerful. But when any customer could also be a publisher, well that does change things. This new power to publish can help us all get a better deal.

Most companies have left the sheltered view that business needs to be done on their terms, and will adapt certain policies and procedures to ease customers’ concerns. Companies whose framework depends on customer feedback to alter their future strategies will certainly take into account what is being discussed on the blogs, but they will also scour other online sources known for their customer feedback including but not limited to feedback forms at their official website, discussion threads within the webforum community, and product reviews at online retailing giant Amazon.com. Additionally, these companies will continue to take advantage of offline sources of feedback such as letters, phone calls, and faxes. Regardless of the medium that the feedback is generated, customers should understand that the process can be reversed when Companies feel that the limits of their product(s) and/or service(s) are intentionally being challenged.

When Winer’s original complaint about Comcast was circulating throughout twitter, I asked him if bandwidth could possibly be a scarce resource and his response alluded to him not necessarily knowing the answer. But Winer is not alone. Over the past six (6) months I have discussed the subject of bandwidth limitations with a number of my undergraduate colleagues from Drexel University, a Philadelphia University that favors science, technology, and innovation. My colleagues; whose concentrations varied from computer science to information systems, could explain in great detail the technicalities of how the internet works but were unable to provide me with a concrete answer on whether or not bandwidth is a scarce resource. According to Green Living Online’s article Greening the Internet, bandwidth is a scarce resource due to the sheer energy usage required to keep it running. The article states:

The Internet keeps us connected, helps us share information and reduces travel time. But it also has a big carbon footprint. It is estimated that globally it takes about 868 billion kWh of electricity per year to power. That’s a whopping 14 power plants worth of energy and about three percent of all the energy consumption in the USA, which adds up to a lot of energy and a lot of CO2 emissions.

Winer’s topic is just one conversation in this tangled web of how customers and companies are interacting with each other. On what feels to be a separate planet from the blogs and twitter, are the automotive webforums which is where I was introduced to the concept of blogging nearly ten (10) years ago. One of the hot topics from when I owned a car that is still discussed today, is automotive dealerships and insurance companies going to drag strips to catch pictures of their customers’ cars being used for non-street purposes. In a recent post at automotive webforum Myspecv.com, Moderator Kevin (RedDragonV09) puts out a WARNING To Warranty and Insurance Policy Holders Going to the Track!

A few weeks went by and my friend calls me all pissed off. He says to me, “Dude, you were right! The [CENSORED] dealership sent me a letter telling my that they are voiding my entire drivetrain’s [CENSORED] warranty! And they got [CENSORED] pictures too man! My car is going down the track in this one!” I know that this happens, but honestly I was surprised that it actually happened. I was kind of sickened to hear this news. But no where near as sickened as my friend was. He was so [CENSORED] furious.

And to think that was the end of it. 2 days later, he got another letter from his insurance company, which was Geico, the same insurance company I used back then. They canceled his policy. He had to go to another company and get another policy almost immediatly because the next day his bank that financed his car called him and said that they were notified that the car did not currently have insurance and that they needed him to insure it and to have a copy of the policy faxed to them as soon as its insured or they will repossess the car if he doesnt comply in 30 days.

So, as a warning to all of you that go to the drag strip. If you have a warranty and would like to keep it, or if you just have an insurance policy and dont want to be caught on the track, take the 5 minutes to remove them before you go down the track and the 5 minutes to put them back on. And cover your VIN while youre at it.

And just because youve been to the track many times and youve never gotten the letter, doesnt mean it cant happen to you. I found this out on a local Nissan forum in Washington where a guy had went to Pacific Raceways in his new 350Z and they voided his warranty this way. His insurance didnt get canceled, but he warranty was GONE!

Personally, I feel that drag strips provide a regulated environment for drivers to test their vehicles off of public roads, but understand that it is the right of the automotive dealerships to cancel warranty coverage on vehicles that have been used outside of the scope of normal use. Tying back to Dave Winer’s issue with Comcast, it can be debated that he was using Comcast outside of its intended use. As he states in this post, Winer uses more bandwidth than the average internet user:

I figured out why I use so much more bandwidth than the average Internet user. I have five computers, all Macs, all sucking down FlickrFan pictures once an hour. That adds up to quite a few gigs. It would be easy to cut back. Not sure I will though, cause I hate to be lectured and threatened by companies I pay $180 per month to.

which is further backed up by this photo:

In one corner, you have a customer knowingly using a great amount of bandwidth and in the other corner a company that is sensitive about how customers use its bandwidth due to the regulatory and environmental risks they face from such usage. I will digress the question of who is “right” in this case to the myriad of conversations floating around on twitter. But to those individuals that are looking for more open and honest communication with companies, caveat emptor.