Business lessons from Google

Former Googler Julie Chow, author of a new book, lists five lessons on how to do business like Google:

1. Launch and iterate. Even the smartest of the hyper-educated Google leaders cannot predict which products and features will attract a sizable user base. Instead, they urge teams to launch quickly and iterate based on what they learn from their users. Rather than spending time perfecting a product that might not work, get it out there, and let the feedback guide future development. ...

2. Fail fast. If you try a lot of stuff by launching early and iterating, you'll fail at most attempts. This is the secret to innovation. Failure is not a bad thing, but slow failure in the market is. Launch, iterate, and declare the failures as quickly as you can. Most importantly, learn from those failures to help guide future efforts.

3. Focus on the user. Your customers or users should be your singular focus, always. A question I ask incessantly to maintain this focus is: "What problem are we trying to solve for our customers?" Every product or service must be linked to a problem or challenge that will make their lives easier.

4. Ask forgiveness, not permission. This mantra was important to mobilize every Google employee in the company to do the things they felt were right without worrying about what approvals they needed to do it. The idea is to remove barriers and to empower employees to act quickly. Reward employees for taking initiative, and treat their missteps as any other failure — something to learn from, but not to dwell on.

5. If you see a void, fill it. This is my favorite lesson from Google. It gives explicit permission to employees and the expectation that, if something is broken, everyone is empowered and responsible to fix it. If there is a spill in the kitchen, clean it up. If the copy machine is broken, file a ticket. And if you see a void in the market for an application you believe users will love, then build it.

I think the last sentence of number five is the most important for aspiring entrepreneurs trying to figure out what kind of opportunity to pursue. Figure out what is missing or needs improvement, then make that the market for your business.

Housing recovery a long way off

In a CNBC editorial, Michael Yoshikami argues that a housing market recovery is still a long way away:

Housing starts were surprisingly strong this week, while there was improving sentiment from home builders. So should we start to breathe a sigh of relief that the housing market is returning to health? The short answer is no. The headlines say that housing is stabilizing and there are signs of life in the real estate sector. This is true but is only part of the story. Signs of life is far different than a return to healthier times.

While KB Homes and Toll Brothers are reporting sales increases, this does not erase the fundamental problem with the real estate market today; there are too many people wanting to sell and not enough buyers. In some neighborhoods in the United States, every other house is for sale and sitting stagnant with no takers. But this is the obvious sign that the real estate market is troubled; there are deeper problems below the surface.

What is more troubling is in every block in neighborhoods across the United States, there are huge numbers of potential sellers that would sell their house if they could get the price they believe their house is worth. This huge reserve of sellers creates a supply waiting to flood the market when any sign of recovery in real estate capital values returns.

Additionally, banks continue to hold huge inventories of foreclosed properties waiting for a rebound in the market before placing these properties into the real estate market. ...

In addition to supply issues, the U.S. economy is far from healthy. While we are in the midst of an uneven recovery, unemployment remains stubbornly high and the prospects of a more normalized employment rate are far off in the distance.

Why did America's housing bubble decline more than those elsewhere?

Much of the developed world (especially America and Europe) had a housing bubble. The Economist asks why America's fell so much faster than the bubbles in Europe:

Perhaps the difference is institutional. American banks had poorer lending standards and have been quicker to foreclose on properties; borrowers have been readier to walk away from their homes. In European countries, owners have been able to sit tight in the hope that prices will recover. European markets are certainly a lot less liquid. Irish transaction volumes dropped by 83% from their peak and Spanish ones by 64%, but American deals fell by just 46%. Europe is going in the same direction as America. It is just getting there more slowly.

Updated housing graphs

I have updated my national housing bubble graphs to reflect the latest data available. It covers home prices from 1970-2011. It looks like U.S. home prices are fairly valued, although it varies by metro area. As I said in the past, I don't expect any significant overshooting nationally. I stick by that prediction.

Here, the red line represents inflation-adjusted housing prices, and the blue line reflects nominal housing prices:

The graph below compares the change in home prices to the change in owner-equivalent rents over time. Without any bubbles, they should increase at roughly the same rate over time:

TurboTax Online is a ripoff!

After years of buying the software version of TurboTax Deluxe—originally on CD but last year as an Amazon.com download—this year I made the mistake of using TurboTax Online. I'll never make that mistake again.

TurboTax Online sucks you in with the promise of a Free Edition. Of course, if you have any investments, you will eventually be told that you cannot complete your taxes using the Free Edition. You are then given the option of buying the Deluxe Edition or the Premier Edition, both for a much higher price than you can buy the same editions from Amazon.com.

It gets worse. After you have spent several hours doing your taxes, and are almost done, you are told that you must pay an extra $40 to complete your state tax forms. By contrast, if you buy from Amazon.com, state taxes are included with TurboTax.

Here's the cost comparison:

TurboTax Deluxe Online + State: $90
TurboTax Deluxe download from Amazon + State: $30

TurboTax Premier Online + State: $90
TurboTax Premier download from Amazon + State: $40

TurboTax Premier Online is more than DOUBLE the cost of the same software from Amazon.com. TurboTax Deluxe Online is TRIPLE the cost of the same software from Amazon!

The lesson: Never, ever use TurboTax Online!

SOPA is back!

Apparently, the Obama administration still advocates censorship of the internet:

After the largest online protest in history, the Obama administration is still voicing support for SOPA. ...

Just the other day, the administration sent a letter to Congress to demonstrate their support for new internet censorship legislation. Victoria Espinel, Obama's so-called "copyright czar" just said: "We still need legislation for blocking foreign websites." You can read the full statement here.

Likely address for Lodsys CEO Mark Small

Apparently there's a patent troll company called Lodsys that is going around suing small software companies. Lodsys is headquartered in Marshall, Texas. The name of its CEO is Mark Small. According to the FOSS Patents blog, Lodsys claims that Mark Small lives in Oconomowoc, Wisconsin. Several online sources, such as 411.info, manta.com, and ypstate.com associate the name Mark Small in Oconomowoc, WI to the address 4886 Hewitts Point Rd, Oconomowoc, WI 53066 and the phone number 262-569-1128. His email address is apparently mark.small@lodsys.com. So, if you're being sued by Lodsys and want to counter-sue its CEO in his correct home jurisdiction, that might be a good place to look. Just don't make the rookie mistake of not verifying this information beforehand.

Peter Beinart argues for a two state solution for Israel

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I largely agree with him. My only disagreement is that I don't believe countries should be based on religion. I dislike the idea of a Jewish state as much as I dislike the idea of an Islamic state or a Christian state.

The world's poor are becoming richer

In the past few years, global poverty has been declining throughout the world—especially China:

The best estimates for global poverty come from the World Bank’s Development Research Group, which has just updated from 2005 its figures for those living in absolute poverty (not be confused with the relative measure commonly used in rich countries). The new estimates show that in 2008, the first year of the finance-and-food crisis, both the number and share of the population living on less than $1.25 a day (at 2005 prices, the most commonly accepted poverty line) was falling in every part of the world. This was the first instance of declines across the board since the bank started collecting the figures in 1981.

The estimates for 2010 are partial but, says the bank, they show global poverty that year was half its 1990 level. The world reached the UN’s “millennium development goal” of halving world poverty between 1990 and 2015 five years early. This implies that the long-term rate of poverty reduction—slightly over one percentage point a year—continued unabated in 2008-10...

Virginia residents: Vote against Mitt Romney tomorrow!

Residents of Virginia, please go out and vote for Ron Paul (and against Mitt Romney) tomorrow!

It's a two man race in this state (Santorum and Gingrich aren't on the ballot) and Virginia has open primaries. That means even if you're a loyal Democrat or independent, you can cast a ballot against Mitt Romney in the Republican primary tomorrow.