Freedom means a free press that you pay for

Have a look around the world at the less democratic countries, and there you will see a neutered or government-controlled press.

I was in a South-East Asian country last year on assignment, and the ruling government managed to put one of the main independent newspapers out of business declaring it had not paid its correct amount of tax. Within days, the owners had either fled the country or were in police hands. The paper was duly shut down. All staff were out of work. Within a few more weeks, the same government ruled the opposition party was illegal, and it was duly shut down. There are elections this year, it’s a slam dunk for the ruling party. It’s a sham for democracy and the people.

Having worked at a media company, I know what it is like to be inside a news operation, striving every day to ensure the correct facts are published. Readers have a right to know what is going on, which is why they are drawn to news media. Often the ‘truth’ is ambiguous, out of reach, fuzzy. It takes hard work and time to uncover it, especially when some people would prefer it left uncovered.

Opinion is cheap. Truth is expensive.

News media, run well, will hold the government and powerful of the day to account, lest they run amok. Politicians may not like the freedoms and protections of the press, the intrusions into their lives this entails, but they understand in their hearts that this is important in a democracy.

Great travesties of justice have been exposed by a free press, be it the Vietnam War (so beautifully portrayed in ‘The Post’ movie), or Catholic abuses of children (2015’s ‘Spotlight’ movie), or Watergate (‘All the Presidents’ Men’). In fact, it is interesting that these David and Goliath investigatory battles all make for dramatic movies.

In many ways, the press has it hard. Not only can information be blurry, but with the leach of classified ad income to the internet, the newspaper industry has also lost its ‘rivers of gold’ revenue. Faced with declining income, they have been forced to cut back on editorial staff, the very life blood of any upstanding news organisation. The rush to ‘click bait’ and hits has seen a rush to the bottom, allied to the polarisation of media such that viewers only switch on to – or read stuff – that affirms their preconceived ideas. The ‘truth’ is now not so important. Readership, and holding on to your readers come what may, is all that matters.

Thomas Jefferson once famously said:  “Were it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate a moment to prefer the latter.

Or, as the supreme court famously ruled on the Pentagon Papers case, “The press is to serve the governed, not the governors.”

No wonder dictactors and coup leaders take over the TV and news organisations first. Putin has Russia Today, and Trump has Fox News. Anything else, is fake news.

With a weakened press (around the world), the splintering of media and consumers just seeking what they want to hear, media is in about as weak position as it as ever been.

In order to grab attention, media organisations scream sensationalist headlines in order to cut through the noise. The rush to publish, by less trained and lower paid  juniors, means the ‘lie is half way around the world before the truth has got its pants on‘ (as Winston Churchill once opined).

As one Congressman said a few years ago, “You are welcome to your own opinion, but you are not welcome to your own facts.

Facts are facts. Proven. Scientific. Sourced. Part of history. Full stop.

People are switching off ‘The News’ as it’s always about bombs and deaths and disasters (fear). Fear sells. But it also puts the audience off, who want to be informed without being alarmed all the time.

In many ways, our world is safer than ever. There are less wars, less deaths, less die from disease and hunger, yet you would not know this from the TV news.

Something has to be done to save media (real media, one that seeks truth and holds truth to power) before it goes down the gurgler forever. For that’s where it’s heading. Slowly, but surely, the news industry is dying. Journalist jobs are disappearing, and once gone, are not coming back. It’s a race to extinction in ever decreasing circles.

One ray of hope is in the recent example the New York Times. Harangued by the US President (as the ‘failing NY Times’), the paper has actually put on an extra million paying subscribers over the past year. They now have more than 3.5M, that’s double the number of just 2 years ago. Thank goodness too, as their print ad revenue continues to decline.

What’s happened here is interesting, for the more the President rails against the ‘fake news’ media organisations it does not like, the more people flock to them and support and pay for the very same mastheads. The more the President is seen to be telling untruths (over 2000 in this first year alone, reportedly), the more people want to know the truth from a reputable source.

Asking people to PAY for news is incredibly brave, as there are thousands of web sites out there that give away news for free. So to see the NY Times do so spectacularly well behind a paywall is encouraging not only for their future, but also for the future of the medium overall.

I worked for a news organisation that made the bold step to put up a paywall way back in 2002, and erect an even stricter one in 2013. The result? Traffic to the site ROSE five-fold over the past 4 years and subscription income became the largest single revenue source (larger than advertising or events). So it can be done.

I would therefore argue that a free press is essential in a democracy (the so-called ‘Fourth Estate’), and that the only way to ensure its survival is to create content that readers value and pay for. In this way democracy flourishes. For without an informed public, how are we going to know who to elect? The US are discovering this the hard way right now it would seem…

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Take it from Eddie Izzard – Quality is more important than Speed

Over the break I read Eddie Izzard’s excellent ‘Believe Me, a memoir of love, death and jazz chickens‘. Bill Gates, of all people, had recommended it as a top read, and I thought ‘now why would a serious bloke like Mr Gates be into the autobiography of an English cross-dressing comedian?’

Then I reached page 306, which I quote from heavily below.

Eddie Izzard was born a year before me, and was packed off to an English  private boarding school aged 6 after his mother died suddenly of cancer. He grew up with the same TV shows and music as I remember from the early 70s, and went to uni around the same time (although he dropped out to pursue his dream of performing).

As a teenager, while still at school, he decided one day to take a bus and a pay a visit – uninvited – to Pinewood Studios, just west of London (where they made James Bond movies and the like) walking right through the side door and exploring around all day pretending to be busy and part of things.

During his ‘lost decade’ of the 1980s he took various failed shows up to Edinburgh Fringe, then spent a few years as a street performer before finally getting into stand up. He explored and created, and slowly honed his craft. He put on shows himself, producing them from scratch and co-writing inventive nonsense with friends. Most of it simply did not work, but slowly he found his own voice and style and confidence and audience.

From the 1990s his stand up act took off and then he made it into films and TV. Now, in his mid 50s, looking back, his advice for creating new business is crystal clear …

“When I was 25, the direction of my career suddenly became shaped by my ‘Field of Dreams’ rule – if you build it, they will come. ‘It’ being quality and imaginative shows.

“Previously, this had not been my thinking. Quality was not high on my list. Speed was. But who the hell cares if you get somewhere fast? The only person who cares is you. 

“If you could get somewhere faster, then you’d just have a lot of money, a big house, a fast car and a big cat. The individual is the one who wants to get somewhere quickly. It’s what you want when you’re young. At nineteen I thought I would begin to cut through within a few years, but this was not the case. At 25 I was racing to get somewhere fast but getting nowhere.

“So I turned the plan upside down: don’t get somewhere as fast as possible. Get somewhere as good as possible.

“No one ever says, ‘This piece of creative work is crap, but it was made in a couple of weeks, so let’s go check it out.’ Contrariwise, no one ever says, ‘Now, this piece of creative work took 10 years to make and a lot of care and attention – so I must check it out because it took so long to make.’

“There is something fun about a fast trajectory, someone’s career taking off quickly. It’s all about the wind in their sails. But in the end, you want your work to last. And to do that, your work must be good…

“(My career) took 12 years to appear, and to me it felt like a bloody eternity… there was something I had to learn. It was stamina. And it was also the idea of quality over speed.

There is an eternal truth in this passage.

Do your best work, not your quickest work. It might take time. In fact, if you’re doing something new, wacky and disruptive, it will definitely take time. More time than you’d like. But in the end, only the best work wins. Keep plugging away, find your audience, keep innovating.

This experience and advice has obvious crossover to business and particularly startups. I think I can see why Bill Gates admires Mr Izzard.

While at the buffet table

On holiday we gorge ourselves at the hotel buffet breakfast, something we do not partake of in our normal daily routine back home.

You can learn a lot about human nature, other people and perhaps yourself at the buffet table. Or rather tables, because arranged across 3 rooms are tables of food of all types and shapes and tastes. It is interesting to watch people’s behaviour when they are presented with an unlimited amount of food. More food than they can hope to consume. Food that would not other otherwise come within miles of one’s normal breakfast table. I rationalize this feast by arguing that this will last us til dinner. And often this is the case. After breakfast, we might strike out on a tour and eat nothing again til evening time. Yet, even with this defense, my 3 course breakkie is greed to the extreme. Someone cooking omelettes to my instruction? Great. Fruit juice, coffee, toast, cheese, salad, bacon, roast potatoes (for breakfast?), noodles and yoghurt. Wow, I’m stuffed.

Before all this though is the “wait to be seated” instruction. This is plainly written at the entrance, but in an otherwise open plan dining area, this is problematical as holiday weary families emerge from all parts and miss the sign. Although this morning you could not miss the meaning as there was a distinct queue, and I was in it. Despite this, a burly Russian waddled up with his family in tow and plonked his plastic credit card room “key” down in a table that just 30 seconds earlier had been allocated to another family, who were now at the juice counter. The Asian staff quietly informed him that the table was someone else’s and pointed him to our queue. He stalked off muttering something in a surly fashion. Later I saw him walking around looking for something. Rather than ask a kindly waitress, he took a marmalade pot from an empty table as his. He showed no compunction at this, it was the done thing. The same way he ignored the queue and tried to abscond a table for himself earlier. I do not blame the Russian necessarily, but one thing I have noticed on this island is the amount of Russian and Chinese tourists, something that simply had not existed last time I visited in the mid 1990s. Signs and menus in local restaurants and bars are all in English, Russian and Chinese (and nothing else – not even in Thai.) The opening of their countries and increasing wealth to a privileged emerging middle class has allowed more of them to become tourists. Every second family in our hotel is Russian it would appear. Nothing wrong with that, it’s just an observation. It might show changing times and increasing influence of these countries. I think I’ve heard but one American accent. The culture shock for them might be quite strong. The etiquette of queuing is not ingrained. Yet.

Back at the buffet table, I notice someone recognizable next to me. He’s taller than I imagined, looks fit and ripped, but the face is a give away. It’s Mason Crane, the newly tested English leggie who delivered the worst bowling analysis of any debutant in history just last week in Sydney. Despite this, analysts think he has something. Didn’t Warnie go for 1 fer loads in his first test?

So what do you do when a world class sportsman is standing next to you? Well, if you’re English like me, you smile and say nothing. After all, he’s on holiday poor lad, he’s only 20, has his girlfriend and parents and a mate with him. So I move on down the buffet and take my seat. Proof, should you need it dear reader, is in the photo (as taken by my dear wife) …

The buffet breakfast is convenient for the weary traveller, who can stoke up before a hard day battling the crowds at local tourist spots or around the pool. It’s also economic for the hotel, who don’t need to wait on tables besides ensuring the trays of food are replenished and helping people with some replacement cutlery or marmalade pot. Or, in one case, vegemite for a middle aged Aussie.

In this way, the holiday buffet contract is complete, and we can waddle off self satisfied to whatever the day has in store for us. Perhaps a game of squash can assuage the guilt of the 3-course breakkie? Maybe, just maybe.

Make Maths and Science compulsory!

Dear reader, before we forge headlong into another new year with all its promises and possibilities, let us extend the space and perspective gifted to us this time of year to ponder an unpleasant fact.

Your typical Year 11 and 12 in WA may not take a Maths or a Science subject.

Not only that, the trend is going in the wrong direction. But before I get to this, I need to take you back in time, and give you some international perspective…

The UK, Singapore and Australia

It is well proven that economic growth derives from investments in education, science and technology.

For 13 straight years, I taught Economics, Maths and Business subjects to IGCSE and A-Level (in the UK), then the International Baccalaureate (in an international school in Singapore) and finally Economics and Management (at TEE level, the forerunner of ATAR) in an independent boys’ PSA school in Western Australia.

I am now a parent of two secondary school age children.

This perhaps affords me a unique international and personal perspective on the importance of STEM (Science, Technology, Engineering and Maths) subjects to Year 11 and 12.

As for the IB Diploma, a full ATAR course requires 6 subjects, but does not stipulate any required subjects, beyond taking English. The best 4 results are then used for uni entrance, which means you can bomb out (or even drop altogether) 1 or 2 of your 6 subjects and it does not affect your ATAR score (which is a ranking of all the Year 12 results in WA in order – the top student(s) will score 99.95. In 2017, 16 students managed this).

Under the IB Diploma though you cannot drop any subjects and still graduate with a diploma. In the UK, you can’t drop an A-Level and still expect to go to a university.

Everything matters. An important lesson one might think.

IB’s all-round strength

Comparing the three systems I have taught in, I can state categorically that the IB diploma provides a far superior all-round education (as compared to someone doing 3 A Level subjects or ATAR). I am not alone in that view.

IB students have to choose a Language & Literature subject, a Maths, a Science, a Humanity, a second language and an Art subject… choosing 3 at a Higher Level, and 3 as Subsidiary for the full diploma. You might do 5 hours of study in a Higher subject a week, and 3 in a subsidiary, plus home work of course.

IB diploma students also take ‘Theory of Knowledge’, a fantastic grounding course in culture, psychology, ethics & law… how we know things to be true, or not. Plus, students write an extended essay (a research thesis) in one of the main higher subjects, and have to do a certain amount of recorded ‘Community, Action and Service’ activities – such as sport, travel and community work.

The end product is a highly well educated, holistic graduate, ready for what the world or university has to offer.

The school I taught at in Singapore produced some of the highest IB results in the world. Half the world’s IB diploma students that graduate with a perfect score (45/45) are from Singapore. The pass rate in Singapore is 98% (globally it’s 80%).

Coming from this to teaching TEE in WA, I felt the educational standards were lower than in Singapore, even though I was teaching at one of the top boys’ private schools in Perth, 80% of whom go on to study BComm at UWA.

STEM Decline

Wind on a few years, and I was shocked to discover that recent trends show a declining number of Maths and Science being studied in WA, with a significant proportion of students studying neither subject area. This something I’ve blogged about before.

To recap: the average number of science subjects taken by Year 12 WA students declined from 1.41 to 0.66 between 1986 and 2012. (Report: Optimising STEM Education in WA Schools, TEAC/ECU, 2013). That’s halved!

The average number of maths subjects taken declined from 0.92 to 0.69 between 1992 and 2012. That’s 50% down.

The reports also note that there is also a lack of STEM qualified teachers (too often teachers are teaching out of their training area just to get someone in front of a class), and we don’t even have a database of what qualifications STEM teachers currently have. If you don’t measure the problem, you can’t manage it.

Just think about this. The average year 12 student does not even take one maths or one science subject. If you randomly chose 3 students, perhaps you’d see 2 Maths and 2 Science subjects between them.

In other countries, such as one of our closest neighbours Singapore, students record among the best results in maths and science globally. There is serious investment in education and a drive (by students and parents) to get the best results. It’s embedded in the culture, and in many ways Singapore, with few natural resources (land, minerals, food, water…) to speak of, has had to invest in its people to survive, and thrive. Despite this disadvantage, Singapore’s GDP per capita is above Australia’s. In 1980, Australia’s GDP per capita was twice that of Singapore.

It’s a global marketplace… even in Perth

Our current and future year 12 graduates are moving into a globally connected, super competitive world of work. They will not only have to compete with each other, and unseen millions in other countries, but also with technology such as AI, that may be able to do their jobs quicker, cheaper and faster.

Of course, there will be well paid jobs in the future in our State, but these will go to the most-rounded, grounded, bright young things who can show that they can work in teams, show initiative on their own, handle complexity, communicate well and design and solve problems. From wherever they come from.

To think that many WA school graduates will not have a grounding in Maths or Science is worrying. STEM pervades everything, (or STEAM or ESTEAM or whatever you want to call it). It will be the building block. It will be necessary, but not sufficient.

Stop the Chicken!

As I have learnt in life, you get what you reward, so be careful what you reward.

If uni entrance is determined by the best 4 of pretty much any 6 ATAR subjects you can muster together, then you can bet parents and their children will pick whatever seems easiest to game the system. And they do.

We have to stop this short term ‘chickening out’ to less academic ATAR subjects at Years 11 and 12 to merely boost the ATAR score and ‘play the uni entrance game’. Everyone who goes through the last 2 years of schooling should spend at least 1/6th of their time on Maths, and 1/6th on at least one Science subject. That’s not a lot to ask is it?

I am amazed I even need to argue this. Other countries make it so, the IB makes it so. We will be left behind in the global marketplace, and we will not be doing the right thing for our children and our state either if we look the other way on this one.

Another disturbing factor is that those in lower socio-economic areas are even less likely to follow maths or science through to school end. We are developing a divide in society where the better off students will have access to more STEM subjects, will do better at them, all because of the postcode they were born and grew up in. This has to be wrong.

ONE Recommendation

Therefore, I make one simple proposal – make Maths and Science compulsory through Year 11 and 12. Parents, I am talking to you!

This is above politics. I am not criticising or proposing changes to government policy. Yes, some people will ignore my call. People don’t like change, especially if their little cherubs are involved. But sometimes, with right on your side, you can make the argument.

~~

Some Resources:

Answer to question posted above:

9   –   3  /   1/3  +   1

The division (BODMAS*) is done first, so 3 divided by 1/3 = 9

= 9   –  [ 3 /  1/3]   +   1

= 9 – 9 + 1

= 1

* brackets, operations, division, multiplication, addition, then finally subtraction

And the Cup? well, you got that right? I love Maths forever (as the square root of 16 is 4).

Giving

“We make a living by what we get. We make a life by what we give.” ~ Winston Churchill

I trust your Christmas was fine and dandy, spent relaxing and  re-energising, in the company of good friends and family.

When you get to a certain age, Christmas is less exciting than when you were a child. Yet it’s a wonderful time nonetheless: the time to rest after a long year, time when you can de-stress, sit back and put your feet up, read a book, down a nice bottle of wine in good company, crank up the barbie, get some odd jobs done, go places you’ve put off going to for months, walk the dog a few more times, go to an outdoor cinema, catch up with friends, watch some Big Bash, dip in the pool and laze at the beach. It’s pretty idyllic this time of year in Perth. I ain’t going anywhere.

To spend Christmas with children provides a glimpse back to your own childhood, as they get as excited as ever, counting down the days til the 25th and not being able to sleep the night before.

On the day itself, I am happy to receive a few gadgets (oww, I do love me gadgets me) and a couple of books to read. My favourite bit is to watch my family open each other’s presents . We don’t go at it hammer and tongs, we try to space it out in the two hours or so between waking up and starting the preparation of the traditional roast turkey lunch.

What was different this year was that my eldest (now 16) has her own money, and organised some gifts for her brother, parents and a few friends. It was fascinating to see the joy that giving gave her. She was genuinely delighted in seeing us love what she’d bought us. She put a lot of thought into what she’d get everyone. The fact that she’d planned it all out, used her own money, wrapped and delivered it meant something to her.

Anyone can receive, but to give is far more meaningful. As children grow up into young adults and branch out into the world, they will realise that to serve others – whether it’s friends, colleagues, bosses, clients or shareholders – requires a little giving up of self and thinking about the other person. The best team mates will be selfless, as will the best leaders.

It’s a life lesson. Perhaps one of the most important to learn.

 

 

 

The Bursting of the Bitcoin Bubble

Chart showing the price of one bitcoin since its creation in January 2009

Nearly every topic of conversation this holiday time is veering towards bitcoin, and its amazing run up in value this year.

What is the bitcoin? How do you make money on it? Should I invest in it? Do you have some? How do you get some? It’s amazing right?

OK, hold on. We’ve seen this movie before, and it always ends in tears.

At the beginning of 2017, the price of the cryptocurreny (or digital currency) bitcoin was around US$1000. Today, it stands at 18 times that. How many things do you know rise in price by 18 times in a year and hold their value? Remember, in bitcoin’s case, there is no central bank, or government or gold providing security and ensuring there is some value there. It’s all based on trust.

Over the latter part of 2013, during a two month period, the price of bitcoin rose from about US$150 to over a US$1050. A 7-fold increase. People were calling that a speculative bubble, and they were right. From its peak, the price collapsed in a few days and stayed around $250-$500 for the next few years.

By January 2017 the price had crawled back steadily to $1000, and made its first attempted break out in April reaching $1250, only to fall back below $1000 again. All seemed reasonable. Every time it tried to jump out of its price band, it would fall back and behave like a ‘normal’ asset price should.

Then in May this year, it leapt out to a new record, $2000, and with a few self-correction (perhaps profit-taking) blips along the way a rocket fuelled run up began that took the price to $4000 in August, $6000 in October and $8000 in November. Each time it passed one of these milestones, there was an immediate drop, before taking a deep breath and climbing to new records within a few days. By mid-November it was on a geometric up slope, the kind of price increases you always see before a crash. The momentum has continued through December, starting the month just below $10,000 and now, 19 days later, almost doubling again.

No wonder it’s the topic of every barbecue, coffee catch up and dinner party.

Imagine investing $10K in it in January this year. It would be worth $180K today!

This type of steep rise only ends in a fall. And the steeper the rise, the harsher the crash landing will be. It has gone beyond rationality and flipped over into euphoria. A mate of mine’s every second post on Facebook is about bitcoin (“get in!“). When this happens, you know you are near the end.

If you look at previous speculative bubbles, which are easier to spot after they have burst, and the factors that have caused them, you can clearly see they are all present today in bitcoin:

5 signs of a bubble:

  1. Prices are sky rocketing exponentially
  2. Widespread media coverage
  3. Irrational exuberance over the asset
  4. People start to believe the hype
  5. People who don’t normally invest start to

As soon as you hear people say “we’re in a  new paradigm!” or “this time it will be different!” then you know it’s time to bail.

Not only are these 5 warning signals shouting at us loud and clear right now with bitcoin, you don’t need a long memory to think back to the pre-GFC stock markets in the run up to 2008, or the house price rises prior to 2006 in Western Australia and the ‘mining boom’. I lived and breathed a tech boom during the dotcom bubble of 1999/2000 forming my own e-business during that time. When the crash inevitably  came, we knew we would raise another bean for a while, and so it proved.

The bursting of the bubble

Once you have this irrational run up, a relatively minor event can burst the bubble and send prices crashing back down. The ‘Emperor’s New Clothes’ fallacy that had been holding it up is seen for what it is, and flight ensues.

For the dotcoms it was a famous Barrons article (‘Burning Up’) in March 2000 which explained how the land grab ‘revenue growth’ was slowing and most of the dotcoms only had a few months of cash left. As prices fell, people sold shares (if they could) precipitating yet more price falls.

Once those left holding bitcoin realise they are not worth $20,000 or more, then you watch as they try to get rid of them as fast as you can say ‘blockchain’.

When will it burst?

How much further can it rise? Markets have no upside ceiling, and people’s irrational exuberance can go on for a while. But burst it will.

Recent history may teach us a lesson…

The world wide web was created in 1989 and went live for the world in mid 1991. At the outset, it was the domain of computer geeks. It was not until a few years later most of us even heard about this new technology. (Sound familiar?) Around this time we might have set up our first email address and started visiting websites. It was a few more years on that dotcom businesses started up trying to sell us everything online. By the time we heard of a few dotcom billionaires in the late 1990s, everyone and their grandmother was investing in dotcoms. The NASDAQ index ran up from 1,100 in late 1998 to over 4,600 in early 2000…

The NASDAQ index (of mainly tech stocks) 1995-2017

From the time of the WWW being given to the world to the ultimate crash of the dotcoms was 103 months (~ 8 and a half years).

Bitcoin went live to the world in January 2009. Add 103 months to that and you get August 2017. So the bitcoin run up has already outlasted the creation of the world wide web and the dotcom boom.

Drilling down further, you could argue the NASDAQ bubble began in earnest in Oct 1998 and popped in March 2000, 17 months later. The bitcoin bubble started in March this year, so according to this expect a burst around August next year. Somehow, given the strength of the bitcoin bubble (18 fold rise over 11 months, as opposed to the NASDAQ’s quadrupling over 17 months) one thinks it could come much sooner than that.

Return to form, price landing

If you examine the NASDAQ chart closely, you can see that the exuberant run up during 1999 was corrected by the crash, then a slower rise through to late 2015, and then a slightly increased growth of the index throughout 2016 and 2017. The index is now even larger than at the peak of the dotcom boom. The difference this time is that it is being driven by actual results, not spin and marketing fluff. Google, Facebook, Apple, Microsoft & Amazon are now 5 of the largest companies globally, and are producing immense (and increasing) revenues and profits. They are trading at fairly sensible multiples of 18, so don’t seem over priced.

Where will Bitcoin land, post crash?

I have no idea, but you’d expect it to be in the range of its pre-bubble trend, which was around $1000-$2,500.

Although I am fascinated by the blockchain itself, I am not going anywhere near bitcoin, or any other coins (including ICOs) for that matter. Nor, you may be interested to know, is Warren Buffett. He didn’t invest in dotcoms either.

Real (estate) disruption

Last week I visited an old watering hole with a former real estate client. He’d been one of the first to give our fledgling online business a go back in our first year (1999/2000), when it was far from certain that we had a valuable service, or that we’d even survive.

[Our early clients gave us a ‘fair go ‘in that wonderful, open Aussie way. There’s something refreshing about this positive quality of Australian culture. It’s deep rooted. It explains why voters turn on governments that go early to the polls (Carpenter 2008) and why they backed the same sex marriage even though most would not get direct, personal benefit. It just seemed fair.]

Over a cool pint of Squires we reminisced over what has become of the real estate industry over the ensuing 17 years, and how it has adapted to digital disruption.

In many ways, the day to day job of the agent has not changed much. The essential ‘list and sell’ activities are much the same as they were in 1999. But a few things have changed forever.

We used to drive buyers around properties”, my agent friend recalled, “We’d have to arrange to get the keys of the various properties and then pick up the buyer and visit them all. We don’t do that anymore as these days everyone has the information to hand on their phones. Who’d have thought that back in the late 90s?

Another major change is more obvious – the shift from print advertising to online.

Back in 1999, the real estate lift out of the Saturday paper used to be 120 pages thick with row upon row of property ads. Last week’s lift out (if you call it that, as it took little effort to “lift”) was 20 pages thin, and most of this was taken up by one page display ad fillers. There were barely 4 pages of classified (lineage) ads. Back in the late 1990s, this lift out was the real estate bible. If it was not advertised in there, the listing was invisible. Agents would crawl over hot coals to get mentioned in the editorial section.

My real estate remembered a story of that time.

The newspaper salesman visited our offices every year to “negotiate” the annual price increases with us,” he told me, “One day he was acting so arrogant, it really got on my nerves. He knew he had me over a barrel. What choice did I have? I got so annoyed I almost kicked him out of my office, to which he said ‘But I can get you tickets to the footy!’

“‘I don’t want to go to the footy with you!’ was my reply.”

How the power has shifted since.

A quick back of an envelope calculation suggests that the local Saturday paper used to rake in $1million a week in classified real estate ads at the turn of the millennium. $50M a year. And they would have done similar numbers in car, boat and job ads.

Nearly all of that revenue has gone online since, lost forever. It’s a salutary lesson for anyone thinking they are impermeable to change.

If the mega-profitable price-making monopolist newspaper business sitting pretty in a secure, isolated market can be taken down like that, then who is safe?

Back in 2000, the relatively small real estate website business, realestate.com.au (now called the REA Group) was worth barely $6M, was running out of cash and close to folding. It had had 3 CEOS in 4 years. In WA, less than 30 (of the 1000 or so) real estate agency offices listed properties on its website. The business did not put sales boots on the ground until 2002. In 2000/2001, the same newspapers REA would later disrupt were publishing articles crowing over its imminent demise post dotcom crash.

Yet slowly and surely realestate.com.au took hold, and today, 17 years on, is worth $10Billion. Yes, ten billion. That means its value has risen 1,600 times over the ensuing years, and is far more valuable than the various print media empires it disrupted. Imagine betting a lazy $10K on that – it would be worth over $16M today.

REA’s growth in value was not some fast unsustainable bubble; it was a slow, inexorable growth borne from the strong underlying shift of real estate marketing dollars from print to online. It’s the kind of growth in value that sticks.

Fundamentally, online platforms offered better value than print (for advertisers and users), 24 hours a day service, and agents could update the ads themselves whenever they liked (rather than phone them in by Thursday lunchtime as they used to do). The web offered agents the ability to build their own virtual shopfront (website) and have databases emailing out new listings to potential buyers automatically (alerts). The web offered ease of comparison, mapping, calculators, access anywhere anytime, and the ink did not come off on your fingers either.

It was fairly obvious that the web would replace print over time, and the leading website would make the lion’s share of the money. Instead of dominating one local market, the #1  website would dominate an entire country, and that’s what REA Group did and why they are worth $10B.

The irony, not lost on my real estate mate, is that the internet did not save agents from paying exorbitant advertising fees, it just shifted them from print to online.

We went from the frying pan into the fire!” said my mate.

But here’s what I want to know,” asked my former agent friend, “When will we be disrupted? Will we be ultimately be replaced by AI or some new technology?

Now that’s a good question,” I replied, “You have to think it will happen in the next 5, 10 or 20 years. My guess is it will happen slowly, over time. While it’s happening, it will be easy to ignore. Many will scoff at the suggestion that real estate agents will be replaced by new technology like AI or an app. There  will be disbelief, laughter and scorn, just as the rug is being pulled out from under them. It’s exactly how print behaved just as they were losing the battle unknowingly.

“But what happened to print media, Blockbuster, Kodak, Nokia and the postal service… will happen to you someday. It might arrive with little fanfare. It might take years to take hold. But you can bet some well backed tech business will reinvent how property is bought, sold and rented. If they make the experience far better than an agent, and their system becomes trusted and feels secure while saving loads of money, you can be sure people will give it a go.”

That’s digital disruption, in a nutshell.

Change is slow, and that’s good thing

Methuselah is a 4,849-year-old Great Basin bristlecone pine tree growing high in the White Mountains of Inyo County in eastern California.

An oft-heard refrain these days is a lament “Everything’s changing so fast!” and it would be easy to sign up to this notion.

Look how we totally rely on our smartphones these days, turning to them an average of 150 times a day. It makes one wonder what we did for entertainment, news and chat pre-2007. And yet, we’ve only had them for 10 years. It’s gone in a blink of an eye.

See how Uber and Airbnb have blasted into our market, totally disrupting and changing the way we move around the city, or stay in other cities (or have total strangers to stay with us). Uber only got going in Perth in 2014, and has over 20% of the market. Airbnb launched into Australia a couple of years earlier and has upwards of 30% across Australia these days.

And yet, even these stories prove that the best changes – the ones that stick – take time.

There had been smartphones well before 2017, and phones with access to the internet had been around for a while. The best marketing the iPhone did was to announce itself as the game changer, yet even the iPhone took a while to take off. Early versions’ battery life was poor, and not everyone liked using a finger to tap on a virtual keyboard through glass. The Blackberry ruled supreme, and had a built in keyboard. This was much closer to peoples’ existing experience, which was why it was named “the crackberry”. Its devotees were obsessed by it.

The iPhone 3 was the version that took off, launched as it was with the app store in 2009. It was this moment that saw the inexorable shift to the smartphone (which  really should have been termed the ‘app phone’, as phones had been smart before – it was the apps that made them different now). The creation of the cottage industry of app makers was the true revolution, and this underpinned the smart (sorry, app) phone’s rise. Soon Samsung and Google jumped on board.

Looking deeper into the Uber and Airbnb cases you can see that they did not exactly take off as over night successes either. Launched in 2007, it took til 2011 before Airbnb would launch in multiple cities and gain traction, on the back of some serious capital raises in 2010. Likewise, Uber, founded in 2009, took a couple of years and then a major seed round in 2011 before it could launch in various jurisdictions with UberX in 2012. Indeed, Uber was not the first ride-sharing service, and they held back looking at the rulings coming out regarding the legality or otherwise of this new form of transportation. (Others could argue that ride sharing had actually been created in the early 1900s, or even the 16th century, but that’s another story.)

The history of even these wildly successful game-changing disruptors started with relatively quiet 2 or 3 years where things were far from certain. They were learning, pivoting and inching their way to the best formula. When I meet tech founders who think they’ll take off immediately with hockey stick growth I tell them the real stories of hardship, years and years of struggle, before even the best break out. Are you up for that? Founding a startup may seem glamorous when you see the gazillionares adorn magazine covers, blaze around at Burning Man or stomp across tech conference floors delivering well honed keynotes in their black t-shirts, dark blue jeans and high end trainers. But they all had hard starts, and there were many failures, mistakes, missteps and sleepless nights. It’s not all glamour, believe me.

So I would argue that change is slow. Indeed, the best ideas always grow slowly, and that’s a good thing, because things that grow slowly tend to last a long time.

Just talk to a turtle (average age 100 years) or Methuselah, a Californian bristlecone pine tree that was seeded in 2,833 BC. She ain’t pretty, but she’s still here.

Slow is good. Slow and steady wins the race. It’s hard work. It’s not very glamorous. It’s a million small things you do, day after day after day, that get you there. There is no silver bullet. And that’s a good thing.

Jobs jobs jobs?

Panelists discussing the future of the job (left to right): myself as moderator, Colleen Yates, Nate Sturcke, Colin Barnett, Phebe Cho, Julian Coyne, Pia Turcinov.

Australia has notched up a world record – 26 years without a recession. That’s the longest time between recessions for any developed country, since records began.

During  that time Australia has withstood the Asian economic crisis of 1997, the tech crash of 2000, 9/11, the global financial crisis of 2008 and a mining construction slowdown post 2012.

The last time Australia had a recession, in mid 1991, Bill Hayden was Governor General, Bob Hawke was Prime Minister, Carmen Lawrence was Premier of WA, and we had the first Gulf War. Bryan Adams’ Everything I do, I do for you was number 1 forever, other hits of the year were I’m too Sexy, Things that make you go Hmmmm and Ice Ice Baby…. agh they don’t make ‘em like that these days do they?

Back in ‘the recession we had to have‘ (as then Federal Treasurer, soon to be PM, Paul Keating termed it) Federal opposition leader John Hewson affirmed the GST as a major policy platform (which later became electoral suicide). The Simpsons debuted on Network Ten, Hawthorn beat the Eagles in the grand final and Mitchell Marsh was born. The population of WA was 1.6m, 1 million less than today.

There’s no doubt the Australian economy has been resilient, and been fairly fortunate. A whole generation has grown up with almost full employment, low interest rates, more and more jobs, rising standards of living and lots of opportunity.

The current Aussie economy is dynamic, with over a million Aussies changing jobs annually, with businesses constantly entering and exiting various marketplaces.
While agricultural and manufacturing jobs have declined in total numbers, the expanding service sector has taken on more.

12 million people have jobs in Australia – 6.5M men and 5.6M women. Healthcare and social assistance is now the single largest industry, accounting for over 12% of the workforce. Unemployment has held steady around 5.5%.

And yet… there is an impending sense of unease out there.

When some people hear politicians and even a Prime Minister spruik ‘Innovation’ all they hear ‘redundancy’ and ‘unemployment’.

Change, although the only constant, is threatening and scary. It makes people look for the easy scape goat solution, be it Brexit or Trumpism.

The answers are not so straightforward.

A few months ago my teenage daughter bemoaned to me that she does not know what she wants to do when she is older. I told her not to worry.

“The jobs of 5 and 10 years’ time have not been invented yet, isn’t that amazing?!” I say.
“Well, that doesn’t help!” comes the reply. “Take it from a former CEO like me,” say I, “the employers of tomorrow will want your creativity, your leadership skills, that you can work in a team, or independently with initiative on your own, your problem solving, your empathy with customers… THAT’s what they’ll hire. Learn & demonstrate those skills and you’ll be fine.”

But what kind of jobs will be there for our kids and grandkids in the near future? What industries will fall, and what new ones will rise? Will we even have a thing call a “job” or a “career”? Does it even matter? Will more of us have more free time? Will robots be waiting on us hand and foot, or by robotic arm and robotic wheel?

This was the topic of an Innovation Summit I moderated recently, a 4-minute chat with the panellists from West TV can be viewed here.

Some of the discussion:

  • while a robot might replace 5 manual workers, every new tech job creates 5 more.
  • some jobs will disappear, others will be required.
  • many of us may will enjoy a ‘portfolio career’, where we take on several titles – we’ll be part social media consultant, part MC, part web developer, part teacher.
  • A (Cognizant) report declared recently that the following jobs will be created within the next five years: data detective; bring your own IT facilitator; ethical sourcing manager; AI business development manager; master of Edge Computing; walker/talker; fitness commitment counsellor; AI-assisted healthcare technician; cyber city analyst; genomic portfolio director; man-machine teaming manager; financial wellness coach; digital tailor; chief trust officer; and quantum machine learning analyst.
  • Within the next 10 years we’ll have: virtual store Sherpa; personal data broker; personal memory curator; augmented reality journey builder; highway controller; and genetic diversity officer.
  • It will be important to spread our risks as an economy – the mining industry is super wonderful when booming, and awful at other times (which is the majority)

The “death of the job” has been predicted before. Although the disruptive changes we are seeing seem to be changing more things more rapidly, there is time to adjust, and new opportunities will always be thrown up. The winners will probably be those (countries, states, organisations and people) that can adapt, and the losers will be those that are stuck in their ways.

Selling to all kinds of people

BOLT-animals

Anyone can buy things, but selling doesn’t come naturally to everyone. That’s perhaps why 97% of home owners in Western Australia use a real estate agent to sell their home. No doubt it’s also because the agents have the experience and expertise to sell houses. It’s what they do, after all. The average person only gets to sell their house (usually via an agent) every 7 years or so.

After 13 years in teaching, I ended up running my own business and was immediately thrust into the nip and tuck of direct selling. To real estate agents! It did not come naturally to me, but I found it easier if I just acted as natural as I could. I found I could actually make sales. Some days I was better than others. But at least I could do it. I learnt new things every time I tried it.

Wind on almost 20 years and I came to work with the expert sales trainer Mark Wilensky (High Mark Systems), who is based in Maryland, USA. He taught me and my team the importance of understanding who you are selling to using something called the “BOLT” personality types.

It’s gold. And it works.

There are four main personality types, says the theory, defined by how open or closed the person is, or how direct or indirect they are. Each personality needs to be approached in a different manner, if you want the best outcome. (see Diagram above.)

BOLT stands for Bulls, Owls, Lambs and Tigers, each of the four main personality types. Everyone can be a mix of a couple of these, but tend to be more dominant in one of them, and this gives us clues as to how to interact with them…

BULLS … are DIRECT/CLOSED. Typical examples: CEOs, GMs & BDMs.

They are the classic ‘Alpha Males’ (used in the non sexist generalist sense, I have experienced females who are also very alpha). There’s not a lot of subtlety here. Bulls are direct, and closed. So they don’t give away much (closed), but if they don’t like you or what you’re saying, they’ll say it to your face (direct)!

They like the bottom line, and hate time wasters. They will ask direct questions, and want straight answers with no waffle. They hate long winded answers, so give short answers and say “would you like more detail?

They like you saying “let me cut to the chase” and “here’s the big picture”. They see things in black and white, have courage and confidence, so express these qualities when you walk in. I came across a lot of Bulls in real estate, I can tell you.

OWLS … are INDIRECT/CLOSED; typical jobs include CIOs & CFOs.

Like Bulls, they are closed (so you have to do the work), but unlike bulls, are not direct with you.

They are probably thinking “how can you prove it?”. Owls want data, proof, information. They hate “most of our clients do this” (too woolly, salesy), “probably”, “most likely” and fakery. They are risk avoiders.

They like you saying “let’s walk before we can run” or “My job is to provide you with enough information so you can make an informed decision.” If you don’t know the answer, admit it. If you’re usually enthusiastic, tone it down, slow it down. Most decision-makers within the organisation will be Owls. They have direct control over the purse strings.

LAMBS … are OPEN/INDIRECT; typical jobs include librarians, nurses, social work.

Lambs avoid conflict, so they find it hard to say no. They will drag you along for ages (indirect), so you need to cut them loose early. They will do your head in with delays, and it’ll be hard to shut them up (open).

Say things like “Let me know if you’re not convinced that we are a perfect fit.” (allows them to say no). Speak slowly, as they can get intimidated easily. You need to show them how the majority will benefit – this they like.

TIGERS … are OPEN/DIRECT; and can usually be found in sales, mid managerial roles.

They have a short attention span. Meetings are fun (open), but they’ll be quickly onto the next thing (direct). Don’t throw in too much detail, or be boring. Keep it moving, entertain them.

They like “we’ll take care of the detail, so you won’t have to.” They like dreams and big wins. “What will you do with your wins?” (they’ll tell everyone).

As a general rule, people who are strongly in one personality quadrant find it difficult selling to those in a diagonally opposite quadrant; so Bulls find Lambs very frustrating, and Tigers similarly find it hard dealing with Owls, and vice versa.

How do you spot a Bull from an Owl from a Lamb or Tiger? Listen to them.

Say your person is running late to a meeting, and you’re there at their office on time waiting. You get them on the phone. Here’s what each might say…

  • BULL (Loudly) TRAFFIC’S C$#P!! BE THERE IN 5!!! … YEAH, SAME TO YOU FELLA!
  • OWL I’ve been stuck here for 17 minutes, I’ll be with you in 6 minutes, maybe 8 or so.
  • LAMB I’m sooo sorry… I feel awwwful, how terrible of me to be late, are you OK? … etc etc
  • TIGER It’s crazy bud! Heh, sorry mate, I’ll be there as soon as I can! I’ll make it up to you.

The secret is to turn off your auto-pilot (selling to everyone in the same way) and pay attention to who you are selling to. Adjust your delivery, script and manner according to the personality. Stop the patter and listen.

Oh, and know thyself. I’m a classic Owl (analytical), with a few Tiger (stage performer) tendencies.

For more on BOLT personality types: