Solar Powered Air Conditioning?

LG is getting a lot of media coverage for its Solar Hybrid Air Conditioner (model F-Q232LASS) but so far, no one has bothered to do any technical analysis on it. Most blog articles have nothing but enthusiastic praise for it. So, please allow me to provide an alternate viewpoint.

I think this is a product intended just for PR purposes. Some people may look at it and think it is a solar powered air conditioner. Much of the news coverage uses the unrelated logic of how much CO2 it saves or, even more curiously, how it’s like ‘planting 780 pine trees’. As a side note, when someone starts describing an energy benefit with the lifetime CO2 savings and avoids discussing actual costs, be aware that you’re about to be bamboozled. The solar panel on top of the air conditioning unit produces a small amount of energy; according to LG it’s 70 watts. In case you’re curious, that amounts to about $12 of electricity per year, assuming a cost per kW-h of $.10 and average capacity factor of solar panels. That also assumes the electricity it generates can be used by other appliances when the A/C unit is not running and I’m not sure if that’s the case or not.

The air conditioning unit is rated at 28,000 BTU/hr. Assuming a SEER of 13, that translates to a 2800 watt draw, not including the fan the circulates the air through the evaporator and the house, which can add another 900 watts or so. That would mean that there’s a 52:1 difference between the air conditioner’s energy draw and energy produced by the solar panel. I am assuming that there is a grid-tie inverter that puts the energy generated when the air conditioner is not running into your home to offset other energy consumption. If not, then the solar panel output would only be used when the A/C was actually running and that would reduce the $12/year of annual power generated considerably. Also of note is that most residential air conditioning loads occur from around 4-6 p.m. when people return home from work. At that time the sun is much lower in the sky and solar output is about 20% of a solar panel’s maximum rating.

An air conditioner needs to get rid of the condenser’s heat and so it’s best placed in the shade. In this case, however, the condenser would need to be placed in direct sunlight, which counteracts what it’s trying to do, namely to get rid of heat, so that would negatively affect its efficiency. In addition, the condenser needs unimpeded forced air flow which is generally done with a fan that blows air from bottom to top to get the added benefit of natural convection since heat rises, but this unit’s fan has to blow air from side-to-side because the solar panel on top would block bottom-to-top air flow. I should also mention that solar panels work best when they are cool so attaching them to a hot condenser doesn’t help their efficiency either.

You’d be better off with having a solar system that is completely independent of the air conditioning unit because it introduces too many compromises in each of the respective systems’ design goals.

Nice try LG, but this product is no better than one of those solar powered attic fans which is another idea masquerading as a solution to a problem that it doesn’t solve.

I should mention that I am a big fan of solar energy. We use a solar array to power our home and it is a net energy producer, generating more electricity than we use on an annual basis. I hope to someday use the excess for a plug-in hybrid car. The reason I felt compelled to write about this topic is because I just get tired of rip-offs and scams that prey on people’s trust (and ignorance) when it comes to energy savings schemes so I have to call them out.

SparkFun Free Day in Progress Now

My friend Nate, who owns SparkFun Electronics in Boulder, decided it would be a neat idea to give away $100K in free products. Each customer is limited to $100 of free stuff. It is a way to test the new servers and see what kind of load they could handle. It started at 9:00 a.m. MST this morning and I was figuring they’d run out of free parts in just a few minutes. However, it’s been going on for over an hour and the servers are so overwhelmed that they can only process about $16K per hour, which means this is likely to continue on for most of the day.

SparkFun sells electronics to hobbiests, particularly those who like to design their own microprocessor-controlled devices. They have a large selection of Arduino parts and I have a shopping cart full of them right now…. if I could only check out I’ll be able to get them for FREE

Barnstorming and other Adventures

1929 Travel Air

While reading the Slashdot feed yesterday I saw a reference to a site that was exposing the Internet get-rich-quick schemes that are so prevalent these days. The article referenced a website called undress4success.com. Despite the attention-getting title, I learned that it was dedicated to providing useful information to people who are working from home. It provides resources to help people who like the idea of a 2-second commute and the site’s owners regularly gave the low-down on scams that prey on those hoping to make a living working from home. The most recent article was related to the ‘Work for Google’ scams that are being actively pursued by Google’s legal team, since they are not endorsed or supported by Google. The scammers are just trying to profiteer from pretending to have an association with the Internet search giant.

I like to expose scammers. Seeing unscrupulous charlatans abuse the goodwill and trust of others is just one of those behaviors that I can’t sit by and idly watch. Several of my most popular blog articles are related to exposing scams like the Amish Heat Surge miracle heater, the Arctic Cool Surge (yes, same company), and exposing the unworkable mathematics of all MLM schemes.

I was reading through the website and I started to realize that the couple running it had a very familiar-sounding story. They mentioned that they had started a Barnstorming business in Pennsylvania in the early 1990’s, moved it to San Diego, and then grew it to 7 aircraft and 25 pilots before selling it and starting this new website and promoting their book entitled Undress for Success: The Naked Truth about Making Money at Home which is about how to work from home. It was Kate and Tom, the same couple I had met at New Garden Airport, all these years later! It’s certainly a very small world.

I had been working on my own article about people who make money by selling others on the idea of how to make money on the Internet. The funny thing is that many of these sites are all writing about the same thing, which usually involves selling ’secrets’ or starting an endless cycle of recruitment for information products. It sounds a lot like an abusive MLM business. The kingpins in the worst MLMs don’t actually make their money selling products, they make their money selling high-margin ‘educational materials’ and ‘tools’ to unsuspecting recruits month after month. This is precisely what these get rich quick membership sites (who generally want a direct line to make a monthly withdrawal from your bank account) are up to. When it’s all said and done, they sell you on a business that is nothing more than a recursive cycle for you to try to write and sell the same kind of information on the Internet. But who wants to buy from you when they can go right to the source, i.e., the guy holding up an image of his big earnings check on every one of his pages? They augment this income with a other questionable affiliates all who have something to sell you that sounds like it will teach you to get rich quick. Or, if not that, then information on how to get flat abs, or get ripped like Arnold Schwartzeneggar in 4 weeks.

I just purchased the book based on the positive reviews I’ve read on Amazon. Websites that educate people on the perils of scams tend to restore my faith in humanity and I always feel good when I come across one.

And if you can’t live without a ride in the vintage Travel Air, you can find it at Barnstorming Adventures (phone: 800-759-5667) located at Montgomery Field Airport in San Diego flying under the new ownership of another couple who no doubt purchased the business as an insurance policy… an insurance policy against a boring life.

Remember, if something sounds too good to be true, it probably is, and on the Internet, that goes double.

The Sun Also Sets

Sun Microsystems has always intrigued me. For a number of years, it seemed as if the company could do no wrong. During the early 1990’s, Sun occupied the top position in high performance computer workstations, a category of computing that has since virtually disappeared thanks to advances in PC hardware. Despite desperate attempts to unseat it from its leadership position by worthy competitors like HP, DEC, and IBM, Sun was able to prevail.

If you had purchased Sun stock in May of 1994, you’d have seen it skyrocket to nearly 100 times its value by August of 2000, just 6 years later. Had you kept it at the historical high price of $253/share, you’d have seen your investment lose more than 98% of its value when it came back down to just $3.17 a share by October 2008.

SUNW/JAVA stock price meteoric 100x rise and fall

Java had an incredible amount of hype surrounding it. Something that would relegate the Microsoft Windows operating system into a well-deserved irrelevance had finally arrived. No longer would all the popular desktop programs be forced to use Microsoft’s proprietary OS. Instead, applications could be written in Java and run equally well on a Mac, a PC, or any number of Unix-derived operating systems. It was a simple matter of providing a run time environment for each computing platform. That run time environment became known as the Java Virtual Machine (JVM). If you have an orange coffee cup in your systray that always seems to be begging for an update, then that is an indication that you have a Java Virtual Machine on your PC.

The JVM looking for an update

For a while, many websites required the JVM to work properly, but lately I’ve noticed it has become much less necessary. And very few commercial desktop programs require a JVM. Whenever I install a new Windows OS, I can sometimes go for months before realizing I haven’t downloaded Sun’s JVM.

The Java programming language should not to be confused with JavaScript which is a completely different language used primarily in web browsers which was developed independently of the Java programming language. JavaScript was developed by Netscape and was originally called LiveScript. When the folks at Netscape saw the positive response Java was enjoying back in 1996, they made a cross-marketing agreement with Sun to rename LiveScript to JavaScript to tap into Java’s significant cachet. Netscape agreed to promote the Java language in exchange.

Despite all the hopes and dreams of Sun and enthusiastic Java developers, this ‘write once, run anywhere’ promise never achieved its potential. Today it looks even less likely that Java will unseat Windows from its hegemony on the PC. Apple has only recently managed to make some progress on the Windows desktop monopoly by finally breaking through single digit market share of installed base. Apple is now at 10% market share vs. Windows at 88.7% share according to a ComputerWorld report. But when it comes to desktop apps, Apple still relies on Microsoft to deliver the goods in the form of Office applications even for its Mac OS. I guess we’ll see if Google will have better luck than Apple in unseating Microsoft on the desktop with Google’s upcoming desktop OS and cloud computing approach to applications.

After Sun developed Java, it appeared to change directions. Sun seemed to be intoxicated with Java’s assured future success. This infatuation with a language that had failed to achieve its mission in any significant way 12 years after being introduced reached its zenith when Sun changed its stock symbol from SUNW to JAVA in 2007. I think it was Sun’s way of turning its back on its hardware roots in exchange for the promised fortunes of free software. For Sun’s market cap, the downhill slide continued despite the new stock symbol.

I had worked with Sun back in the late 1990’s and found that if you emailed Sun a Microsoft Word document it would be rejected along with a request that you to re-submit it in HTML format. I thought this was rather odd, since Microsoft’s Word was emerging as a defacto standard and surely someone at Sun should have been able to convert it to HTML. But then I found out that Sun employees didn’t have Windows computers and weren’t allowed to buy them. This was around the time that laptops running Windows were becoming indispensable business tools. Sun had acquired an insane hatred for all that emanated from Microsoft to the point where the use of its products was prohibited. In essence, Sun’s management had constructed a reality distortion field for itself and the rest of the company.

Sun acquired StarOffice in 1999. It later offered the software as a free open source “almost-compatible” alternative to Windows Office applications and called it OpenOffice. I’ve used OpenOffice which is the free version of StarOffice, but have found the applications lacking true compatibility. It feels like a product that was built without any apparent business model in mind, unless you consider a quixotic attempt to marginalize your archenemy’s revenue source to be a business model.

Sun had always been vertically integrated, supplying not only its own operating system, but also its own computing hardware all the way down to its Sparc CPU. Sun made some early tentative steps to get its Solaris OS to run on x86 CPUs, but the early efforts never really gained much traction, likely an indication that they were conflicted about making it work. Instead of figuring it out, Sun abandoned those efforts and continued to promote its Sparc architecture, and continues to offer Sparc-based hardware to this day. I believe it was this decision to try to do battle with not just Microsoft, but also with Intel, that furthered Sun’s problems. Sun entered into an alliance with AMD in 2004, but AMD has problems of its own, namely that it has to compete with Intel too. Finally, in 2007, Sun began working with Intel by adopting Xeon CPUs for its high-end servers. But I think it was too late at that point.

In 2004 Sun arrived at a legal settlement with Microsoft, claiming the company was exercising its monopoly position to ruin Java, earning it $1.95 B for its years of legal wrangling. However, I think the damage done to the relationship between the two companies was beyond repair. By the time of the settlement, Sun was hemorrhaging. Giving an ailing company that much cash is like giving it to a crack addict. They’ll only use it to go on a binge and, based on the sort of acquisitions made after that point in time, that’s exactly what happened.

Sun spent $1 billion to acquire MySQL in 2008, an open source database project that was no doubt starting to give Oracle and its competitors cause for concern because it was encroaching on the highly profitable database business. This acquisition did little to boost Sun’s prospects because MySQL really didn’t seem to fit in anywhere at Sun, and it’s hard to imagine there was any potential for revenue since MySQL was already open source and freely downloadable. Only about 1% of MySQL customers were paying for it. That sort of genie cannot be stuffed back in a bottle. To make matters worse, Sun was determined to move it upstream by improving its performance, furthering its threat to database companies who were still charging for their software.

By early 2009, Sun, having lost nearly 98% of its market value and suffering from years of losses or break-even results, was looking to be put out of its misery by being acquired by a rival. IBM appeared to be the front runner but in a surprise bid, Oracle came in and made an offer that Sun accepted instead. The deal is still pending some regulatory approvals.

What Oracle expects to achieve with Sun is anyone’s guess, but I think Oracle made the deal to get its hands on MySQL and to make sure it never becomes a competitive threat to its primary source of revenue. Despite claims to the contrary, Oracle has no need for Sun’s hardware business because it is no longer sufficiently differentiated from the competition. Sun’s software businesses have never made any money when one considers the cost of developing, supporting, and defending them. It’s just mystifying to me what Oracle’s Larry Ellison thinks he’s getting for $7.5 billion. I suppose if the company can be parted out, Ellison will be able to derail further development of MySQL, keep Sun’s $3 billion in cash, and sell off the rest of the company in an effort to recoup the remaining $4.5 billion. Oracle probably won’t risk entering the hardware business and thus alienating key allies like HP, Dell, and IBM when it comes to offering its database server on their hardware. My guess is that once the deal is approved and things quiet down, a fire sale for what’s left of Sun’s assets will ensue.

Sun was a formidable company in its heyday, and I’m sure there are still a lot of smart people there despite Bill Joy’s proclamation to the contrary, now known as Joy’s Law, that ‘most of the smartest people work for someone else’. That statement comes across with such a demoralizing thud that it’s hard to wrap one’s mind around its true meaning. Scott McNealy, Sun’s former President and CEO, known primarily for his sarcastic sound bites about Sun’s competitors and his periodic resurrections, has somehow been silenced. I don’t think he’ll be making a reappearance because Ellison is not the type of person who likes to be upstaged, as can be seen from the YouTube video below where he amuses the audience with his take on Cloud Computing.

Despite the multitudes of really smart people at Sun, its decline, fall, and consumption shows that no amount of technical brilliance can overcome bad decisions on the part of management.

Business Relationships vs. Hostage Situations

I’ve been working with computers for a very long time, dating back to the time when you needed to use punched cards to program them. After graduating with several engineering degrees from Penn State, I went on to design computer peripherals for a major computer firm for many years. Because of my computer experience, my friends, most of whom are not computer experts, often use me as their first line of defense when they have a computer problem. And these days, “business is a boomin’.”

Part of the reason people have trouble with their PCs is because of the aggressive nature of companies trying to shove services down the throat of anyone who gets on the Internet. Not content to festoon what might otherwise be useful information with blinking banner ads, the new target of choice is the browser’s toolbar.

Last night I was helping my auto mechanic friend with his computer because it had lost his user profile, and Windows would let him log in but wouldn’t remember any of his desktop icons or save any of his browser’s bookmarks. He needs his computer to do his job as a mechanic since GM has moved all of its documentation on-line and without a computer, you just can’t function as an auto mechanic anymore. I know that sounds unbelievable but it’s true.

While I was adding a new user and copying his data over from his prior user’s settings, which seems to be the only way to fix a broken user profile on Windows, I noticed that his browser real estate had shrunk considerably since I first helped him to set up the computer. Why? It was because numerous toolbars had somehow managed to install themselves without my friend’s help. I suppose he may have helped a little but I can assure you it wasn’t intentional. I know this because his smile brightened more each time I managed to make one of them disappear. So in addition to fixing the main problem, namely the lost Windows profile, I also spent a lot of time cleaning up the computer.

Not only did I remove the offending toolbars, but I also removed all the miscellaneous links HP had included in his browser before he even set up the computer. He was too afraid to delete these items for fear he might break something. I call this stuff ‘crapware’, because it usually induces a customer to try crippled versions of programs or services which seek to get him to sign up for a perpetual subscription to an unnecessary service. And I should mention that the computer crawled along at a snail’s pace because of its heavy-handed virus protection software which his employer requires him to use, at his expense, of course.

I might have forgotten about this travesty and you’d not be reading it here, but then I got spammed by Sun today. I’ve been constructing an article in my head about Sun Microsystems which I will publish soon about how this once proud and capable company is now engaging in a desperate attempt to monetize the un-monetizable, namely Java, by using Java’s persistent need for updates as a trojan horse. I made sure to visit Sun’s CEO blog, written by the pony-tailed Jonathan Schwartz himself, just to make sure that was their plan. Sure enough, it was.

In my haste to quiet that little Java coffee cup by saying ‘yes’ to the update, it installed Carbonite’s crapware on my PC. Now, I’m no fan of on-line backup services and had previously written a critical review of what I think of them. Part of my view is colored by an image that I will now convey to you. Hang on, because I think you’ll like it. In any event, I can guarantee you won’t forget it.

A few years ago I witnessed a sales pitch for a service to provide on-line backup. I won’t mention the perpetrator, and you’ll never guess who it was because this idea was pitched by at least a million companies over the past few years and it’s one of those bad ideas that simply will not die. But during the presentation, the presenter took several opportunities to indoctrinate us, much like he was reciting a mantra, with this phrase:

“When you hold the customer’s data, you hold the customer.”

Along with this mantra, delivered with pregnant pauses both before and after, he used a hand gesture. Imagine holding an invisible tennis ball out in front of you at approximately waist level, palm pointed upward. The image is that of grasping and squeezing a person’s unmentionables. Wow! I think I knew where he was going with this. It wasn’t a business relationship he was proposing, it was a hostage situation.

Thanks, but no thanks. I’d prefer not to get involved in that kind of thing.

Yet it is precisely this kind of desperate business model that gets investors all worked up these days. No longer can you propose to provide a useful and valuable service for which people are willing to pay. Instead you must trick them into accepting something (often something offered for ‘free’) and then force them to become some sort of stooge, paying you perpetually for your right to continually abuse them.

I can only hope that this nonsense fades into oblivion, because I don’t want to live in a world where every business relationship requires duplicity and, eventually, larceny.

The next time someone is proposing to give you something that sounds like it’s for free, grab your wallet and anything else you’d like to hang on to and run in the opposite direction, because if you don’t, your valuables will soon be in the possession of someone who may not treat them with the same respect that you have for them.

Cool Surge Scam Artists at it Again

Last year I wrote a blog article about a Miracle Amish Heater that generated a ton of traffic. I was even interviewed by the New York Times as a result of that article. Well, the company that brought us the Amish Heat Surge is at it again, and this time they are doing something even more despicable. They are misleading customers in their ads about a new cooler that uses ‘96% less energy than a window air conditioner’. There’s good reason it uses so much less energy than a window air conditioner, and that’s because it only has about 7% of the cooling capacity of a typical window air conditioner.

The $300 product is called the ‘Cool Surge‘ and it uses ‘glacier packs’ that you freeze and then load into the device so that a fan can blow air over the packs and presumably cool the room. Well, there’s only one problem with that approach and that is that device will actually make your house hotter, not cooler! Why? Because the energy it takes to freeze the ice packs comes from your refrigerator which exhausts the heat it removes from the water into your home. They conveniently forgot to mention this in their advertising. In fact, they say that the unit can’t be measured with a BTU rating. That is complete nonsense.

The BTU rating of this so-called cooler is absolutely minuscule compared with even a small window air conditioner. A small 5000 BTU/hr window air conditioner produces the equivalent cooling to melting about 35 lbs. of ice per hour. This cooler holds 12 lbs. of ice total. That’s about 1.5 gallons. Think about the volume of 1.5 gallons of water. You’ll be using a large portion of the space in your freezer to continually re-freeze these glacier packs. Assuming you swapped out these packs every 4 to 6 hours, which is how long they last according to the website, this device would have only about 7% of the capacity to cool a room as a window air conditioner. And, don’t forget, freezing the packs simultaneously puts all the heat removed from the water (and then some) into your home. There’s a good reason that air conditioners need to be vented to the outdoors. It’s because they need a place to dump the heat that they remove from inside your house. You cannot cool a house with a closed system like this.

I wish I could talk with the engineers who dream up these scam products just to see what they are thinking. I cannot fathom how they sleep at night because they are swindling their customers and the worst part is they must know it.

Free Agent Nation – book review

In February, I wrote a book review about a book entitled “A Whole New Mind: Why Right-Brainers Will Rule the Future” by Dan Pink. A few days after I wrote the review, my good friend Jeff Patton from NYC visited us for the weekend. Jeff and I met in 1987 when we were working at HP in Avondale, PA. During one of our discussions, he mentioned that a high school friend of his was married to someone who had written a best selling business book which had helped to propel his speaking career. I had asked him what the book was called, since I tend to pay attention to business books and thought maybe I had heard of it. Jeff struggled to remember the title, but couldn’t recall it off the top of his head. The next day, I was quoting some fact I had learned from “A Whole New Mind”, and Jeff stopped me mid-sentence and said, “That’s IT! That’s the book title I was trying to remember yesterday!”. I could hardly believe it. I had just read the book, wrote up a review of it, and then my friend who I’ve known for 20 years turned out to know the author personally. It’s one of those synchronicities that is hard to ignore. I also noticed that Dan Pink had written a best-seller previously entitled Free Agent Nation: The Future of Working for Yourself. Since I had recently become a free agent myself, I decided to pick up a copy of it. The day after I started reading it, I was at a meeting and one of the presenters had asked if anyone had ever read ‘Free Agent Nation’. Again, I couldn’t ignore the obvious synchronicity. I’ve since finished it and wanted to highlight some of its points and also put in a recommendation for it as a very worthwhile book to read, especially if you’re a free agent or considering becoming one. Before I do that, I want to provide a little of my background.

In my formative years, the conventional wisdom was that a person should stay in school, get good grades, go to college, and get a job for a respected and well-established company. I took this advice to heart and after graduating from Penn State, I went to work for Hewlett-Packard. I had considered HP to be at the very top of my list for years, ever since my father had brought home a calculator when I was a teenager and let me play around with it. You’ve no doubt heard one of the laws formulated by Arthur C. Clarke that stated that any technology sufficiently advanced is indistinguishable from magic. Well, at age 13, getting to play around with that calculator and seeing how fast it would calculate factorials was magical. A factorial is the product of all integers from one to a given number. It’s written as the number with an exclamation point. For example, 4 factorial, written 4! is equal to 1 x 2 x 3 x 4 = 24. The HP45 could evaluate up to 69 factorial before it overflowed the exponent capacity of the calculator. It did all these calculations in less than a second. It was astonishing.

I guess this event must have made a significant impression on me because it played a role in me landing a job at HP after college. I subsequently ended up staying for 24 years. Things changed significantly from the time I started at HP until I left but what I noticed as the biggest change was the way that people were hired and how long they stayed. When I started at HP in 1983, it wasn’t unusual to find people there who had worked at HP for their entire careers. There just wasn’t a better place to be, nor were there many good reasons to leave. When one project was done, it was a simple matter of moving on to another. The company would even help you to get assigned to the next project. But as time went on, I started to notice that if you were part of a division that wasn’t performing well financially, then your career could end suddenly and you might find yourself out on the street. In essence, the lifetime employment path was no longer an option. Keeping one’s job was sometimes a matter of being in a division that was financially healthy or having the keen sense of timing to switch divisions at the appropriate time to avoid a layoff. The effect of this change is that many of people who were intent on staying with a company are instead becoming free agents.

Today, pledging loyalty to an organization, a loyalty that can no longer be reciprocated, is virtually impossible. Instead, people are becoming free agents and going to wherever there is a need for their services. In some cases, people are working on a part time basis for several employers at once. This provides a form of employment diversification that you can’t get from working for a single employer.

So how did this situation come about? The first reason for the rise of free agency is that there can no longer be a long-term social contract between employees or employers. Things change too fast. Companies get bought, sold, merged, and go bust at a dizzying speed. It would be lunacy to pledge loyalty to a company when these conditions exist. Another change is that you can do productive work today without the need to acquire a lot of capital. For some professions, the only physical assets required are a computer, a phone, and access to the Internet. These assets no longer require the resources of a large company. We also have widespread abundance of the basic necessities for life. My observation is that people spend most of their income on things that weren’t even available or necessary 100 years ago. One could argue that many of them aren’t necessary today. The basic needs like food, shelter, and clothing can be provided for a smaller percentage of an income than was possible previously. This means that people are not living as much of a hand-to-mouth existence as was commonplace throughout human history. So having an unpredictable level of income is not as big an issue as it may have been at one time, provided you can reduce your expenses accordingly. People are also becoming more particular about how they earn a living and are not as willing to put up with soul crushing work as they may have been in the past when they needed to do it just to feed and clothe their families.

The ability to network with peers, find opportunities, and get support as a soloist is better today than it has ever been. With the Internet, there are people from all over the world who are able to seek out opportunities and provide services for each other, often without the need for physical proximity. Unlike conventional hierarchical structures, free agency is a meritocracy where one must follow the Golden Rule to maintain one’s reputation. For many people, that’s a welcome change.

Today, more business is also being done by way of virtual infrastructures. With the advent of ad hoc meeting places like Starbucks along with office superstores and service centers like Kinko’s/FedEx, independent workers have easy access to services that were not available to them previously. You don’t have to own a copy center or a mailroom, you can simply rent them.

Free agency allows for opportunities for workers to blend family and work together. A free agent who works from home gets to spend more time with family, which is more aligned with human needs and desires than what is required by an organization that needs standardized education that separates family members for most of their waking hours. In other words, you may have more opportunity to strike a favorable work/life balance as a free agent than you do with the more conventional employer/employee arrangement.

One of the eye openers I got from the book was the concept that group health insurance in the U.S. arose accidentally when the U.S. government, in an effort to freeze wages with the 1942 Stabilization Act, induced employers to start offering group health insurance plans as a way to attract employees. This benefit, for the most part, has since been exempt from both payroll and income tax. But group health insurance has a downside too. For example, if you or one of your family members is not in perfect health, it’s difficult to get health care coverage unless you join a company so you can get access to a group plan. As medical costs have risen out of proportion to wages, this benefit can have the effect of trapping people in jobs they don’t like. Health insurance can still be a challenge for some free agents unless all family members are in good health.

It wouldn’t be right to talk about free agency without mentioning the free agents who are classified as ‘temps’, many of whom would prefer a full-time job with an employer but have to make due with a degraded status that denies them access to benefits like health care, vacation, and a pension plan. In some cases, these people are not free agents in a voluntary sense, but rather because it’s the only alternative they can find. The worst situation is the ‘permatemp’, i.e., someone who does the same work as a permanent employee but at less pay and with no benefits. In some cases, these people are hoping to be hired full time and so the job is almost viewed as if it’s an extended job interview. It would be best to understand an employer’s expectations prior to taking a temp position because some employers may really be looking for temporary workers who they can dismiss at a moment’s notice, and if that’s the case, you should not take a job like that unless you’re in agreement with that arrangement.

Retirement for a free agent may be a lot different than it is for an employee of a large company. For a free agent, there’s really no need to retire completely. As long as you are able-bodied and have a desire to continue working, then there’s no need to sit on a beach drinking Mai-Tai’s or playing golf all day. You can still opt to participate in your chosen field if you are willing and able to do so. This may help to cushion the blow of the ‘retirement boom’ that is expected to happen over the next few decades as the baby boomers move into retirement age. There is a general fear about a large percentage of the U.S. population having to live off a much smaller percentage of the working population paying into the tax system. If fewer people opt to retire, but instead continue to to work, it can help alleviate this imbalance.

Education is likely to change as a result of free agency. High school and college education has been tuned over the years to produce cookie-cutter clones of The Organization Man. But now that model of employment is obsolete and so high school and college are likely to become more tailored to self-reliant forms of eduction that are better aligned with free agency. With one or more parents at home, home schooling will become a more attractive option. Also, since people will tend to need to keep their skills up-to-date to remain competitive, adult college education will continue to grow as more people become lifelong learners.

The book discusses many other important trends and makes other predictions regarding the future of home workspaces and the political influence of free agency. I found it to be a worthwhile and thought-provoking book and highly recommend it.

I’ve exchanged email with Dan Pink and he told me he’s got another book called The Adventures of Johnny Bunko: The Last Career Guide You’ll Ever Need that has just been released also focused on the future of careers with the unusual premise of being written in a Japanese comic style known as Manga. To get an idea of that book’s genesis, you can read a recent Wired article Dan wrote on the topic. I plan to pick up that book too to see what new insights Mr. Pink has to offer.

A Whole New Mind – book review

An associate recently gave a very strong recommendation for a book entitled, ‘A Whole New Mind’ by Daniel H. Pink. Whenever I have someone recommend a book in an enthusiastic manner, I immediately run out and get it. In this case, I found it at my local library. Since I’ll be returning it soon, I thought I’d do a short review so I’d better remember it and to share what I learned from it with readers who might enjoy the material covered in the book.

The book focuses on what will be necessary to have a valued skill set in the future. When I was growing up, the advice was usually to stay in school, get good grades, and then study a profession like medicine, law, or engineering. I chose engineering. But there are reasons to believe that this advice is outdated due to several phenomena that have occurred in the past few decades. The author uses the alliterative effect of the words ‘Abundance, Asia, and Automation,’ to help describe these phenomena. Abundance is the recognition that over the years, most material needs have been satisfied with the abundance of high quality consumer goods that are more affordable than ever before. To be successful in this market of abundance, products need to be distinguished from each other by virtue of their transcendental qualities, not just their features and price. The word ‘Asia’ is related to globalization and how any job that can be done cheaper in India or China will likely be done there in the future, so if you find yourself in one of those professions whose jobs seem to be exiting stage left, you’ll have to retool your career to find a way to make yourself useful in this new economy. ‘Automation’ refers to the skills that used to require the ability to concentrate on fine details for hours now being done in seconds by a computer. Again, if your major skill is something that can be done faster and cheaper with a computer, you’ll need to figure out how you can add value some other way in the future.

I graduated from college at a time where an engineering degree meant a lifetime of job security combined with above average pay, so these phenomena all sounded very familiar to me, since that is no longer the case in the U.S.. I’ve seen many jobs that had been done here in my lifetime disappear into Asia seemingly overnight. Automation is a subject I studied in college, and I have always had a fascination with it. I recall asking a professor what would happen to the manual laborers who were replaced by robots. He responded that I was an engineer and shouldn’t be asking that kind of question, a response which I found more amusing than enlightening. It turns out that I didn’t need to worry so much about robots taking manual labor jobs. They were taken by lower cost workers in other countries. Similarly, I am a beneficiary of the low cost, high volume products that are significantly less expensive today in inflation-adjusted dollars than they were when I was a child. But I am also a victim of it because the engineering on many of these consumer and durable goods is increasingly being done in Asia, which reduces demand for the engineering to be done here in the U.S..

Is there a silver lining in this cloudy job forecast? The answer is not to change careers to become a doctor or lawyer, since some of that work is already being off-shored and taken over by technology as well. One way to become more aligned with the times is to re-activate the right side of our minds. Much of the work involved in writing software and doing engineering analysis is left brained, but the things that really differentiate products are less about the technology and more about the artistic side of product development. I can attest to the fact that much of the work I did on the last several products I designed had much more to do with Industrial Design, that is, the design of the user interfaces, colors, shapes, and textures than it ever had in the early days of my career. Back then, we could just put a product in a rectangular enclosure and paint it the standard corporate color and sell it. In the more recent products, we developed at least a half dozen artist renderings, ran them through customer testing and only then did we choose the shape and colors. Then we came up with full scale 3D models and solicited feedback on those as well. The appearance of the product these days is as important as what it does. The hardest part was trying to figure out a way to make everything fit inside of the design that was eventually chosen. So I can agree that when it comes to product design, the aesthetics definitely matter more today than they did 20 years ago.

It’s these right-brained values that are becoming more important in differentiating products than just price points and feature sets. It may account for why Apple has made such headway in the computer business after nearly losing it all a decade ago. That company definitely marches to its own drummer from a design standpoint and they’ve carved out a very profitable and ever growing slice of the pie as a result.

The book goes on to talk about how the right and left lobes of the brain interact and is full of examples which help to drive the point home. It covers exercises to help better utilize both sides of your brain. The second half of the book goes on to explain a sequence of the six senses of the coming Conceptual Age, namely, Design, Story, Symphony, Empathy, Play, and Meaning. You will not find these terms in any old-school engineering texts.

In the case of my associate who recommended the book, it was a result of an educational product we’re advising a company about and we were trying to relate how the product could be used to improve test scores, yet this book questions the validity of test scores in relation to success in one’s chosen career. It’s true that they may help you select a career and perhaps get you into a better school, but there are many other ‘soft’ skills determined by the right brain that may be a bigger determinant of one’s career success than shear IQ points or aptitude test scores. These soft skills are not easily measured with standardized tests. Good test scores will still be necessary, but not necessarily sufficient, when it comes to demonstrating marketable skills in the future.

I found the book to be a fast and enjoyable read with lots of great pointers to other resources. I would highly recommend the book, particularly if you’re contemplating how you might spend the rest of your career after seeing jobs like yours disappear to other lower cost economies.

The Mathematics of MLMs

Every once in a while I get solicited by someone promoting a Multi-Level Marketing (MLM) scheme. This has gone on for as long as I can recall. You have probably already heard an MLM pitch where you recruit 5 members, they each recruit 5 members, and so on until you rise to the top of a pyramid structure and become financially independent. It’s sometimes referred to as Network Marketing.

The majority of these schemes often involve buying ‘lotions and potions’, which have near magical properties. Once you sign up, you agree to recruit others to do the same. The products have amazingly high markups compared to other similar products you can buy in a supermarket. They need these high margins because when you work your way through the math, half or more of their proceeds are gobbled up in payments to people at various levels in the pyramid. With an MLM, instead of eliminating the middle man, you’re adding about 4 or 5 levels of middle men.

Unfortunately, none of these MLM companies can deliver the promise of financial independence to more than about .4% of the people who participate in the scheme. In reality, the ratio is likely to be less. I’ve worked through an example below that will show you what’s wrong with this business model.

If you assume that financial independence for you means making 5 times a minimum wage of $6/hr, then you’d need $60,000 annually ($5,000/month) to achieve this. Many MLMs promise incomes much higher than this, but let’s be conservative and use this amount. Let’s see how big an organization you’d need to get to that income level in an MLM structure.

Assuming that your product requires each member in your downline to purchase $200 worth of product per month and you get an average of 10% of the money that flows up through your organization, you would need about 250 people in your organization for you to earn $5,000/month. This means that it would be about 5 levels deep and might look like this:

You + 5 + 25 + 125 + 95

For the sake of simplicity in building a 250-person organization, let’s just say your bottom level is still filling in and that’s why the bottom level has 95 people. If you got a 10% commission on all these people’s purchases, your monthly income would be $5,000/month. That sounds pretty good right? Well, here’s the rub. ALL of the 250 people in your organization are making little or no money, yet ALL of them were recruited so that they can get to where you are, that is, to financial independence. The people in the bottom level of the organization are spending $200 per month and making nothing. The 125 people in the level above them are spending $200 per month and are making less than $8 per month in commissions on average, so they are out $192 per month. The 25 people in the level above them each have an average of 9 people in their downlines and thus are making $180 in commissions and so they are losing $20 per month. The 5 people above them have an average of 49 people in their downlines and are making $980/month less the $200 they spend on products so they are clearing $780 per month. That’s not even equal to a $6/hr minimum wage job.

So, in order to achieve your financial independence, you’ve got an organization of 250 people and not a single one of them will be making more than the minimum wage. But ALL of them were recruited with the promise that financial independence was achievable. So in order to achieve YOUR financial goals, you have built an organization where fully 99.6% are unable to achieve THEIR financial goals.

You may say that all you need to do is to keep on building the organization and that will lift everyone up, right? That’s all well and good, but the ratio of people who are financially independent to those who are making little or no money DOES NOT CHANGE. There will always 99.6% working for minimum wage or losing money in an MLM. Do you really want to be part of a scheme that only permits 1 in 250 of its members to achieve the financial goals that everyone who has been recruited is expecting to attain?

What usually happens in these organizations is that the majority of people who are unable to meet their financial goals eventually get disillusioned and drop out and so everyone spends their time recruiting replacements. Few ever manage to rise very far, because the top people are already in place and the bottom members are getting replaced on a continual basis.

MLMs are a complete waste of time, money, and social capital. I was hoping that with the arrival of the Internet that these schemes would simply just go away as people were able to educate themselves about the other side of these “too good to be true” stories. It does seem to be helping expose these schemes for what they are. If you’d like to see a great website on the inherent flaws in the MLM business model, go to Jon Taylor’s MLM-TheTruth.com for an in-depth analysis of it as well as links to many other websites with similar supporting information. I found out about Jon Taylor’s work from an interview with Rob McNealy on his excellent podcast called Startup Story Radio.

I post this only for the purpose of helping people to wrap their minds around the mathematics of MLMs. I know that the majority of people recruited into MLMs are decent people who were recruited by other well-intentioned people who just repeated the sales pitch they were taught. But you can see from the math behind MLM pyramid schemes requires that for everyone who achieves financial independence, about 2% in their organization will make less than a minimum wage and the other 98% will lose money. I cannot imagine anyone feeling good about being a member of such an organization, especially if he is the one living off the other 99.6% of the people in his organization.

Giving the Gift of Light

I’ve been in an engineer for more than 25 years and have designed a lot of products during that time. So every time I get a new product, I look at it from a design engineer’s standpoint. Sometimes I am pleased to the point that I wish I could meet the engineers who designed the product just to get their story on all that went into designing it. Other times I think engineer must have been inexperienced, or possibly under pressure to meet a cost goal or time deadline.

When I ordered a Bogolight a few months ago, I didn’t know exactly what to expect. I was intrigued, yet a little skeptical, because I never had seen a similar business model for selling products. The letters BOGO stand for ‘Buy one, Give one’. The flashlight is sold in such a way that when you pay $25 for one light, you’re actually buying two of them, one for you and another for a charity. In this case, the Bogolights going to charity are heading for developing regions in Africa.

The Bogolight is the brainchild of Mark Bent, CEO and President of SunNight Solar who conceived of designing a solar rechargeable flashlight and selling it in a way that would get flashlights to go to a place where they are desperately needed yet without the resources to purchase them. Mark spent over twenty years in the developing world and understands their needs better than most. He realized that in most of the developing world, there is no reliable electricity and so any reading at night must be done by a kerosene lantern, which is expensive and very inefficient. Imagine if all of your night time reading or studying had to be illuminated with the dim light of a kerosene lantern. You’d have probably done a lot less of it. I know I would have.

The Bogolight provides reading light with high efficiency white LEDs powered by solar rechargeable batteries. The solar cells are built right into the flashlight. For every hour that it’s charged, it provides about 30 minutes of brilliant white light. With an 8 hour charge, it can provide sufficient illumination to last for an entire evening’s worth of reading. Best of all, you don’t need to continually replace batteries. It uses 3 readily available rechargeable AA batteries that are capable of more than 750 charge-discharge cycles. I’ve often found that rechargeable products have either built-in batteries or else they use custom-designed batteries that are dreadfully expensive to replace. So my hat is off to the Bogolight designers who chose to use standard rechargeable AA batteries.

The 6 LEDs have a life expectancy of about 100,000 hours of continuous use and the integrated solar panel is designed to last 20 years. When the average life expectancy of consumer electronics products seems to shrink every year, it’s refreshing to see something like this that is obviously ‘built to last’.

I really appreciate the rugged design, complete with moisture seals. Another pleasant surprise was the glow-in-the dark accent to makes it easy to locate in the dark. Its bright orange color makes it easy to find during the day too. It also has a built-in hook to hang it from overhead to make task lighting easier. The hook has a spring-loaded clip so you can attach it to a backpack and carry it around without fear of losing it. I am very impressed with the attention to detail that was obviously put into its design.

Now that I’ve had the chance to use it for several months, I can say with confidence that Mark Bent and the people at SunNight Solar are doing something truly wonderful and if you’re looking for a unique Christmas gift, you can rest assured that the recipient will find nothing else like it. Better yet, when you buy one, you’ll also have the satisfaction of knowing that someone in Africa will be getting a highly-valued and useful Christmas gift, and it’s hard to put a price on that.