Why Apple Fails in India (& Why it Matters)

This video is sponsored by Brilliant. The first 200 to use the link in the description
get 20% off the annual premium subscription. India is home to 1.3 billion people. In just five years, it’ll pass China and
become the most populous country on the planet. And, it shows. The streets are chaotic, markets, overcrowded,
and its economy, bursting with potential. While it’s still decades behind on basic
infrastructure like schools and sanitation, India’s GDP is among the fastest growing
in the world. Which, for companies, means 1.3 billion potential
customers, Many of whom are using the internet for the first time ever. Where Amazon, Google, and Uber struggle to
enter and compete with locals like Baidu and Alibaba in China, they’ve largely succeeded
in India. With one big exception: Apple is almost nowhere
to be found. The iPhone is an unstoppable, money-making
machine, more successful than Boeing’s 737, Toyota’s Corolla, and the entire Star Wars
franchise. And yet, here, it only commands about 1% of
the whole smartphone market. Just in the last year, its government threatened
to ban the iPhone over a disagreement about privacy, Apple reportedly lost three key Indian
executives, and it failed to get approval for an official retail store. It’s safe to say things aren’t going so
well. So, what makes India so different? And what does it mean for the future of Apple? This is the sales miracle known as the iPhone. Apple went from selling 1 million in 2007,
to 11 in 2008, All the way to a record-breaking 231 million in 2015. Turns out people like bigger phones. The trend couldn’t be more clear. But then, something changed. In the last three years, sales have been…
flat. And, if we look at all smartphones, you can
see Apple is no exception. What was 40, or 50, or even 60 percent growth,
has now become zero. Now, if “flat” means consistently selling
200 million premium devices year after year, well, that doesn’t sound so bad. The iPhone isn’t declining, it’s just…
not growing. But Apple, of course, is a public company,
and the stock market is based on the expectation of growth. It’s not enough to make an unbelievable
amount of money. It needs to make an unbelievable amount more
than last year. Which brings us, back to the basics: There are three ways Apple can sell an iPhone. Someone buying their first smartphone, Someone
switching from a competitor, or someone upgrading their current iPhone. The first two have been incredibly fruitful,
and are still responsible for millions of sales. But there are only so many humans on Earth,
And, at least for now, Apple is not in the business of making more. Which brings us to the third category: the
customers it already has. For the average person, two-year upgrades
are becoming three or four, or whenever this phone dies upgrades. Premium smartphone companies are in the business
of making better, longer-lasting devices that will entice more people to upgrade. But that also makes them less eager to upgrade
in the future. It’s a tough game to play. We’ve reached a point where most people
are mostly happy with what they have. In some ways, Apple is too successful for
its own good. Today, it may sell the same number of phones,
but more profit is being made, thanks to the higher prices of the X and XS. Plus, existing users are valuable in more
ways than one – we buy Apple music, iCloud storage, Apple Watch, AirPods, and soon, Apple
streaming video. So, this graph, the company argues, can only
say so much. That’s why it no longer publishes the number
of phones sold. Sure, sales may be flat, but the average selling
price is anything but. The last two years have proven people are
willing to pay eleven, twelve, fourteen hundred dollars. In other words, this strategy is working. But it can’t go up forever. Somewhere there’s a limit. And that’s why emerging markets are, if
not existential, at least very important for the future of the company. So, Apple, in need of customers, meet, India,
in need of phones. 63 thousand Indians are pulled out of extreme
poverty every day. And companies can hardly wait. Now, in terms of raw GDP, India ranks an impressive
sixth place, right behind the United Kingdom. But, adjusted per capita, it’s only $1,939
to China’s $8,827. Meanwhile, the cheaper iPhone XR starts at
$749. And that’s if you’re a lucky American. In India, the price is 77 thousand Rupees,
Or around eleven hundred dollars. And again, that’s the cheaper model. The XS, on the other hand, is upwards of $1,420. Here, Apple’s strategy of raising prices
is backfiring. An estimated 75% of smartphones are sold for
less than $250. And 95%, less than 500. For most people, the iPhone is simply too
expensive. Even the much older iPhone 6 and SE, are sold
at relatively high prices. For that kind of money, customers expect a
brand new phone, not a 3 or 5 year old one. Most Indians don’t even buy smart phones,
but basic, feature phones like the JioPhone, which is effectively free with a small, refundable
deposit. So, the iPhone is a tiny sliver of the premium
market, which is only a small segment of smartphone sales, which, account for less than half of
all phone sales. There’s just not that much pie left. Now, Apple has never purely been driven by
unit sales or market share. For the most part, it’s just not interested
in selling to all price points. But this market share is barely even noticeable. Unfortunately, price is only one part of the
problem. It also lacks brand recognition, Is affected
by a weaker currency, plus tariffs, And even for those that can afford it, the iPhone in
India just isn’t as good a product… It lacks Apple Pay, Apple Maps is, let’s
say limited, and Siri still has trouble understanding local accents. Some of Apple’s most undervalued assets
are its over 500 retail stores across 19 countries. It builds giant glass cubes, renovates historic
theaters, and practically defies the laws of physics. Not because it’s cool, well, not just because
it’s cool, but because they make insane amounts of money. No other company makes more money per square
foot of retail space. And if you have any doubt about that, I dare
you to walk through one without bumping into anyone. But, all this means nothing in India. Here, phones are sold in small, local shops
where brands have little to no control. Not the best conditions for a company which
regulates the height of its tables. And, at least for now, it legally can’t
open a store. The Indian government requires that any foreign-owned
company buy at least 30% of its materials within the country before opening a retail
store. In response, Apple has started manufacturing
the SE and 6S in India, which it may soon do for newer phones as well. In the meantime, Chinese brands like OnePlus,
Oppo, and Vivo, carefully target the Indian market by producing low-cost, locally-manufactured
devices. Ultimately, the reason Apple can’t compete
is simple: it’s not willing to adapt. The company has all the resources in the world,
but unless it makes a significant change in strategy, India will never be the next China. The iPhone accounts for over 60% of Apple’s
total revenue, to continue growth, it has no choice but to do what Apple does best – destroy
its own, thriving product with an entirely new category. Since reaching a one trillion dollar market
cap, Apple stock has been unusually shaky. Sometimes this is significant, sometimes it’s
normal, market fluctuations. And you can tell the difference by understanding
ideas like statistical variance, which you can learn with Brilliant. You don’t wanna panic and sell here, which
is why this knowledge pays off. That’s the power of topics like math, logic,
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also get 20% off the annual Premium subscription. Thanks to Brilliant for sponsoring this video,
and to you for listening.

Racist Fox Business Comments?

now they’re all on fox business network and they’re gonna have this incredibly goofy
segment where they’re gonna try to prove for the united states postal office is ridiculous and that was your privatizing and look at how wonderful fedex and u_p_s_
are doing i mean if you are mail package at all accosted twenty thirty bucks that’s
it well this week and pirates face postal service
they’re charging forty four cents to deliver your mail anywhere in the country it sounds like a terrible bar uh… but as in the they’re doing this in
the middle of uh… this nonsense well one does it take it over the top companies
jack berkman he says his son that’s gonna get actually another guys under the other guys get so let’s watch jack
broken first clip number two most of these guys working in the post office
should be driving cabs and i think we should start stop importing labor from nigeria in ethiopia that’s that’s about the skill
level they’re only in there because of massive union protection i mean with the success of
something like that act how could anybody where is the argument that we should have
a monopoly with this thing the whole rise you know planet that’s two countries he paper and cheery
and he feel good but there’s another little notice that first
former senator from new york al d’amato was on his own public in uh… and he said look his jack should stay
away from these racial analogies thursday and they did it said he should watch is like and i wasn’t blowing so that i was like i
was getting heated right but then he came back to it is another woman on the panel the
tomorrow hold which is an attorney and she’s gonna chime in on it anna d’amato’s going to go over the top there’s some good stuff plus one by i think that your uh… murderous jack
jack buddy jack no bike defended her fat me all these recess some are racist statements that nigeria
within a matter of course that was that let me just as crazy ascending of sources has nothing to do with
less than a city dot driving a taxi cab or not with us in a car and we are split and
so i don’t mind my looking out and that’s that’s most of the people employed by the
united states post office in my view and in the deal most economists or thoroughly unskilled
labor that is why i’ll edge they should be back a bump down to driving
cabs and we should stop importing labor contract national and international out you are in
this he’s a racist when you’ll be tried in vain ready that probably
just make my observation i have a right to do it quickly wrote a note the fact is ninety
one should not use hearing aids now wait a minute vice eric let me just tell yet at a bunch of bull shit on you should be ashamed
of yourself negev mouth washed out what the hell are you talking about we are
and we’re going to say that there are other important why an alien force shot up by the
cynthia races bullshit it’s one thing to say they’re hiring people who are in skills that take that you can save money that you
can run it better that he’s inefficient ineffective and i’d read all of those things but the owner
bringing his bullshit about or a bunch of nigerians its epic at satellite heart-rendering
panetta’s low-rise i cried all right around the allies to hurt the course of saying guess
what a combination of private public the unidentified leg llegaron nations good too much better
then what is being made on zero glass or jack we gotta go go ahead if you want to have the debate the reality
is that many of the american quote-unquote middle like postal workers are really unskilled labor who should have been pushed down for market
reasons but because of the union in government pressures we can afford labor at the bottom and we keep
these people here that’s a very interesting couple things that first of all if you don’t
live in new york might not on the senate senator straight that’s why those two there tomorrow a m and
al d’amato went crazy cuz he mentioned that your is an ethiopian they said he could be
due to be driving test in new york the cab drivers are that largely immigrants right a lot of having to be black but it’s an mainly
immigrants right whether there was a muslim or african or whatever it might be right so
he’s doing veiled language is very obvious and he’s basically saying that his lazy black
folks in the post office and and and their sucking the money out of
the system yeah i know the poor the middle class at the money out
of the system you want to try to privatize the post office so they make rilmani that’s
like tomatoes so maddie’s like you’re blowing this whole scheme got set up where do the sizable segment we were to push
the government privatize it so we can make money off of that
you coming here with your stupid races always shit fake he stood up for everybody and well i’m glad he call them out on that
i’m grad she called about it but i think actually maybe we drove me more craze in the racist
stuff into the language he uses that jack uh…
that these people viewed on skills they need to
be push down you’d be pushed out of this worst jobs but these unions came in and actually became
a decent wage it’s so sad we need to be pushing these people down by the way to the substance of their argument like this it uses post office is a great look we’ve all got and we’ve always
long lines right now we’ve been frustrated from time to time it’s not anywhere near perfect but they deliver
postage anywhere in the country they do in six days a week the do four forty four cents why what the u_s_ is part of the same way album and utilizing a lot of the ups and they at least
fourteen ninety nine who wants that these guys do presenting to make money off
of it that’s why it’s on the part was that work that’s almost the but its answers jag berkman screwed up expanded over the top because
he can help themselves it’d pushed out of nigerians of ethiopians did you get the worst drops by the way i’m a little further on this because
you know you watched restless admin in its just you wanna pull your hair up uh… if he if there was this plot nobody
would even pay tens is the kind of stuff itself box does that work all the time checkout code number twelve we got here problem we have a project you may not be able
to see the two thousand ten it’s estimated the post office is going to drop seven billion
dollars again in two thousand in latin but you know you point out that x a billion dollar profit in fedex and it’s
really not profiting u_p_s_ so what do you suggest we do we we just bum rap modify decision to send up to send
out mail delivery privately if i were present as they side with sees all
federal funding and or involvement and or pressure in north anything with the mail servers
there is no argument no good arguments for why the government should be behind some kind of federal monopoly internal service you know i the government out in the mail
service man on those it’s because it had trouble getting mailto all of their citizens and your private services it’s just they found
some groups all in backwardness for started unprofitable and that’s not the case if you would eliminate
the post service uh… what you would have is fedex and u_p_s_
and they would say i will take the most profitable routes and
i’ll dobre the most powerful packages their private business that make sense and if you live in the middle of montana well
good luck to you it doesn’t make sense for me to go out there or you want to deliver simple postcard or
whatever you want to put deliver twenty bucks thirty bucks forty ba paid us travel as a baby the government’s set it up so we could all
community the l_b_o_ is not hot after an accident billion object wall some u_p_s_ me who billy
there must be better than everybody now we deliver the mail to everybody forty
four cents people complain about you know i used to complain about it back in the day
now that i look at the options alike are you crazy colorado i love the post office in that sense
right and work the they make you take the opposite and because
these guys are still radical it’s not like i think the post office is like
some god send them whenever i walk in and i said to spend a lot of a halt my god thank
god for the post office but they do a service it make sense

Logitech c930e Webcam | In-Depth Review | #Logitech #Webcam

Hey, how you doing? This is George Price here at the Pendleton Gazette in Pendleton, Indiana. What we will be doing today is doing
today is a review on Logitech’s newest webcam. The c930e digitized webcam. Been wanting to do this review. for several weeks now. And just received the c930e, The biggest difference between this webcam and the previous model, the c920 they to include this privacy cap which put over lens in case you feel
you need to. but this is the c930e from Logitech and this is the predecessor, the c920. and we’re going go be doing some comparison and
talking about showing a differences ah the pros of the c930e or maybe
some things that aren’t quite so good. I think you’re going to be surprised. The thing about both webcams Logitech is pretty generous with the USB cable. Both have about six foot of USB
cable. makes them easy to put up on a tripod if you want to away from your computer, Ah, the the c930e is certified for high speed USB the c920, the predecessor webcam from Logitech is USB 2.0 although, I have used the c920 are on high speed USB without any issues whatsoever it
worked fine. Now think the biggest thing your
going to see when you look at these two webcams
compared, the c930e and the c920 from Logitech is the focal length. The c930e has a focal length on 90 degrees and the c920 is 78. So we’re or take a look at the first at the c930e and I’ve got theses two webcams about
three feet away from me in front of me and we’re gonna take a look
now at the c930e and you can see what kind-of area it gives you as far as space around the monitor in back now we’re gonna look at c920 and again, both of these webcams are about 3 feet away from me up in front of me and you can see how it narrows up. Now what’s going to help with the c930e is if you have several people you want to get in your are video or your Skype call or your conference it’s going to be easier to do that with the camera
closer to you which may help some on the audio. And we’ll get to the audio in a minute. but again it gives you a wider angle of
view then the c920. And again we’ll go back the the c920. The other thing I’ve noticed about
the c930e is that perhaps it looks like the color that the c930e picked up may be just a little bit
better then the c920. Now we have them here side by side and again you can
see the focal length difference and you can see the color difference or
what are I’m seeing is the monitor in back looks like perhaps its got just a little truer color then on the left the 930e than does the 920. Again all your in a box is the is 930e. That little cap. An instruction manual. If you want any
software, and you will need some you need to download that from Logitech’s website. Now I did two videos with the Logitech software. I did one with the c930e and one with the c920 and I used the audio directly from the webcams for these videos and I want
you take a look and listen to these. This is a test of the audio and video from the Logitech c930e. The newest webcam they have on the market. And I’m capturing it with the Logitech software. Again, I am using the audio directly out of the c930e. This is a test of the video and audio. This that you are listening to now is the video and audio from the Logitech previous webcam, the c920. And again, I am using the Logitech software to capture this video and audio. And again, this is the c920 the previous webcam from Logitech. Now what you’re looking here is it audio
waveform; the audio these two webcams produced. the first, the Logitech c930e and this is what the audio looked like from it. And now the audio from the Logitech c920. And actually they’re pretty comparable. Now personally I don’t think
the audio from either, direct audio from either one of these webcams is anything to cheer about. I don’t think you’ll want to use this audio on YouTube, for Skyping for conferencing
anything else. If you’re going to use these webcams find another audio source whether it be a headset or a microphone. But again I
don’t think that you’re gonna want to use the audio that comes out of these webcams for any kind of video or Skyping or conferencing that you do. I use these webcams on a weekly basis at the Pendleton Gazette. I use them for tech reviews on smartphones and tablets use them for a weekly YouTube show Rodney Conner and I do each Thursday, Tech Spot vCast the they’re probably the most widely used camera device in the world. One because they’re cheap they don’t cost very much they give you pretty good video quality and they’re powered by
USB small, portable and again a a widely used device. But again I don’t think I would use the the audio directly from either one of these cameras for any type of video I’m doing
and I certainly can’t recommend that for you. Again if you’re doing YouTube videos are you Skyping
with someone if you doing conferencing find some other kind of audio device to use with theses cameras. Now issue I ran into with the c930e when I was doing those videos
directly with the webcam software is that I couldn’t get it to full 1080p. I’m going to switch over here to the webcam software and going show you what I ran into. Now this is the software comes from Logitech. And this is the Logitech webcam 930e. And we’re going to do a quick capture. And I keep getting this box pop up to download a some drivers and I
want to Logitech’s website and downloaded the latest information they had. Again, this is the 930e and the highest resolution I could get was 720 with the 930e. when I switched over to the c920, the predecessor, then I could get fill 1080 with the previous webcam. I did some searching in some of the forums and there are some issues with that. So, that may be something that might
concern you. They say there’s a fix for that but it doesn’t sound like an easy fix. And perhaps Logitech is going to come up with some software here in a near
future that’s going resolve the issue. So that again one problem I ran into. When I pulled the camera, the c930e, into my camera mixing software then I had no issue with that. So, which camera would your buy? Would you buy the Logitech new c930e? or would you buy the predecessor, the c920? The pros for the to c930e you for me. I kinda really liked the video quality the picture quality you get with it. I think its a little better then the 920, the c920. I think the color is just a little better with the c930e then is the c920. The cons, it is more expensive. It’s going to cost you
more money to buy the c930e than over the c920 and is that worth the extra expense? Audio quality is no better on either camera so I have to give that a negative. I don’t think the audio is what perhaps it should be for
for these cameras. If there is another a negative the issue about not getting or be able to get full 1080p out of the c930e with the same software without some kind of major fix to some drivers in your computer. And I tried this on both a Windows 8.1 computer. A Windows 7 computer. And on neither computer could I get full 1080p out of the c930e. Now I put some links down below to the
full specifications for both webcams. And from Amazon for pricing information if you want it. and no, I’m not an affiliate for Amazon. Those links are for your information only if you want.
So if you have any questions about this, something I missed, something you’d like to know about put a comment down below and I’ll do
the best I can to answer them for you. So from me to you wherever you are hoping that you
have the best day ever for the Pendleton Gazette
here in Pendleton, Indiana this is George Price.

Pricing Design Work & Creativity

First Question Woah Yea Only question, actually (Laughter) No, you might have a follow up! W-What do you charge for a logo, and can you break it down for me? Like how you…charge…like…you know Yes Hourly? How many hours? W-What is your creative…director… What are they worth? What are their hourly rates? So a logo. How many people here design logos? Or…yup, okay. Alright! So we’ll ask the group, then. Logo. So the question is: How much? Hourly rates, how do you break it down, whatever. How much do you guys charge for a logo? Depends Ok, Depends. Anybody? How much do you charge for a logo? Just throw a number out. Fifteen hundred for a package. What’s in the package? A logo. What else? Colors. Colors Typography. I always include a brand strategy, even if they don’t think they need it That’s just built into it. And…supporting elements. Excellent! Like what are supporting elements? This is a really long list already. Go ahead, keep going. Uh, illustrations or icons, patterns… I see. The whole system! Anything that can support the brand, beyond the logo and the fonts. Perfect! Ok, great! Thank you for being so brave to say that! Anybody else want to throw a different number up? 500, perfect! Earth, right? Earth. Earth said 500. I like that! OK. and that’s for what? A logo? For just a logo, yea. Ok, perfect! Great! Anybody else? [Inaudible} Twenty thousand Oh! Gabrielle said twenty thousand! Nice! SOLD! (Laughter) Twenty thousand. Gabrielle, what do you do for a twenty thousand dollar logo? She’s basically saying: You give me twenty thousand dollars, I’ll design you a logo, you own it; It’s yours. Oh, ok! So she–Ok. But anything else? Do you do anything else, bes–Ok. Twenty thousand. That’s great! You’re looking at it! (Laughter) That’s her whole studio. Any other numbers to throw in here, you guys? Hah, that’s a pretty big jump! That’s 3x. Let’s look at it, guys. That’s 3x of that. My math’s pretty good. Fifteen hundred. What’s that to that? Now the math is not so good! (Laughter) Rosille! Rosille, a smart person, tell me what the math is on that. Is that just 20x? Huh? No it’s not 20x. 17, 15x? [inaudible] (Laughter) Alright, Ok, Ok! That’s the good “X.” It’s not 40. Your math is terrible. Good “X.” 13.Yea. It’s some weird number like that, but it’s good! That’s a good “X.” That’s great. Let’s talk about this. So, do you guys wanna know the answer to this? We can talk the whole night. Let’s do it! Alright, I’m gonna tell you. Just, will you relax? (Laughter) You know what? You got too much testosterone goin’ on dude! Ease it up with the weights, will ya? Alright, just relax. So here’s the thing. And, I did this talk recently, and I’ll draw a logo for you guys. It’s a pretty good logo. Ok What’s that logo worth? Billions. Because if I have a T-shirt, it’s worth nothing. Or it’s worth the materials that it costs to make it. I put that on there and kids will pay 20 bucks for it. It’s pretty weird. So that logo’s worth a lot, but the logo’s just a part of their brand. Right? So that illustration could’ve been something else. I’m pretty sure we’d pay the same amount. And you know that, because when Michael Jordan has his Jumpman shoe, it’s a different mark. And that now is worth a lot. Ok, so, why is it that some people can charge 1x for that, 10x for it, and 100x. What’s the difference between those companies? Why is that? Value to client That’s important. Ok? The value to the client. So, uh, this is one client. Let’s assume that’s a skirt. That’s a mom and pop business, so, that value to them is ‘meh.’ Ok? And on the opposite side of this is some kind of giant corporation. So somewhere between here, so… Everybody here presumably is talented enough to draw this logo, for sure. But depending on who you give it to, the price should change. So then now we’re not charging for time. We’re charging for value. Here’s one thing that you need to know, because I talked to some of the guys that worked over at, uh, Landor and Associates. They designed some of the worlds biggest brands. Fedex, Cincos, um, H&R Block. They get a million dollars a logo. Ok? Green square But it’s a good green square. What they have when the logo doesn’t work well is: They have risk. Ok? Uber had a backlash. People revert their logos, and they went through all this stuff, so, there’s a lot of risk involved. Ok? And then they have physical things that they need to put the logo on. It costs a lot of money. So are they going to hire some rinky-dink operation to create a logo for them… …when they have to spend hundreds of millions of dollars, to reprint the airplanes, all the brochures, everything that this thing touches? Forever. For a long, long time. That’s an expensive proposition. That’s why you would want to charge them a lot more. So you don’t go into it saying it’s the flat number. You price the client and not the job. What’s the value? Ok? A logo…When you guys say ROI: I don’t like that because this mark could’ve been anything and it would still be as valuable to them. So it doesn’t technically have a positive business impact but it could have a really negative business impact. If people hate it. If it looks a giant, phallic symbol. Which sometimes these things do, right? So that’s why its variable. Now, for me, um, I have this thing where I need to charge a certain amount of money for a project. Otherwise, I can’t be interested in it because if you look at this space it’s a big building. I gotta pay a lot of people. Electricity. It costs a lot of money just to be in business, so I know I can only manage so many jobs per month… …so just by virtue of what it costs for me to do business, my rates are going to begin much higher than yours. Ok, so, what do we charge here? You’re in frame! That’s Frank, you guys. (Laughter) Look good for the camera, dude. Ok. What do we charge? I think we charge anywhere between fifteen to thirty thousand dollars for the logo. We charge anywhere from twenty to fifty thousand to do the strategy before we draw the logo. Ok? We charge another ten to write messaging. And we charge another ten, or so, to do the applications, depends on what they ask for. The applications typically are three things. I say pick three. Right? So it’s gonna be a business card… I’m writing a little fast and sloppy here. I’m sorry. Is that straight, at least? Business card, what else do they want? Letterhead! Thanks, Matt. Letterhead…email blast. That should be its own thing, moving into the future, because that’s a lot of work. Huh? Brand guides is included in this. In this, yea. The usage guide is included in there. It’s a template we have. It’s pretty easy. We just knock it out. That’s what we charge to do a logo. But how do you break it down? Like for the logo, is it just like flat rate, or do you have like, account executives that go in and they charge their hours? No, no, no. I don’t do hourly. It’ll look something like this, ok? Line item number 3: Logo You’re gonna have three rounds. Ok? 18k. That’s it. The other ones I have more words to use, but the logo…I don’t know what else to use. Ok, so when you show that to your client, they don’t care? They don’t go: “How many hours did you put it?How many–?” No. Ok. What should you say when somebody says: “How many hours? I need to see the breakdown. The accountants need to know. How many hours of work? What are you gonna say? Well, we don’t charge hourly but…what’s a good response? Besides saying: “No, F-U.” What’s a good response? I’d ask them: “Does it matter many hours you put in–or we put in–or does it matter the value you’re gonna get out of it?” Well then, sometimes it can get pretty sophisticated and they’re like: “No, we wanna know.” Right? Right!? They don’t just say, like: “Ok, you win!” Does anybody else…have you had that conversation before? No, I haven’t. Ok I guess it’s that confidence of giving them their value again. Like if you’re gonna pay so much, you’re gonna get this many hours, or this amount of my effort. So I guess it’s that confidence of: “Ah, I’m just gonna charge you 18 because you know I have experience and we’re winning and we have whatever. You know, all this to back it up. Do you see what I’m saying? I get what you’re saying. So theres an issue of confidence. To be able to walk into the room and say: “That’s the number.That’s how I work. That’s our policy.” That’s how we work. So there’s this issue of confidence. Do you know Paul Rand? Famous Paul Rand. I think he charged like a million dollars for a logo. He’s like: “Sometimes it takes me two weeks. Sometimes it takes a year. I’ll know when I’m ready. I’ll see you in a little bit.” That’s how he did it! He’s not apologizing. Go ahead! I always liked the Paula Scher reference with the city logo, where she literally drew it on a cocktail napkin in that meeting where they were going over what they were looking for… …and they charged a certain price, and the client was skeptical and she’s like: “No, that’s it! That’s the logo right there! You just did it. It took you thirty seconds.” And she’s like: “Well it took an education that cost me 6 figures and 34 years of experience to draw that in 30 seconds.” Right, right. You’re not paying for time. You’re paying for— Picasso had a better version of that, but yes. That’s the same idea, right? It didn’t take me 10 seconds. It took me a lifetime to draw like this. Ok? So look guys. Here’s the thing: I like to argue. I like to debate. Ok? So I can debate this a number of different ways. So should you guys arg–Do you guys want it to be more interactive? Do you guys wanna argue with each other first? Or how do you want to do this? Or do you just want the answer and let’s go home? Wha–wha–what’s that–what’s the… [inaudible] (Laughter) You care about the slides huh? It’s like: “Ding!” Ok, I’ll just give you the answer. I can do anything you guys want. I can roleplay. We can juggle. We can do whatever you want, ok? Alright. Jung, give me a hypothetical hourly rate. It doesn’t have to be yours but give me an hourly rate. Hopefully divisible by eighteen, ok? What? 200, OK. 200 bucks an hour… Ok, 200 bucks an hour. Rosille, is that 90 hours? Somebody? Yeah? 200 bucks an hour times 90 hours. Ok, so, Jung, you be the client. I’ll be Jung. Ok? Take the mic. I will argue with you. Ok? Here’s tactic number 1. I don’t like this tactic but I’ll use it with you right now. Jung, are you ready? You’re the client, and I’m you. Ok, you ready? No, no. So you wanna know my hourly rate? So my hourly rate’s this times this. So I have a question for you, client. Why do you wanna know my hourly rate? I guess I wanna know where my eighteen thousand dollars is going. Ok, so does that mean if I work less hours, I should charge you less? Yea. So if I go over those hours, I should charge you more? Sure Really? Yea! Ok, so, you’re saying to me: You value this logo taking longer rather than shorter? So it means: If I just tell you it took me 4 months to work on it, you will now owe me thirty-six thousand dollars. If it’s in my budget and if I think you’re worth it. But i would also ask: Why would it take that long to make that logo? I wanna put a lot of effort into it. But I could hire somebody else that would charge me the same rate but be quicker. So you value time over money then? Sure, as a business person, yeah. So here’s the deal: I work really fast. I can come up with a logo, but I’m being punished for me being efficient and really good. Do you understand? The logic doesn’t work now. That’s the problem. So clients can’t have it both ways. They can’t say: “Tell me how many hours, but you can’t go over it.” I can’t put a cap on it. It has to have some symmetry to the logic. So if I work less, you want to pay me less. So then there’s a lot of analogies that you can draw now. Most business people value time. Remember at the beginning of our talk? Time is the most important thing I have. That’s it. So if I can do a logo for you right now and you love it in 5 minutes, are you saying it’s worth less than 18? Or is it worth more now? Because I saved you a lot of time. We can go to market right now. It’s worth more! So charging by the hour punishes me for being good. Now I’ll tell you what: You can hire four interns straight out of school. They’ll charge a couple hundred bucks total, and you’ll wait. And then you’ll say it’s not right, but you can’t articulate to them and they don’t know why. And you keep waiting and you keep revising and what aren’t you doing now? You’re not running your business, Jung. Shouldn’t you be focused on your business? So my job is this, Jung: I’m gonna give you an amazing logo that you’re not gonna have to change for a long time. A mark that you’re going to be proud of; That people are going to look at and clearly understand what it is that you do. That’s worth eighteen thousand dollars. Today. Come back to me in a year. It’ll be twenty-six. That’s what it’s worth today. That’s it. So you’re putting–Basically, you’re putting value to yourself. To what you’re worth as a designer. Well, I’m basing this price just on you, actually. If you were bigger, that number would just go up. No, but what I’m saying is that you’re trying to–You’re defending or arguing the value of eighteen thousand dollars by saying that what you’re going to do… …or your value of your work is worth eighteen thousand dollars because it’s so amazingly good; So much better. So, you’re trying to elevate– Did I say that? In a way, yeah. Ok. Then you said it and not me. Right, so, that’s what–As a client I’m thinking that– That’s what you’re thinking?! Yeah. So what did we just do here? So Frank Shih. When I sell him that I’m better and worth all this stuff, he’s not gonna believe me. I didn’t say any of those words, I think. We can replay the tape. I don’t believe I said any of those words, but Jung thinks that, because I’m confident and I’m presenting it like this. Right, it’s confidence, but you’re also comparing the two because you’re saying: “If we have three interns that will take forever–” So you’re building up the value. The value of not only the quality of your work, but also the–I guess–the efficiency of your work, as well. So you’re kinda putting a lot of values to what you’re doing. I think so. I think so. Just try this idea out for size: Symmetry of logic. If it works like this in design, does it work like this somewhere else in our life? Look for an example. So you’re gonna go on vacation, or you’re gonna go out for dinner, and you want the house to be spotless by the time you get back. What do you value there? That the job gets done by the time you’re back. That’s important to you. Now my friend, um, who owns his own design agency and he’s…you know… ..he’s a big deal. He said something like this. I don’t believe you can use this, but he uses it, because he can say it, ok? He says: “Do you like Nikes?” Do you like Nikes, Jung? Not really, no. Just play a-freaking-long! Ok, ok, I like Nikes! He doesn’t understand how these games work. Yeah, you like Nikes. They’re worth seven hundred dollars. Do you care how those shoes are made? Do you care that there’s some kid, who’s paid fifty cents, to work on that? Do you care? You just care that they’re Nikes. Right? That’s symmetry of logic, there. What you care about is the end product, that is a high quality product, and it lives up to your expectations. So he says that. So he tells them to F-off. He does. I’ve had lots of business conversations with him. He’s craaazy! …but he’s effective. Um, ok, so I’m going back to the drawing right over here where Nike is 1x, 10x, 100x… …value to the client from a mom and pop versus a large coorporation… Yes! …and the way I measure value is by, uh, increasing profit or reducing risk. Right? No, I didn’t mention profit. You’re just reducing risk. Just reducing risk, ok. Yes, and you could also look at it like this: How many thing will this logo touch? That you print? What is your printing budget? It’s 40 million dollars. Well, I’m not gonna charge you 2,000 dollars. You won’t get the job, by the way. If you under bid that project, they’ll be really scared. So you can ask them: “What’s your printing budget? How many things does this mark touch?” What happens when this goes wrong? So, in their mind they’re like: “Oh my god. You’re right.” So you can hire somebody for less money– So, you’re getting a ton of information before you even offer a service and price and you’re getting all the information and doing the math in your head… …of what the end product is gonna render them so you could see what kind of value it’s gonna have. I don’t do it in my head, I do it live with you. Sean, how many things are we gonna print this on? Bla bla bla bla. What’s your printing budget? Like, oh my gosh, what do think you should spend? I just try and get them to say it. You guys see the theme here? I just wanna do like a meta moment here, please. Meta moment is: I don’t wanna say it. I just wanna ask you questions until you say it. When you say it, you believe it. You guys understand that? ‘Cuz you’ll lose this fight every single time. I just ask lots of questions. Go ahead. So alright, now playing devil’s advocate–I’m sorry–This um, young lady– Amy Gooseman Amy! Ok, so I’m talking with you, I’ve already talked with Amy, I followed her on Instagram and I’m engaging with all her stuff… … and I see her engagement is doing well because she’s a really great graphic designer… Yea. …and so now I’m coming to you, and she quoted me fifteen hundred dollars… Right …and now I’m coming to you and you’re saying eighteen thousand dollars but I’m seeing–I’m trying to figure out because I know she does really great work. I mean what’s the difference, ‘cuz I feel that she does great work. She gets a lot of engagement. I’m tryna see how she would be a risker–that much of a riskier person to go with; To pay eighteen thousand dollars. Ok, um… I’m gonna ask you a few questions. Is the logo important to your business? Uh, yeah. Ok, it means something. So if it’s right: You can move on with your business. If it’s wrong: You have to redo this process again. Is that right? Correct. So I understand there’s some risk associated with picking the wrong vendor. What criteria would you use to determine if it’s a good vendor for you or not? Um, I guess proof. Proof? So what’s proof to you? Uh, case studies… Case studies. Does Amy have more case studies than us? Uh, no. Ok, what’s your next thign? Uh, what other criteria am I gauging– Yes. Um, that’s it! Just, I wanna know that what shes done before. Think about the risk. Ok. Think like a client. Don’t think like a designer, think like a client. How long have you been in business? How many referrals do you have? What’s your credit story like? I wanna see your office space. How many employees work for you? And for all those things, theoretically, I can beat Amy on. So you can take risk or not. Are you a gambler? So if you can’t– Huh? So for me–which I don’t have the credibility, obviously, that Blind does–so I wouldn’t be able to be in the same…in the same ballpark figure… …as like I can’t even think about anything close. No you can! Here’s the thing I’m gonna tell you guys right now: You could all do this right now. Everybody always thinks because I’m this person and I’ve done this and I have these awards… No, it doesn’t matter because the first day I started, I wanted to charge these rates anyways. I was already working like that. Ok? You just have to be able to say it out of your mouth because the first time I charged ten thousand dollars for strategy… …was the first time I charged ten thousand dollars for strategy. I didn’t do it for a hundred, and then two hundred, and two-fifty. I just went for it And when they paid I was like: “Huh, this is really good. I need to charge twenty thousand dollars for strategy!” And that’s how we keep getting these things up. And then I find out some other fools charge a million dollars. I’m like: “What is wrong with me? I could charge more for this!” That’s it. You just have to believe that this is what it’s worth. And it has to be relative to the risk to the company. I don’t care who you are. You can be Paul Rand, You can be anybody you want–He’s not alive anymore– Mom and pop comes to him, he’s gonna do it for a sandwich… …because that’s what it’s worth to them. Ok? Clients don’t choose the best option. They choose the least risky option. You need to appear as the least risky thing. So just ask them: “What criteria are you using to make your decision?” You should already know this. I know it… They run credit history checks. They wanna see your refferals. Ok? Social proof is really important. They wanna know that you’re an expert Well, you know what? I wrote the book, literally, on brand–There it is. I teach and consult people how to do this. I don’t say it like that. (Laughter) I’m much friendlier in person. Rossille, what do you wanna say? Should we be finding out–and how do you find out–what a company’s revenue is? You want me to do that? It’s really easy Is that important to you guys? To understand revenue of the company? You can make guesses, you can ask, but people are not likely to tell you that. Some designers make the mistake that they just wanna cut to the end and try and find out what the company’s worth. This is kind of a roundabout way that makes it a little bit more comfortable for the client to share and disclose financial information to me in small steps. I like to engage in conversation and to establish with the client that I’m a business person that understands business concepts. How do you find out about money? How do you find out about money? So you know when you–When I went to my financial adviser he’s like: “How much money do you guys make?” Woah! I– I mean we just met! Like, do I get a handshake first? What’s going on here? Ok? I have a round and about way of doing it. And you have to start to understand their business. Tell me how you generate–Rosille! You’re your client again. Pick a client that you know really well. You have to know their business quite well. Ok, so I wanna understand how you guys generate revenue. Ok? Because I believe those other designers are going to make you some really nice things, but I actually want to help you increase revenue. Is increasing revenue important to your company? Ofcourse. Some people say no, oddly enough. Some people say no. I don’t know why. Increasing revenue: So how do you generate revenue today? Do you have multiple skews? Do you have an e-commerce site? Like, how do you make money? Uh, we have an e-commerce site, and we sell out products and physician’s offices. Ok. E-commerce. Do you ever sell direct? Other ways? Or through sales reps? Hmm…Not at the moment, but we’re thinking of starting a– Give me a couple categories, please. Because if it’s just one, it’s kind of really fast. Ok, well E-commerce, I mean, direct to patients, yeah, through the– But through their e-commerce portal? No, no, no. In the offices. Like plastic surgery. Ok, so we would consider that more of a retail.. Retail, yeah. Ok, retail. Ok, what else? Right now, that’s–Well ok. Um, I guess you could say… Let’s say they have reps too. Yeah,reps. Ok, let’s say reps. Ok. Alright, perfect. And now I’m gonna ask you just to…to uh…do two things for me right now. One is: Just be who you are, playing the client. And also be the person looking at you and understanding how you feel. Can you do that? Say that again. Ok, to be aware of your emotions while you’re talking to me, ok? ‘Cuz later on I’m gonna ask you a few questions about that. So I have to tell you now ‘cuz otherwise you’ll be like: “Huh? I wasn’t paying attention to that.” So far, so good? Ok, so e-commerce, retail, and reps. Do you sell internationally, or is it all domestic? Um, internationally too. Ok, so you have international reps too? I believe so… Just play along. We’re not fact checking. Sure, Canada. International reps. Ok. Alright, what percentage of your overall revenue per year do each one of these represent, percentage wise? Ok great! You’re doing really well! Retail would be another 30? Ok, that’s not gonna make sense. Yea that’s why I did the number “2” but you stopped me from doing that. (Laughter) Yea do e-commerce at 45. Yea. You know these are just made up numbers? As long as it equals a hundred, we believe you. Retail at 25 and then just split the rest. Now you’re just being too granular with me, come on! Ok…twenty-five…that’s seventy. And then do reps at ten percent and international at twenty. Ok, ok. Now, that equals a hundred, right guys? Ok, now: What are your profit margins on each one of these things? It’s gonna come here. It’s gonna slip right in. You guys won’t even know it. So this represents forty-five percent of your revenue. Since you’re selling direct, your profit margins are gonna be very high here. There’s no middle man. If this costs a dollar to buy, the retailer bought it from you for fifty cents. So you have to make it for twenty-five cents in order for you yo survive. It’s called the double keystone. It doubles each time. Ok? At retail, it’s a dollar, at wholesale, it’s fifty cents, and manufacturing–that’s cost–at cost, it’s twenty-five cents. So you understand that? So when you have no middle man and you’re direct… This is why Apple has trillions of dollars in cash because they make it and they sell it directly to you. What do we know the e-commerce percentage to be? What do you think your profit margin is? So this is where everybody’s lack of business sense here is gonna hurt you in this kind of conversation. You do need to know some business fundamentals and we will talk about it, ok? Well, you think about a dollar and it costs you twenty-five cents to make it. What’s the highest this can be? No, it cannot be. You cannot make a hundred percent profit. Seventy-five! The highest it can be is seventy-five percent profit. Right? ‘Cuz it costs you twenty-five percent to make it. So it’s not gonna be seventy-five percent; There’s some other costs in there. Ok? So lets say it’s like, um, sixty-five percent profit. Ok? And we’re gonna talk about gross profit here. We’re not talking about net profit and I’ll get into that later. So this is 45% of your revenue, 65% gross profit. When you’re selling to retail, assuming that it’s in the store, what’s your profit margin gonna be like this? What? Somebody is doing their math! Twenty-five percent. Right! ‘Cuz you had to sell it for fifty cents, so the best that it can do is twenty-five percent. Ok? If you’re doing your job right, its 25%. And then the reps. The reps are what? A wholesaler. They sell to retail, so it’s going to be very similar. Ok? And international reps generally want even more money from you because you’re an unproven thing and they have to do all the marketing and all the hard work. It might be as low as 20%. Ok, Miss Client: What area of this seems to make the most sense to focus our efforts in terms of marketing/branding initiative. Where? Build me a website! Well, here. It’s obvious. It’s right here. Already, this is the biggest portion of your revenue, and you make the most profit in here. So you guys that build websites…almost always the answer is here. Sell direct. Now, most clients don’t have 45% of their revenue. It’s much lower than this… …’cuz they’re not good at building websites and it’s not where they’re set up. They started here. So this will be like 80% and this will be like 5. It’s usually opposite. Ok? Alright, so if we’re able to move the needle–we do really well, fast forward to the end of the year: How much percent increase can we go from 45? What do you think it is? How much can we hope to boost this up? Rosille? At least 20%. No, that’s too generous! Oh my god! No. Like 2, 3%. They’re not gonna say 25% ‘cuz that’s rediculous growth! Right? If we can do really well in this year we might get this up to 5% higher, up to 50%. So let’s say it’s 5% higher, ok? So we’re gonna increase 45 plus 5%. Alright let me clarify something right here. When I’m asking the client about how much impact the initiative will have on their company… … I’m really trying to ascertain what the real value of what it is that I’m doing. Not the value of the time that I put into it, but the net value of the result that clients are going to get. Now most designers tend to think about design or solutions in a qualitative way. Like it looks better, it’s more expensive, it’s more luxurious, it’s more premium. Those are qualitative things. But when I look at a quantitative thing in terms of we’re gonna raise percentage from 2% to 4%… …We’re gonna convert on 2 million dollars of business to 4 million dollars of business. So in essence, then, I’m establishing in the client’s mind that what we’re going to do is worth 2 million dollars. What is that to you in terms of revenue? Before profit? What is that to you? Oh, it’s 20 million dollars. Now I know. So I take that number times 20 and I know you are a 400 million dollar company. See how I figured that out? Now here’s the thing: I don’t have to do the fancy math… …because once I talk business to another business person, they feel comfortable talking to me about the numbers. “Oh, Chris, we do 8 million dollars a year and this numbers that! We don’t need to focus on that.” I’m like: “Great, that’s what I thought.” (Music) But the thing is: I helped them to realize in the process where they need to focus their energy. Ok so look at this, guys. If we increase business 5%, it’s gonna equal 20 million dollars in revenue, ok, at 65% gross margins. 65%…whatever that number is…it’s a lot of money. It’s at least 10 million. It’s probably something like 12 million, ok? So if we fix the website, you stand to gain a net profit of 12 million–Uh, gross profit–12 million dollars. Is that true, Miss Client? What kind of money should we spend in building this new amazing e-commerce platform? If you’re gonna make gross profit of 12 million dollars, what kind of money should we spend to build a better site? What’s it worth? Whatever it takes. Kinda, but throw out a number! Um…yeah, like 10% of that. 10%? 10%. So let’s spend 1.2 million dollars to build you a new website. Are you cool? I’m cool. Who here builds a website? Ok, I’m gonna call Sean. I’ll hire Sean for–What do you charge? Not that I know, but just throw something out! What would you charge me? “Sean I got a job. Big client. How much would you charge me?” Today right now, yeah, yeah! 6,000 bucks. I’m gonna pay Sean 6,000 dollars, he’s gonna be thrilled with that, and I will make the difference between these two. That’s all it is. Oh, I say…they’re gonna pay me 1.2 million dollars. I’m an entrepreneur. I’m gonna find somebody to make it. The best person I know. I’m gonna pay the full rate. No negotiation, I’m gonna pay you full rate. It’s a fool’s rate. (Laughter) And I make the difference. Gabriel. So, um, now I’m the client. How can you guarantee my 5% increase? I can’t. I did not guarantee you that. I just ask you a question. Well but I’m…I’m not… I can’t guarantee you that. …I’m not convinced that making the website will be up 5%. Well, what number would make you happy? What’s a realistic goal? Not an optimistic and not a pessimistic goal. So…but…but…what would you say if a client…a client’s never said that back to you? Did they ask that question in a meeting? How come we can guarantee this? I cannot guarantee results. So then, if that’s the risk thing again. If you want a guarantee I’m gonna charge you 3 million dollars. I’ll give you a guarantee. You will? I will! I’ll just…I triple the rate. I’ll give you a guarantee for 3 million. I can figure it out for 3 million dollars, I’m pretty sure. And then if it doesn’t go up 5% you’ll give the 3 million back? What? Wait. Hold on. There’s too much laughter on that side! What’s that? If it doesn’t go up by 5% you’ll give the 3 million back? Yeah! That’s what a guarantee is right? Yeah, I stand behind my work. And why do you think that it will? Because I’m good. ‘Cuz then I’m gonna hire Al Martinez to do the data analytics for me. I’m gonna hire 3 Seans. Gimme the best work you guys. Let’s study this thing. Let’s figure it out. We can tweak. You know….you guys don’t know this but I’m a Capricorn… …which means I believe in constant improvement. That’s what my therapist told me. Constantly improving all the time. A 5% increase over a certain period of time is very doable. So here’s what I’m gonna do: I’ll have my attorney draft up something. You have your attorney look at it. See if it passes mustard, whatever, and if it’s good, then we move forward. Here’s what I’m gonna say though: Let’s give it a realistic time table. If I hit half, I make half. ‘Cuz anything percentage over 0 is better. It’s money in your pocket, right? So if I gave you this offer today: If you give me 50 cents, I give you a dollar. Would you do that deal? Yes. What if I said: You give me 75 cents, I’ll give you a dollar. Would you do that deal? Of course you would! That’s a 25% return on your money! What are you getting in the bank right now, like .01%? A 25%…I asked this question in Las Vegas to a crowd…he’s like: “No. No. It depends.” I’m like: “It depends on what? If you’re crazy? If you’re still breathing?” Why wouldn’t you do that? All entrepreneurs believe in that. We put our money into the bank all the time to make a tiny little percentage. We hope the stock market gives us a 4, 5 , 6% return. If I tell you to spend 75 cents to make a dollar–which is 25% return, or whatever it is, that’s not the right math, but… …that’s valuable to you! I believe I can move this. I’ll pro-rate this! How’s that for a deal? Good deal. one of the most valuable things, I can tell you right now. You guys sell what you do. I sell what the world can do.

How Amazon’s Algorithm Gets You to Spend Money

If you’ve ever been online and if you haven’t
I don’t know what you’re doing watching this video. You know that many websites are
tracking and studying your behavior and in a way they help you by presenting products
and information that they think that they believe based upon your browsing history and
other characteristics are going to be of great interest to you. But there’s also a darker
side to that activity. While that may add great convenience to you the truth is that
that also permits them to look at questions like what do they estimate you’re willing
to pay for that product? Now a lot of people think mistakenly that you’re supposed to
charge the same price for a product to everybody. That’s not the case. You can’t discriminate
based on certain criteria – race, religion, sexual preference. But it’s perfectly fine
for me to charge this guy more than that guy because I think he’ll pay more and just
look at airplane tickets as a perfect example of that sort of thing. Now here’s the problem.
We’re taking those kinds of decisions in these websites. Amazon itself is a fantastic
example of this and we’re incorporating very sophisticated machine run algorithms
that are designed to manage the overall behavior of the group of people who are visiting that
website. In order to optimize profitability for the
companies that are running those websites. And they will cut you the least slice of pie,
small slice of pie that they can to get you to send you to do what they want you to do
in order to maximize the profits of the corporation. Now you may have been on Amazon and you may
put things in – I use what’s called a save for later or something in your cart.
And you come back the next day and good news, you know, this book is three cents less or
that’s two cents more or this is a dollar more. But there aren’t people doing that.
This is a machine learning algorithm. And what it’s doing is analyzing time of day
and the characteristics of what you bought in the past and how you’ve respond to different
kinds of incentives. And where you came from and what kind of browser you’re using as
a major factor. Anything it can in order to adjust the price to just the point where you’re
going to buy at the highest possible price. You as an individual have freedom of choice.
It’s a free country. Buy it. You cannot buy it. That’s great. But we as a group
as a set of customers purchasing from Amazon or some other site we adhere to certain statistical
properties. So as a group we don’t have that freedom because it can be managed by
the entity on the other side. Whenever there’s an information asymmetry like that they know
what you’re likely to buy by what your characteristics are and they can optimize the yield on site
based upon that. They’re at an advantage over you. Amazon is a wonderful company but
it is basically one giant machine learning algorithm. It is designed to do what’s called
arbitrage. It knows what it can buy things for. It knows what it can sell things for.
And it can adjust the profitability in that zone in order to maximize sales, in order
to maximize profits. And it can do so in a way that is far more
efficient than has ever been possible in retailing before. So when I think of Amazon the fact
that they’re selling goods is incidental. I think of it like a stock trading programs.
Buy low, sell high. Buy here, sell there. There’s a spread. These really are arbitrage
systems and you are the mechanism by which these companies maximize their profits.

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The Cost of Crimea – The Price Russia Paid For Conquest

Russia: a country well versed in the game
of geopolitics. Despite having an economy just slightly larger
than Australia’s, Russia is a giant on the world stage and arguably its biggest move
in the 21st century was its annexation of Crimea. But this video is not about geopolitics; no,
today we’re gonna learn the true cost of Russia’s expansionism and trust me, it’s
a lot more than you think. This video is brought to you by Audible. Get a 30-day free trial by registering with
the link in the description. Early 2014 marked an end of an era and a rude
awakening for Europe and the Western World. Vladimir Putin did what was considered unthinkable:
he initiated a military campaign of expansion against Ukraine. In the span of just one month, Russia annexed
Crimea and instigated a war in Eastern Ukraine that continues to this day. And while we often hear that the West responded
with sanctions, it’s not easy to determine what the true cost of Russia’s aggression
really is. To understand what Russia paid we have to
understand how Russia works. A big chunk of the Russian economy relies
on oil: about 7% of the country’s GDP comes from the extraction of oil and while that
might not sound like a lot, consider this. These 7% account for over half of the federal
budget of Russia; in other words, the price of oil has a very direct impact on whether
Putin’s finances add up at the end of the year. Now, when Russia began its Ukrainian intervention
in February 2014 the price of oil was about $100 per barrel and it had been hovering around
that area for some time. However, from August onwards there was a dramatic
crash in the price of oil; in the span of just six months oil dropped from $100 per
barrel to just $50. Of course, the global oil market is a very
complex beast, but in this particular case it’s actually pretty easy to find the culprit:
the good old USA. From 2010 onwards America began rapidly expanding
its oil production, notably thanks to fracking in North Dakota and Texas. Now, usually when there’s a sudden increase
in oil production the other big players in the market like Saudi Arabia or Iraq get together
and agree on production cuts to balance things out and to keep the prices stable. But in 2014 that didn’t happen. Saudi Arabia and friends, collectively known
as OPEC, just stood by and watched and America was certainly very appreciative of their restraint. The price of oil has pretty much stayed put
at $50 ever since and as you can imagine that’s had a pretty big impact on Russia. Half a decade later and only now is the Russian
economy starting to climb back to its pre-expansionist heights. Over the past five years estimates say that
Russia lost 4% of its GDP due to the price of oil. In the meantime, the sanctions of the West
have also bitten deep into the Russian economy. Foreign investment practically dried up overnight
in 2014 and it is still very far from recovering. The combined effect of the sanctions chopped
off another 6% of Russia’s GDP, so it’s fair to say that Russia effectively sacrificed
10% of its economic output to take Crimea. Here’s the thing though: the Crimean peninsula
is not exactly the pinnacle of economic development. It is a very strategically important location,
no doubt, but its people aren’t really flush with cash. In fact, when Crimea was annexed into the
Russian Federation in March 2014 it was the poorest region in the entire country per capita. To bring the new region up to the same level
required massive investment to the tune of $2 billion per year. Since 2014 these direct subsidies have actually
done wonders for the region: a $4 billion bridge now connects Crimea to mainland Russia,
and the peninsula has a renovated airport, two new power plants and an increased military
presence which of course boosts the local economy. While Russia in general continues to suffer
from Putin’s expansionist policies, at least the Crimeans are actually having it good. Now, if you’re wondering what Putin’s
next moves are and how he even got here in the first place, you’re probably gonna enjoy
listening to The New Tzar on Audible. The Rise and Reign of Vladimir Putin is a
fascinating biography and you can listen to it for free right now if you register for
a free trial of Audible by visiting audible.com/businesscasual or by texting “businesscasual” to 500500. I hope you enjoyed this video and I’d like
to thank you for watching it. If you wanna see teasers for my future videos
you should follow me on Instagram. You can expect my next video in two weeks,
and until then: stay smart.

How to Start & Run a Design Business: Pricing & Estimating Creative Design Jobs

Hey everybody. Welcome to The Process. On this episode of Ask Me Anything we’re going
to be talking to Frank Shi he’s got a lot of business questions I think
you’re going to be interested in hearing and answers that we’ve got. So stick around. Let me try this again. I want you guys to listen to me– Yeah. I design sandwiches. My name is Jose Caballer
and I talk about the business of design. hahahaha I talk about a lot of stuff. My name is Chris Do
and I talk about the business of design. At the center of this operating system it’s
about underst– [Cough cough] Jose, can we just tell em what the show title
is? I hate you dude. You are watching, The Process. Hahahaha, nice. Alright So let’s give everybody a little context
about for what you are doing Frank. Talk to me. Frank: Um, so I’ve been given this unique
opportunity to have a partnership with a Chinese production company
and they have a lot of clients under their belt that’s looking for
high quality studio production. Chris: Mhmm Frank: …and my partner has come to me because
a lot of international brands are using China as their main point of sales and their wanting
to kinda keep that production domestic. Chris: And what’s your background? Frank: My background is, I graduated from
Otis College of Art and Design and the folks in digital media. Chris: When did you graduate? Chris: Two years ago. So thats 2013? Alright cool. So just two years barely. Interesting. Summers almost over. Alright, so let’s get right into the questions
and let’s see how we do. This is kinda unrehearsed so let’s roll. What do you got? Frank: Uh so first questions what are some
common business mistakes as entrepreneurs make in the creative field? Chris: Hm, common business mistakes. Ok now I gotta think back to my past here. Um, some things I got right some things I
got wrong. So let’s start there. First is, you need to get paid upfront. A lot of designers do work and don’t collect
any money. And there’s a lot of people out in the work
that want your creative services, want you to design them a logo, build you something,
but you need to get paid first. That’s how you know the job is real, cause
otherwise it’s just all talk and I think as creative people we get really flattered when
people show interest in us and they wanna talk to us about a commercial or some kind
of branding film, and then you get real excited. Frank: Right, right, right. Chris: So let’s contain the excitement and
turn it into something that’s very real. So what I would do is, uhh, put together a
proposal or talk about a budget and get that 50% upfront. That’s when you know it’s real. You need to get the 50% upfront. So, get paid upfront, ok? And then about 3/4 of the way through the
job get paid another 25%. And when you deliver the project you can either
ask to get paid on delivery which is not realistic sometimes but you can get paid the remaining
25% net 30. Meaning in thirty days they have to pay in
full or they pay interest. And that way really what you’re risking is
that 25% which should be your profit margin. So if you do it like that you should be ok. Cause the last thing you need is to especially
book a big project and for them to bankrupt and now you’re stuck holding the bill. And this has happened to a lot of designers
out that own studios and run companies. Ok? So get paid upfront. Umm. If you’re in a partnership, which you mentioned,
now we’re just talking about the partnership not so much with the clients, is you gotta
start thinking about, unfortunately, the exit scenario. We all go in with all the hope and optimism which
is really great but we have to think about how are we gonna separate. If you can bring the conflict up front and
have that conversation out in the open, you can sleep at night not worrying if this is
ever–how it’s going to play out when it falls apart. Cause eventually partnerships do fall apart. Nothing is forever. So you have to start thinking about that. And you need to learn how to bid. So I believe you told me before that you’re
a creative and you’re partner’s a creative. Somebody needs to know how to bid. And so do you know how to bid? Frank: Yeah, I’m learning the process of how
to bid slowly, umm. That’s some of the questions I have for you
also how to bid. He’s more of an EP. Creatively he doesn’t really have much control. He’s more about like the business and the
bidding. So he’s helping me kind of sell like our services
and what–build that relationship between Chinese clients and me because of course their
value on well what we do is a little different um compared to here. Chris: Ok, so executive producer when you
say EP, some people in our audience may not know what that means, excuse me. Stands for executive producer there are a
couple different types of executive producers. The one type is in charge of new business,
business development, sales. They really just go out and hustle and meet
with clients, potential clients and try and sell the services of the company. They typically do not sit down and break out
the excel spreadsheet and work on the bids. That’s a different kinda mentality. This person is usually very outgoing, very
short attention span, really is gregarious, extrovert, and isn’t always the best on details. And you need that kind of person. Cause that person’s–guy or gal who’s gonna
go out there and get you business. The other kind of executive producer is one
who runs your company for you. In some instances they’re referred to as Head
of Production. They do the bidding, they do the calls, they
set things up, and they close the job. Closing the job requires very specific set
of skills that we may or may not have time to talk about. So, that’s a different kind of person. So sometimes you have a person that does both,
so they’re going to be a little bit weaker or stronger one than the other. And you have to kind of think about that. So, that leads me to the next thing about
common mistakes is, sales is everything, sales and marketing. With robust sales and big budget projects,
you can fund any kind of company and you can run it the way you want. Without those sales, without that cash flow
coming in, you’re going to start to suffer severely. Okay? The other thing I wanna talk about is, there’s
two ways to make money. There’s one way to make money which is to
bid high and produce it um–to build yourself a cushion of profit. The other way to make money is to spend less
money to produce the project. And so you kind of have to think about that. Sometimes people focus all on getting higher
revenue, grossing revenue and they’re not thinking about how to spend that money. So if you get a million dollar job but you
spend $999,999 it’s really a $1 job. And so we get caught up in the idea that it’s
a $1mil job, when really it’s a $1 job. Conversely, you can do a $100,000 job and
only spend $50k and have a gross profit of $50,000. Now if you ask somebody, would you rather
get the million dollar job or would you take the hundred thousand dollar job. Most people don’t think about it and they
say “I want the million dollar job”. It’s really at the end of the day what you’re
able to keep after all expenses are paid. Including paying yourself and your partner
and seeing what else there is in the profit margin. Alright? Umm, let’s see what else I got here. So we talked about bringing the conflict up
front in negotiations. I would do that with my clients as well. So often times I think we sit around and think
the client has all the power. And they have a lot of power, but they don’t
have all the power. They have as much power as you’re willing
to give to them. So if you’re concerned about certain things
like the schedule, the budget, maybe they’re asking for something that would be fairly
tricky to do, given the budget, you need to address those upfront. And that way we can act like adults and professionals
and run a real business and talk about these things verses dealing with it after the fact
and kind of griping about it later. There’s a really great line in here from The
Win Without Pitching Manifesto, get a shot of that, by Blair Enns. He talks about this. He says you know a lot of times we underbid
projects. We underbid projects and later on we regret
doing that so he says in the book, think about the client when they call. Are you anxious to pick up the phone? Or are you grimacing and trying to avoid that
call? And often times it is directly related to
the budget. So a client that’s asking for lots of revisions
and needs a lot of hand holding and customer service and you’re feeling bad about that
relationship is because you’ve charged too little. But if a client’s gonna pay me a million dollars
you can call me as much as you want and you can bug me as much as you want cause I’ll
take care of it. Cause it’s worth the trouble. Usually what happens is the lower paying clients
tend to pay less and are harder to deal with. That is the tricky part. Ok? Alright so let’s go. What other questions do you have? Frank: Um, so. The second one was how to effectively communicate
your business ideas to partners and we say “be more specific”. I thought about it from what you just was
saying–talking about. How do I negotiate like fair terms between
like, um, ok let’s can we rewind? I feel like– Chris: Yeah fine. It’s your question man. Frank: Ok, so, how do you sell your company
or your service without much experience to show? Chris: Ok, you’re going to sell your company
mostly on your confidence. Believe it or not. You can have a gigantic body of work that’s
won every reward but if you don’t go in there representing yourself well, in terms of like,
“I know what I’m doing. I can take care of this.” Then it won’t matter at all. So there are a lot of people out there–think
about this if you are an executive producer or you’re a sales rep a sales agent, you don’t
do the work. You didn’t do any of it. But what you do is you’re managing the relationship
between the client and the person who can get it done. You as the head of the company aren’t that
much different. You know, I don’t know if a lot of our clients
are out there thinking that I’m the guy who’s working on the box. I opened up After Effects the other day and
I was a little rusty. I haven’t opened it up in a while. It’s coming back to me but that’s not what
I sell myself on. What I’m selling is I’m a problem solver. I’m a business designer. Come to me with your problems, I’ll help to
solve them in a way that makes sense for the parameters of what you’re trying to achieve. So that’s what I’m selling. I’m selling confidence and assurance. Assurance not insurance. Assurance, I’m going to assure you that the
job is going to get done and based on my experience and my confidence the client’s going to make
a decision if I can do it or not. So you actually don’t need any work. Believe it or not. Because later on if I walk away from this
company and for whatever reason I sell all the assets to the company including the portfolio,
I’ll still be able to go out there and get work. Cause I’m selling who I am and what I can
do. Not the work. Okay? So, number one mistake there is to sell the
portfolio. Number two mistake is sell the process. I think you should sell the people. Frank: Sell the people? Chris: Yeah, sell the people. The people are the ones who are going to make
this work. Ok? Alright what’s your next question man? Frank: Um, how do you effective–efficiently
excuse me brand what we do and who we are? Chris: How do you what? Frank: Effectively like, um so we can also
look into the kit with The Skool and there was a mission statement and I was having a
really hard time writing one. Chris: Writing one? Yeah, they’re really hard to write. Frank: Yeah because you have to kind of like–I
was looking at the Jose’s and he talks about it and his mission statement. I was like “Wow, this is really kind of broad– Chris: Pretty broad. Frank: Yeah but it’s hard for me cause I know
who we are as a team and what we wanna do but how do we communicate that and how do
we put that in a sentence or effectively get the client to look at it and be like “Oh I
get what you guys do”. Chris: Ok. One way to look at writing your mission statement
is to think about your value. What value do you provide to your customers? What do you really do for them? It’s not really about you. Okay? So I know that writing a mission statement
is very difficult and if you go through the exercises in The Core 1.7 kit it’ll help break
that problem down to much smaller kinda bit size piece. But it’s really not about you. Think about the value you provide. What value do you provide to your customers? So the one way to do this is to profile your
customers to figure out who are they, are they ad agencies, are they entrepreneurs,
are they startups, who are they, in China, and who’s gonna need your services and what
problem are they facing what challenges what pain points do they have? Think about their job and think about their
pain points and think about which one of those pain points you can solve and start thinking
about how to communicate who you are, based on that. K? Frank: Um, ok. This is close to some of the budgeting stuff
questions like that so. Chris: Sure, like money stuff? Frank: Like money stuff. It’s like an awkward topic for a lot of people. How do you budget for unexpected things that
goes wrong in a project? So other than label costs, overhead, stuff
like that, how do you budget–how do you bid for a project, ok this might be a mistake
or someone might screw up this and that. Chris: It’s a mistake that is caused by you
and not by the client? Frank: Yeah so unexpected–say you hire someone
who’s like a effects artist who’s like super expensive but he’s like one of those dudes
who just puts stuff on a reel and doesn’t really have any, you know. You kind of like, “Ohhh, my God. This is really expensive but you didn’t really
do anything.” And how do you budget for that and how do
you deal with that? Chris: You talking about our last job? Frank: No. Chris: Ok, hahaha. Ok hiring uh “experts” that don’t deliver. It’s a big problem especially in effects. The effects world is fraught with challenges
because you come in under budget and often times the scope of the work is, well we don’t
like it so you have to just keep working on it. And so you can easily drive your company into
the ground so you have to be very careful about how you bid. There are only a handful successful visual
effects companies out there that are still doing what they do today. And why is that? Because they’re under bidding projects and
they having hard time managing very expensive artists. Ok so let’s first look at who you are. Let’s look at your company and your infrastructure. Something I’ve learned is that where relatively
small company. We don’t have dedicated departments or teams
of specialist who can do a particular job. So larger visual effects companies they have
a whole department that just does modeling or does lighting, like there’s a lighting
TD and there are technical directors who just optimize the code for rendering. So when the models and all the lights you
put in it can’t render and it can’t render it under four hours a frame, which is unacceptable,
they have a guy go in and or a gal, and the code and they optimize the scene and then
all of a sudden it can render in 10 minutes. You don’t have that. So what happens is you have people that come
from that world who are moving on. Either they quit or they were laid off and
they’re used to working with a pipeline and a technical director and all these kinds of
people and then they come in and they can’t produce. It’s not that they’re not capable of doing
it or they’re misrepresenting the work it’s just they need a certain infrastructure. So more specifically like houdini guys need
a whole team, generally speaking. I know I’m making a broad accusations here
but they need a big team to make it work because it’s a very computationally intensive thing
that they’re doing. Lot’s of processing power. So that’s one thing. What I’ve learned is, I would be very upfront
and this is gonna be a theme in business here, whether you’re gonna be dealing with your
partner or a client or a vendor or artist, is to be very upfront. Say ya know what, we’re a team of six people,
we need more generalists to work on the project so if you have a problem I need you to fix it. Can you do that? And here’s what we got. And they say yes and you’re still not sure,
I’d just be very upfront. I’m willing to try you for X number of days,
and if it doesn’t seem like you’re gonna hit it I need to be able to move on. You need to know that upfront. Are you ok with that? If you have a–you’re booking with Weta,
I advise you to take that. Because this is not that stable. Just be very upfront. That way people can’t get mad at you cause
you were hiding something. And I think on the other side, if I was a
vendor I would appreciate that kind of level of honesty and directness versus somebody
who’s like, “Oh we’ll book you” and then unbook you and I missed out on an opportunity or I
canceled a vacation with my wife or girlfriend. That would be horrible, right? So, the thing that you also need to know is
if you’re a business owner is, cut your losses quick. You bring somebody in you say, “You know
what I’m give this x number of days.” And you stick to it and you talk to them,
“We’re not hitting it, the benchmarks. We’re not doing it. I’m gonna give you two more days to kinda
figure this thing out. Do you feel confident about that?” And, one thing that I’ve learned is you need
to give them space to say, “No I can’t do this.” I think especially for guys cause you know
if effects world there’s generally it’s very male dominated, there’s an ego issue and a
pride issue. I don’t wanna say I can’t do something. And so if you say, “Can you do it” of course
I’m gonna say, “Yes I’m gonna do it. So you gotta give me an out. Say, “Look, I can see that we’re all stressed
out here and”–put it on yourself to say that, “you know what, this job’s harder than
I thought and our pipeline isn’t there.” Or whatever reason there is tell them that,
“so if there’s a chance you don’t think you can deliver I would rather shake hands
with you and part ways and look at you for something else as opposed to us kind of burning
this together and maybe moving in a direction where we can’t recover from this.” Be very upfront and be that transparent and
you don’t have to be a jerk about it. Frank: And, another one talk moneywise– Chris: Talk money as much as you want. Frank: So like if an artist cost like $1,000
a day and they’re like– Chris: Don’t hire them. Frank: –like example, top of the crop like
and you have them say booked for 5 days. How do you put like a margin on their mistakes
if they do screw up? Chris: Ok, you should not be–ok so, this
is actually to the heart of your question cause I see now what you’re saying. How do you bid a job and cover for unexpected
delays or missteps? Now when we get to bidding cause I had asked
you before, do you know how to bid, and you said your EP knows how to bid. So I just shelved that whole topic all together. But I’m just gonna give you a broad overview
ok cause this is something I learned early on. So let me tell the people how you’re supposed
to bid and if you guys want to know more just comment below and we can do a deeper dive
into that and do it with fancy shmancy graphics ok? So how do you bid? Here’s how you don’t bid, you calculate your
time and you do an hourly rate and you guesstimate uh–so let’s just give me a reasonable hourly
rate that somebody starting out might charge. What do you think? Frank: $50. Chris: Ok $50/hr so that’s, 8 hour day–let’s
say for 10 hour day that’s $500 cause those numbers are more round ok? So you’re gonna charge $500 day so you guesstimate
that it’s gonna take you 10 days. Keeping number really round. So that’s gonna be $5,000. So you submit that. So $5,000 is the number you submit to the
job and they say, “Ok go ahead and do it.” What’s the problem with that model? Well that’s not a business. There’s not profit and there’s no room for
error. Ok? The way you look at it as a business person
as an entrepreneur is, how much would you have to pay someone else to do that job and
that’s how you bid it, and you have to pay yourself. Ok so there’s things that we’re missing in
here. Alright let’s go to the board here. Can I? Alright so, here we go. So you have an artist and they’re $500 right,
a day. That’s pretty typical of a person who knows
what they’re doing, ok? It can go much higher it can go a little bit
lower, but that’s about it. So you look at it as that times–so there’s
a rate there, times 10 days. So your spreadsheet would look something like
that right? The name of the artist times the number of
days. So this is days and this is rate and this
is the tile or job description, ok? And so then you would have a subtotal here. And what’s the math on that Frank? Frank: $5,000. Chris: $5,000 ok so far so good everybody
is following me, right? Ok so $5,000. Like I say, if you submit the bid for $5,000
you’ve done yourself a disservice. Ok, so who’s managing that artist? And what if that artist takes longer than
10 days? Now you’re paying for the job. So the first thing you’re gonna need to do
is you need to mark this thing up, ok? So you can mark it up to–what rate do you
think you can mark it up to? Frank: I’ll say $600. Chris: Alright $750, I like that number. So you’re gonna mark it up to $750, ok? Because artists always underestimate what
it’s gonna take to do the job. So so far if you do it $750, the new number
would be $7,500. So if all goes well, which it never does in
visual effects, you’ll have made an extra $2,500. You can send 10% of that to me. Everybody that’s watching that if you make
that money send 10% to me, alright? I’ll do a PayPal thing and we’re all good. Is everybody good? Ok, I don’t work for free. Frank: We’re good, hahaha. Chris: I got two kids to raise and they go
to private school so we’re gonna do this the right way. Alright, so now who manages this person? You have a producer coordinator, ok so you
have a producer. Ok what are they a day? Let’s say $400, ok? And so they’re gonna run that project for
the duration of it which is another 10 days. Ok so now you’re gonna come out at $4,000. Ok that’s a number that you didn’t put in
there. Now whether or not you hire a producer and
pay that amount isn’t relevant. It needs to be in there because somebody has
to manage the project. So again, if you wind up producing the project
yourself that means you’ve made another $4,000 on top of the $2,500 so so far we’re up $6,500. So initially you were talking about having
an artist at $500/day for 10 days. So by the math that would be $5,000 but the
problem is if you run into a problem if things are delayed or you underestimate the job,
you are now gonna go into the red. So you cannot pay the person and you cannot
charge the same amount as you’re gonna pay the person. It doesn’t make any sense. So there’s two areas in which you can do this,
one you change the rate and you can also change the number of days. But I like just working on the rate. Ok because perhaps is a hard deadline and
in 10 days this thing is due, so you can’t just put more days in there. Ok there is a way around that too. So the difference there just by doing this
is a potential profit of $2,500. The difference being from $5,000 to $7,500. Now you’re going to need to add in a producer. Cause somebody’s gotta run the job. Somebody’s gotta look at the assets and manage
the team. Ok so the team is one person that’s fine I’ll
just put in their rate of $400/day. In Asia you’re gonna pay a lot less than that
so let’s assume that’s ok. So at 10 days that $4,000 now, ok. So, who’s gonna direct this person, this artist? Oh, that would be you. So I’m gonna put in an art director. Ok an art director what do we gonna put in
for an art director? What dollar amount should we put in for the
art director? Frank: I mean I would say like $700 – $800. Chris: $700-$800? It can’t be less than this guy. So this guy’s coming in at $750 I’m gonna
say like $900, ok? Now we don’t need to art direct this person
every single day of the job. So you can just put in a random number there. Let’s say 5, ok? So let’s say 5 days and it’s not that you’re
not working with him everyday it’s just you’re prorating your time across the length of the
job so there now we’re up $4,500, ok? So let’s say that’s pretty good. Now if you need more artist help I would put
that in there. So are we good yet? Should we submit the bid? $7,500 plus $4k
plus $4,500–it’s $8,500 it’s um, $15–$16k I believe. So, right now we’re at $16k. Is my math right? Uh my business majors? $16k? Ok so we’re at $16k. Remember initially you were gonna come in
at $5k. So this is how you do a bid, ok? What else do you need in here? Are we good? Frank: Um, what about overhead? Utilities, rent, etc… Chris: Right. You can’t just show that in there. Frank: Yeah so how do you– Chris: How do you put that in there? Ok well these guys they don’t work on paper,
they work on a machine and there’s software attached to that machine so I’m gonna call
it a workstation. Now I can’t charge for the laptop to do the
bid but I can charge for the PC/3D workstation, ok? And I find a reasonable rental rate. What’s a rental rate for a machine? You know per– Frank: Per day? Chris: They usually do them by the week. What is it per week? What do you think? Just throw out a number. Frank: $1,000? Chris: That’s too much. $1,000 a week? Let’s say $500 a week. I don’t even think it’s that much. Cause we rent computers. So $500/week times 2 weeks, right? So now you have another $1,000 in here. So this number just keeps growing. What else do you have in there? Now I’m gonna roll in hardware and software
cost cause I don’t wanna delineate every single part to the puzzle right? So let’s just do a subtotal now. So now you have $17k. That’s your bid now, ok? $17k. I drew that one too close to the dollar sign
so you guys are gonna have a hard time seeing that, $17k there. Are we done? No because now as a business we need to make
profit. This is where we cover our overhead and our
stuff, k? So profit is gonna be anywhere between, depending
on what country and where you’re from and what industry you’re in, can be anywhere between
10-30%. So you just mark that up. So let’s just say because my math is not so
good, let’s say it’s 20% ok? So we’ll say 20% is our markup and you just
tell them, it’s markup, it’s our profit. Everybody that runs a business understands
that because if you paid everybody you still wouldn’t make any money. Ok? So 20% of that–so 10% of that is $1,700
so $3,400–so it’d be $3,400 right? So you’re gonna add that together, so now
you’re at $20,400 for this job. That’s how you do a bid and that’s how you
stay in business, ok? There’s a lot more parts and pieces to this
like a modeler, um you can charge for rendering even. Cause those are things that are out of your control. Does that help you understand how to do a bid? Ok, so I’m gonna come back to here. Alright. Now, those of you that are watching and you
just saw how you did a bid, if you wind up making an extra I dunno, let’s look at this
again cause I wanna make sure this is on camera. The difference between your initial bid at
$5,000 now and your new bid at $20,400 is $15,400. You can send me a check 10% of whatever that
profit difference is cause I got kids they go to private school. Somebody’s gotta help me out with the bills, alright? And I don’t do this for free. Ok. What’s next? Frank: Um so, how do I insure myself as like
a business owner to get over that first year? That first hump. Chris: The first year, first hump? What do you mean? Frank: Like the–um, I’ve been talking to
a lot of business owners they say the first few years are the hardest. So how do I play my cards right so I ya know
get over that hump and don’t like crash and burn? Chris: Ok. So your question is, how do you prevent crashing
and burning because you run out of runway? Right so you have a cash flow issue. There’s a couple things you can do. First, you can get a line of credit if you can get one. So if you have some kind of credit history
you can get a line of credit from your bank. Right now I think we have a $400,000 line
of credit with Wells Fargo. It’s necessary. It’s how companies fill the gap
against pending orders right? So if you get a new contract, say it’s $100k
contract now you gotta staff up you gotta buy machines, you can usually use that and
go and take that invoice to the bank and get a line of credit. Because clients don’t always pay you upfront. The good new is, if you’ve been listening
to this episode you have gotten $50k upfront. But before you even get that you’re pretty
sure it’s a lock you need to start getting the team ready and get things together. So you may do a little expenditure. I would rent everything I would work on crates
and boxes and buy your furniture from IKEA if you can. You don’t need fancy shmancy furniture and
things like that, ok? I would go to Office Depot and buy a $79 chair
and don’t worry about getting the Herman Miller Aeron chair. You don’t need it right now. And the last thing that you wanna do is create
this cash flow expenditure that you can’t manage. So run it very lean. That’s why when you go to startups, you’ll
notice, it can be some of the most valuable companies but they’re working on milkcrate
boxes with a door for a table top. Do it like you would do it in college, keep
your expenses down, ok? That’s how you manage that. So once the job comes in don’t start spending
that money right away. Some people thing, “Ok it’s a $100k job. I got $100k in my pocket I’m gonna go buy
a new car.” Don’t do that. Do not do that. So live within your means, ok? Where you want to spend money that you don’t
have is potentially because there’s a staff or an artist or a designer or somebody that
you really think you need and you need to take a little bit of an educated guess or
risk at the new work that’s gonna come in and you roll the dice and that’s what entrepreneurship
is about, ok? You have to take some risk. Don’t be stupid about it but take some risk, k? Frank: Here’s my follow up question to that. What’s the benefit between I would say doing
a startup from your home like digital nomads just kinda like everywhere scattering and
managing that team compared to say having a small space thats kind of like very manageable
like very small space. So what’s the benefit and pros and
cons between the two? Chris: It’s a lot–ok so the question is,
what’s the difference between a brick and mortar company verses a–
I think the term is fluid model? Where you just have a very small core team
of people. Everybody else just works remotely from all
over the world and you manage things remotely. Well, the first thing is–you wanna compare
the benefits and the pros and cons, or just one or the other? Frank: The pros and cons. Chris: Ok pros and cons and you know what
the pros and cons are going to be. Communication is gonna be much more difficult,
you’re gonna spend more time dealing with project management because you gotta get the
assets out to everybody, and not everybody’s working with the same version of software
and not everything’s synced up so you have to figure out some way to manage that. And what are some of the tools that people
use to manage teams across the globe? They might use Trello, they might use Basecamp,
or Slack, there’s a bunch of project management software that’s out there that can help you do that. And they can ever use it to track time, like
time sheets, things of that nature. The benefits are, you get to work with anybody. It’s a higher quality of life for those artists
cause they get to work from home and do whatever they need to do as long as they do the work. It would most likely pay less because you
can work with whoever you want wherever and so you gotta look at in the U.S. or the U.K.
maybe the pound or the dollar is quite high relatively speaking cost of living’s quite
high, and so there are a lot of people in Brazil, amazing artists and animators, some
people in Korea and Japan or wherever else it is, I shouldn’t say Japan. Japan isn’t gonna be cheap. Or in China, in your case and India would
be another place so you can leverage what the local economy is cost of living with the
quality of the artist. Now generally speaking, the best artist do
go to the biggest markets. So they’re gonna come to San Francisco, LA,
New York, the U.K. you know probably London. Wherever the big effects shops are. That’s where they’ll migrate, ok? So you probably will not be getting the same
quality artist that you’re used to seeing here. So more management. Alright, I’m gonna give you one more question
because I think we’re way over time. So what other question do you have? Frank: Um I guess, the last question would
be, what is good company culture and like team building? I feel like you’ve been talking a lot about
management and I feel like the way I have to run this thing it has to be you know digital
where everyone’s scattered, for the initial startup. So how do I manage the team and um you know
get them to feel positive and feel confident in me and themselves to do this work cause
i feel like that’s very important in this kind of upsetting. Chris: Right, so you have multiple time zones
now you’re trying to sync everybody up right? Assuming that they’re not all local to you. So, first of all getting everybody on the
same page is tough. So let me just talk about company culture
first and then we’ll figure out how to do that over distance based operations like this
kind of fluid agency that we’re talking about. Company culture to me is one of the most important
things that you need to focus on as a company. You get it right at the beginning and you
just go from there, ok? So what values are important to you as an
artist because you’ve worked at places where you are an artist and now you’re gonna flip
uh you’re gonna go on the other side of the game, so to speak, you’re gonna go on the
other side of the fence. So now you gotta remember what was important
to you as a person. What attracted you to a place? Now chances are when a freelancer’s out there
or a person who’s kinda considered taking a staff position, they’re looking at everything. They’re looking at how much am I getting paid,
how good is the work that I’m doing, and how do they treat me, and how do they manage their
companies. So very likely you cannot compete on price
or the quality of the project so you gotta focus on the other two components. How do you treat them, how do you manage projects. So that’s your competitive advantage to kind
of level the playing field if you will. Some companies, won’t mention who they are,
they do amazing work. Their company culture is less than desirable
but they can get people to come in because the work is so good, right? So you’ve been there you’ve done that so you
know and so you kind of know what kind of company you want to have. I kind of look at it like this, people that
come into our company whether they are freelance or staff, I wanna make sure that their long
term career is protected and nourished as supposed to just using them up and spitting them out. Because if you go at this kind of rate where
you’re working all day and night, and I’ve done that. I’ve stayed up all night I’ve worked all night
with freelancers before, when the sun’s come up together, right? It takes a toll on you and you can only do
that for a certain period of time. So the idea is that you wanna minimize those
moments when you’re taking those kinds of jobs that require you to do that. Where you’re staying up all night. Something’s telling you it’s wrong. You accepted a job going in knowing, that
there’s not enough time, the job is too big or complicated, and you don’t have a big enough team. So that’s the recipe for burning everybody
out, including yourself. I’ve been doing this now for almost 20 years. I’m as passionate about the work I do today
as the day I first started. Cause I learned how to manage the projects,
my time, and what I put into it. So what else we wanna know about company culture? And if you haven’t done so already, I would
highly recommend, I don’t have the book here. I could go grab it but, Delivering Happiness
by Tony Hsieh. Definitely read that book and Tony Hsieh for
those people who don’t know who he is, he’s the founder of Zappos and he sold his company
for like a billion dollars to Amazon. That’s not an expression. I think it was right around a billion dollars
and he’s selling shoes and he writes about how the margins are so small, the only thing
they have is culture and he’s a big believer in that. So, read that book then come back to me and we’ll talk. Again, if you have questions after you read
that book, Happiness, I’ll provide a link down below to buy the book. Once you guys read it you can post questions
or we can have a little conversation about it. These are two books that I believe are really
important in shaping my thinking about business. First is The Win Without Pitching Manifesto
and the other one the virtual book I’ll hold it up here maybe there will be a graphic that
Aaron can provide for us and it’s called Delivering Happiness by Tony Hsieh. He sold his first company when he was in his
20’s for a couple hundred million dollars so he know’s what he’s doing. Frank: From what I heard he lives at like
a trailer park. Chris: He lives in a trailer park now. Frank: He I was looking at a video of him
like he cherishes experiences and culture more than anything. That’s something I really admire. Chris: So there’s one thing I read about him
recently he says everybody’s talking about work life, balance, to manage those two things. He’s like that’s not his idea right now. His idea is about work life integration. That if your life and your work can be the
same you’re living a pretty good life and you’re working in a pretty cool way, and that’s
why he lives in this park that he’s asked everybody to come out and live next to him. So he’s got a llama living in the desert in
Las Vegas so it’s pretty cool work life integration. Frank: Is that something you– Chris: I’m striving to achieve that same kind of goal. Yeah. Frank: Yeah I mean that’s most questions I have. Chris: Alright. Well guys, thanks for tuning in for another
episode of Ask Me Anything. Thanks for tuning in, see you guys next time. [music]

Amazon Business Seller Program: Business Price and Quantity Discounts – Manage Pricing

(lighthearted ringing) – [Narrator] Welcome to our video on business price and quantity discounts for Amazonbusiness sellers. After watching, you should understand the basics of offering business price and quantity discounts to registered Amazonbusiness customers
using manage pricing. By offering a business
price, you’ll be providing a lower price to registered
business customers, giving you more chances to win the buy box and grow your sales to business customers. To add business price
and quantity discounts to your offers, click manage pricing under the pricing tab in Seller Central. Simply click on the business price field for which you’d like to change pricing, enter your business price,
and save as prompted. To offer discounts for quantity purchases, first, you’ll need to
decide whether to offer a fixed discount or a percentage discount off of your business price. Click quantity discounts
below the business price box and choose between percent off price or fixed prices. Enter the order quantity
at which you would like the discounts to kick
in and the appropriate discounted price or percentage off. You are able to add up
to five price breaks based on the quantities of your choosing. When you’re ready, click set prices to publish the pricing. And that does it for business price and quantity discounts. Thanks for tuning in. (lighthearted ringing)

Microsoft Surface Hub 2 hands-on: a $9K PC on wheels

– Microsoft has been obsessed
with joint displays for years. If you’ve ever seen an
older future vision videos that they’ve produced, you
would have seen joint displays hanging on walls, with
people interacting with them, collaboration, that kind of stuff. Well, the future has
well and truly arrived. This is Surface Hub 2. At first, this looks like
a beautifully designed TV on wheels but it’s what’s
inside and out that counts and it kind of puts this beyond what a TV does right now and
even the conference room TVs that you might use at your workplace. So let’s start with the hardware. Compared to the original 55 inch model, Microsoft has now opted
for a 50 inch display with a three by two aspect ratio instead of the 16 by nine before. This display runs at greater
than four K resolution, thanks to the aspect ratio. And it has integrated speakers and 20 15.5 millimeter bezels. The whole unit is 60% thinner than before and Microsoft is using (mumbles)
glass with a matte finish to bring down some of that
glare that you might get off the usual TV that’s
in a conference room. You’ll notice this display
is mounted on a stand which Microsoft has
developed with Steelcase. It allows the display to be
moved around room to room and they’ve also carefully
designed the four K camera on the top so that if you move it around, you smash it into the wall, it
snaps back so that it doesn’t completely crash off of
the top of the device. There’s even an optional
battery that you can slot in to the base of the stand that’ll give you around about two hours on battery life. So let’s dig in to exactly what you can do with all this hardware. Like the Surface Hub before, this display runs Windows 10 Team. It’s designed to run Microsoft’s
universal Windows apps and that means apps like Word,
Whiteboard, Microsoft Teams and many others will
run just fine on here. Microsoft has done some special
work on the screen bonding to make the pen experience
a little better. And it will instantly pair as
soon as you touch the display. You can even snap it to
the side of the display just like a Surface Pro. Because of the combination
of touch, stylus input and the three by two
aspect ratio, you can get some pretty interesting
software experiences here. The idea is to increases
collaboration for meeting rooms or to allow workers to
wheel this to locations where meetings might
not typically be held. Microsoft is shipping this right now with its regular sort of
modified version of Windows 10. But next year, it plans to
release a processor cartridge that you’ll just simply slide
into the back of the device. This processor cartridge has the CPU, RAM and the GPU inside. Next year’s particular
cartridge for the upgrade will include a more powerful GPU at least. That cartridge will also enable
some of the more interesting software experiences that
Microsoft isn’t enabling just yet. One of those big ones
is the screen rotation. We’ve seen that before and
there’s also the ability to tile up to four of these side by side. For businesses that want
something a little bit bigger, Microsoft is even announcing
an 85 inch version of the Surface Hub 2 and
a 16 by nine aspect ratio. But the company isn’t showing
that new model just yet. Businesses in the US will be able to start placing orders today
and those will be fulfilled and delivered in June this year. Pricing for the 50 inch
model starts at $9,000. Microsoft is also gonna send it as a monitor for slightly less. And a stand is sold separately for 1449. The battery pack I mentioned earlier on is around about $1400 as well. Microsoft hasn’t announced its 2S processor cartridge
pricing just yet. When you add that all up, it’s
a staggering nearly $12,000 for this device if you want everything. This future certainly doesn’t come cheap. That was a quick look
at the Surface Hub 2. If you wanna see more devices like this, or anything else, check out
The Verges’ YouTube channel at YouTube.com/TheVerge or TheVerge.com