This is TOTALLY INSANE

O. M. G.   סּ_סּ

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  11:31pm  •  Sports  •  Tweet This  •  Add a comment  • 

Can a driving simulator champion do the real thing?

Greger Hutu is a master of iRacing – a physically realistic driving simulator with physically accurate cars on physically accurate tracks. How would Greger perform then, if he was placed into a real race car and sent around a track which he has been around virtually hundreds of times before… but never for real? Top Gear Magazine reports:

On a normal Thursday, Greger Huttu sits in the blue glow of a computer screen, in his bedroom in the teeny town of Vaasa on the west coast of Finland. In the afternoons, he joins his fisherman father to land a catch of perch netted from Arctic waters. But not today. Instead, he’s wedged into the cockpit of a single-seater race car, in the boiling heat of Road Atlanta raceway, Georgia. He’s never driven anything like this before – his regular drive is an old Ford Sierra – yet an empty track awaits him, a full race team is at his service and he has full permission to drive as fast as he pleases.

  6:46pm  •  Sports  •  Tweet This  •  Add a comment  • 

Cablegate has broken

The first batch of Cablegate cables has been posted to Wikileaks. NY Times reports:

A cache of a quarter-million confidential American diplomatic cables, most of them from the past three years, provides an unprecedented look at back-room bargaining by embassies around the world, brutally candid views of foreign leaders and frank assessments of nuclear and terrorist threats.

Here is example of one leaked dispatch, entitled “A Caucasus Wedding” (which the Times refers to at the end of the above article). It’s fascinating:

After the fireworks, the musicians struck up the lezginka in the courtyard and a group of two girls and three boys — one no more than six years old — performed gymnastic versions of the dance. First Gadzhi joined them and then Ramzan, who danced clumsily with his gold-plated automatic
stuck down in the back of his jeans (a houseguest later pointed out that the gold housing eliminated any practical use of the gun, but smirked that Ramzan probably couldn’t fire it anyway). Both Gadzhi and Ramzan showered the dancing children with hundred dollar bills; the dancers probably picked upwards of USD 5000 off the cobblestones. Gadzhi told us later that Ramzan had brought the happy couple “a five kilo lump of gold” as his wedding present. After the dancing and a quick tour of the premises, Ramzan and his army drove off back to Chechnya. We asked why Ramzan did not spend the
night in Makhachkala, and were told, “Ramzan never spends the night anywhere.”

Here is the NY Times’ justification for publishing reports about this data. On the other hand, I think that the ethical and other grounds that Wikileaks stands on are far more questionable.

  5:37pm  •  Current Affairs  •  Tweet This  •  Add a comment  • 

Australia vs West Indies ODI, 1996

The first match of the Ashes is in swing, so I was idly browsing through some cricket stats. Everyone knows that Don Bradman’s 99.94 test batting average was multiple standard deviations away from the next highest (less than 61). But lesser known is that Michael Bevan’s ODI average stands apart from the rest of the crowd as well – not as far away as Bradman, but there’s still an obvious gap:

Bevan was a terrific ODI batsman – he was normally a mid-order batsman, and helped to prevent the tail from folding too quickly after the top-order batsman were long gone. He had a really good strike rate as well. This reminded me of an absolute classic, nailbiter of a match I watched when I was young – back in 1996. Australia was playing the Windies at the SCG. The Windies made 173 in an innings shortened by rain. When Australia went into bat, they were immediately in trouble, collapsing to 6 for 38. On came Bevan, and two and a half hours later, Australia was 9 wickets down, 1 ball to play, with a 4 needed to win the match, and Bevan on strike.

I managed to find an old highlight clip of the match online, and this is what happened:

  11:41pm  •  Sports  •  Tweet This  •  Add a comment  • 

The CEO Whisperer

Stephen Miles is a CEO coach. He works with CEOs of very large multinationals, such as Marius Kloppers (BHP), interviewing them rigorously and providing them feedback and leadership advice:

Miles may not enjoy such biographical scrutiny, but it is the method he uses with his CEO clients. "Our first encounter was three hours," says New York Life CEO Theodore Mathas, "and I think we got up to when I was in the seventh grade. He asked questions like ‘Did you get your homework done?’ and ‘Did you spend more time with your mom or your dad?’ It was a little unusual." Miles says his goal is to understand what shaped the executives as human beings. "I care less about what they think than what they have done." Says Mathas: "He made me feel comfortable, but it was clear he wasn’t there to be my friend."

A side effect of his job is that he travels a lot.

Miles seems to live for his clients, even those he sees in person only once a quarter, with phone and e-mail contact in between. "He has this capacity to stay in touch and be available, wherever he is in the world," says Foster’s Crawford. "I just hope he doesn’t get overworked."

It’s a reasonable concern. Technically, Miles lives in Atlanta with his wife, Kelly, whom he met while in college. She started her career as a case-management officer at Kingston’s Prison for Women and now works as an associate principal in Heidrick’s leadership-consulting practice. They don’t see each other very much, however. In the tradition of the famously mobile management guru Ram Charan, who for years had no fixed address, Miles spends almost all of his time on the road, half outside the U.S. He has earned top-tier status from three separate frequent-flyer programs. (Even the jet-setting corporate downsizer George Clooney played in Up in the Air can’t match that.) To sustain their marriage, it helps that the Mileses have no children and Kelly endorses her husband’s travel needs. "We build in long weekends," he says.

  9:58am  •  Business & Finance  •  Tweet This  •  Add a comment  • 

The real reason why merchants use Groupon

If you haven’t heard of Groupon, it’s a site which emails users an offer each day. The offers provide deep discounts (around 50%) on all manner of things – meals, consumer products, services, and so on – based on the premise that there’s power in group buying.

This premise would intuitively lead you to believe that Groupon can get these discounts because it’s able to buy in bulk. The upside for the merchant is they get a guaranteed chunk of revenue, and also introduce new customers to their business. However, when you think about it a bit more, you start to wonder how merchants can make any money when they discount their goods by 60%. Surely, their margins can’t be that high? And then you have to factor in Groupon’s cut – which has to be significant for it to earn its multi-billion dollar valuation.

It turns out that Groupon actually splits the sales revenue 50:50, which means that merchants cop a markdown on their goods or services of about 80%. There are very few businesses in the world – especially when it comes to consumer goods – that have that kind of margin, so the conclusion is that the merchants lose money. Why do they do it?

You see, for the merchants, it’s not about making a profit on these deals. For merchants, the value proposition is advertising. Groupon is a marketing channel for merchants, not a sales channel.

This post on NY Times’ blog does a great breakdown of all the factors weighing into whether it makes financial sense for a merchant to use Groupon:

There are eight key calculations you need to consider to determine whether this is a better advertising vehicle than something else you may already be doing:

1. Your incremental cost of sales — that is, the actual cost percentage for a new customer. If you are giving boat tours and have empty seats, your incremental costs for an additional customer are next to nothing. If you are selling clothes, your incremental costs might be 50 percent of the sale price. Food might be 40 percent. In any case, don’t include fixed costs that you would be incurring any way.

2. The amount of the average sale. If the coupon is for $75, will the customers spend more that that? I have seen more than one retailer complain that nobody spends more than the value of the coupon. That’s unlikely but I am sure it can feel that way, and that is my point: Keep track.

3. Redemption percentage. You don’t really know until the end, but from my experience and from what I have heard, 85 percent is a good guess.

4. Percentage of your coupon users who are already your customers. I’m sure this number varies tremendously depending on the size of your city, how long you have been around, and the type of business.

5. How many coupons does each customer buy? (The more they buy, the fewer people are exposed to your product or service.)

6. What percentage of coupon customers will turn into regular customers? Again, it can seem as if they are all bargain shoppers who will never return without a discount, but that’s almost impossible. Is it possible 90 percent won’t return? Sure.

7. What is the advertising value of having your business promoted to 900,000 people — that’s the number on Groupon’s Chicago list — even if they don’t buy a coupon?

8. How much does it normally cost you to acquire a customer through advertising? Everything is relative.

  8:52pm  •  Business & Finance  •  Tweet This  •  Add a comment  •