Just Married!

In case you wonder silence in our blog, we are on vacation in states & Mexico. What a weird trip we are having. Snow in Los Angeles, blizzards in Las Vegas. Now we are stuck in Houston, Texas, and we did not have any intentions to be here. I just combed my hair with the fork and I seriously miss my luggage.

At least, the travel companion is the best! We just got married in Vegas!

Big Bad Car Czar and the Little Red Riding Hood of the Automakers

News from Bloomberg: U.S. May Give Car Czar Power to Force Bankruptcy, Levin Says:

The U.S. Treasury may adopt a plan that would let a car czar or the Treasury Secretary force General Motors Corp. and Chrysler LLC into bankruptcy if the automakers don’t show they can survive without government aid, a U.S. senator said.

The concept and wording of "forcing a company into bankruptcy by not giving it government aid" is an amazing demonstration of marketing a thought pattern. 

In a free market, the government has a very limited space and function. If some company does horrible business, it forces itself into bankruptcy. By not intervening in the free market and not transfering public money into it, the government isn't forcing that company into bankruptcy. Bloomberg's phrasing makes it sound that it's all the government's fault if Chrysler goes bust. Which is not true at all. The reality is that the automobile companies have done poor job and they deserve to go bankrupt.

Ted and Nick both have one Mars bar. Ted eats his right away, while Nick saves his candy for later. Ted is a greedy little brat and wants more. He starts to beg Nick to share half of his Mars bar. Nick says no.

Is Nick forcing Ted into starvation?

Nobel prize winner Paul Krugman is wrong

Paul Krugman writes in his New York Times column:

"The usual response to an economic downturn, cutting interest rates, isn’t working. Large-scale government aid looks like the only way to end the economic nosedive."

And

"As in the United States, monetary policy — cutting interest rates in an effort to perk up the economy — is rapidly reaching its limit. That leaves, as the only way to avert the worst slump since the Great Depression, the aggressive use of fiscal policy: increasing spending or cutting taxes to boost demand. Right now everyone sees the need for a large, pan-European fiscal stimulus."

Now, I've said this before and will repeat again: Why should we try to avoid a downturn in the economy, and how would that even be possible? Why should we try to put the air back in the bubble? It was a bubble! 

I hope someone will some day explain me why. Because even Nobel prize winning economists don't seem to make a bit of sense.

Story of Stardoll.com - a co-founder's story, Part Three

I was aware of my mother's crazy paperdoll page, and I was basically just happy that she had a great hobby. Like most men, I didn't "get it" at first. When she called me and told me that her statistics say the the site receives 8000 users each day, I realized something very special was going on. At that point I was studying classical composing in Sibelius-Academy and my summer vacation was just around the corner. We agreed with my mother that I would look more into the website and try to find out ways to monetize. I started to study internet business like crazy. I understood that there was this whole market of girls, for which there was very little online entertainment. Women/girls make up 50% of the online population, and they weren't been served! That plus the fact that the web traffic kept growing like crazy, made certain that we had a business at our hand.

Together we decided that my mother kept doing what she loved the most, which is to draw dolls and design clothes, while business and product development, and managing the company were left for me. This gave me a lot of enthusiasm. I was also a regular poor student, so every extra euro was welcome. I read everything I could about internet business and running a company. I studied HTML and Flash, but not in order to code, only what can be done with them. I studied advertising systems and we experimented with them. We moved out (were kicked out) of different hosting service providers before we got settled for one. That was because our data was downloaded mostly from USA and other international locations, and the overseas bandwidth costs were too much for the small hosting companies.

We got the advertising systems running and boy we were happy when we saw our first revenue coming in. On business development side, we came to conclusion that the service could be two-sided: we could get money from companies who would want to advertise on our site, or display clothing lines, promoting stuff, etc. And also we could get money from users, subscriptions, VIP functions, shoutboxes and so on. On product development side we figured that the girls would probably want to create their own doll and start buying it clothes with our own money system. Also saving dress-ups was important. By this point we understood that we needed technical help.

Part Four

Change We Can Believe In

There is going to be lot of changes in my life, big ones, in few weeks.
Good changes, and I love changes.

Robert F. Kennedy said "Progress is a nice word. But change is its motivator. And change has its enemies." Change may have always enemies, but all new needs friends. So let's think positive and be friendly to new changes.

We both love this quote from Pixar Ratatouille movie:

EGO: 
In many ways, the work of a critic is easy. We risk very little yet enjoy a position over those who offer up their work and their selves to our judgment. We thrive on negative criticism, which is fun to write and to read. But the bitter truth we critics must face, is that in the grand scheme of things, the average piece of junk is more meaningful than our criticism designating it so. But there are times when a critic truly risks something, and that is in the discovery and defense of the new. The world is often unkind to new talent, new creations, the new needs friends....

Autechre - Gantz Graf

"The music video for "Gantz Graf" reached a cult status in underground computer-generated imagery art circles. The video features an abstract object (or an agglomeration of objects) perfectly synchronized to the sounds in the music as it morphs, pulsates, shakes, and finally dissolves. The visuals contain the same amount of richness and detail as the soundtrack does, having a visual counterpart to every little sound or frequency range in the song"

This video had a huge impact on me when I first saw it. The music is probably a bit too weird and avantgarde for some, but I enjoy it. The reason I post about this video is that I saw it again after a few years and remembered how culturally important it actually is. It is very much ahead of it's time I think.

Director: Alex Rutterford.

Watch the Youtube video in HD 720p here. (can't be embedded unfortunately)

Public vs. private allocation of money

Is government policy of spending public money to create jobs a good thing? I bet you that most people think that it is. For instance in United States right now, the government is using public money (either tax money or by creating inflation using the Federal Reserve to print the money) to save the autoindustry and all the jobs that are dependent on them.

First off, if people aren't willing to buy Ford, Chrystler or GM cars or invest by buying their stocks, then why should they be forced by the government to do it?

Second, when the government is using people's money to create jobs somewhere, they are taking away money that the people would have used some other way, that would have created jobs naturally somewhere else.

But people can see the people at work in the autoindustry. They see pictures in the newspapers. They can  see the cars that are made. What they can't see is the jobs and goods that are not allowed to come to existence.

Using public money to create jobs destroys private jobs somewhere else.

Two most interesting music related startups

The first one is Soundcloud. It's sort of like Flickr for musicians. Here is a work-in-progress track from my upcoming electronica album "Hoodf":

Hoofd 5 by lasseenersen

The other very interesting company is Spotify. The CEO and founder of this company is Daniel Ek. For a brief time he was the Chief Technical Officer of Stardoll.com. Extremely gifted technical fellow with good business sense. Spotify lets you enjoy music for free. You can also share your playlists. They make money with advertising and user payments. If you have Spotify, here is my "disruptive electronica" playlist. If you don't have it yet, you can ask me for invites.

Music and internet are both passions of mine, and I believe that both of these companies will succeed very well.

Economics in one lesson

"The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups." -- Henry Hazlitt

Embrace the pain

There is nothing we can do to prevent a severe recession. To think that we can as a global economy live beyond our means, spend too much on consumption, create enormous amounts of debt, and somehow not have to pay for it is absurd. But somehow there is a weird consensus about trying to minimize the pain, smoothing the recession and pretending nothing ever happened. We are distorting the natural forces of economy, and it will only make things worse in the long run. 

Yes it is possible to print so much money and pump it into the system that it will inflate the recession away for a few years. But it's like curing alcoholism with three cases of beer. It will not make the fundamentals of the economy any better. It is going to create a huge global inflation somewhere down the line. That is the disease the central banks are injecting into this already shattered economy. That will make the commodity prices skyrocket and result in food shortages in third world countries. You see, someone will bite the bullet at the end, no matter how you slice it. It is only matter of who, how and when. 

There is honor and grace in paying the full price yourself for the bad and stupid things you've done.

Economy surprised Copywriter

Well, you have your brief, you make some research, but still it's not easy to predict the future...

In the year 2007, autumn, Nordea Bank ad:



Headline says loosely translated: "You probably won't be hearing 'cheap as oil' -saying tomorrow either"

Year 2008, winter, headlines in finnish tabloid:



Headline says: "Cheap - cheaper - crude-oil."


whoops.

2xDavid

Two David's have made a quite impact to me yesterday.

1. David Droga
from Droga5 ad agency. He was visiting here in Finland. He seem to be really down to earth and clear minded. I really felt that he spoke out loud things I've been thinking about lately. I guess it has to be something to do with his half scandinavian and half australian heritage. There was lot of common sense, like in situation you want to do something outside the box. Maybe you need partners or volunteers, or make few phone calls. Way too often we think, ok, it's not gonna work, and it's not my duty to make that kind of calls, they don´t want me to call them. Guess what? Usually those people are going to take your calls. If there is benefits for them also, why would they say immediatly no? He was also talking about insight and strategy, you can be as creative as possible, when you have a great strategy first. No need to be just clever clever, or somehow oh-so-different than others. I just had kind of enlighten while watching his latest campaigns like tapproject, million and the great schlep. It's right there, in the pivot point, what makes them tick.

One example: Teenager and young adults + Shopping. Ok, they use a lot computers but they also love to hang around the mall, and watch telly and movies to get fashion tips. What if they could get social network and entertainmet while online shopping? So they created "digital mall" Honeyshed. Interesting combo between TV shop and web store for young people.

2. David Thorne.
Guy who tried to pay his bill with a spider pic. He says in his email: "Dear Jane, I do not have any money so am sending you this drawing I did of a spider instead. I value the drawing at $233.95 so trust that this settles the matter,"

And the value of this Itsy bitsy spider? In Ebay, US$10,000. Well, I´ll buy that lovely piece in 10,000€, but I also value this posting as a 10,000€ word of mouth advertising campaing, so David, we are even steven.

Paperdoll Heaven makes a comeback

Stardoll launches www.paperdollheaven.com  again. It features over 500 dress-up games, without the social networking and MeDoll. 

I think this is really good for the younger users, and will make it easier for them to play dress-up. Cool stuff!

The lion hunter

I´m quite buzzzzzyy right now, so Lasse´s economical rant is dominating this blog.
But let me tell you at least something about advertising:

UNIQLO and The Cannes International Advertising Festival invites designers all over the world to design a official Cannes T-shirt.

We finnish designers rarely shine in Cannes awards, but here is one change to make an impact. So I dare you to design!

Of course awards are not the reason to design, but I guess they are pleasant side effect if you are doing something right.
So I've set myself an ambitious goal. "Get in Cannes shortlist 2009". In this economical situation when budgets are cut down and campaigns frozen, I must be crazy. But I haven´t lost my hope yet. I´ll think we are developing something special right now.

Stay tuned.

PS Lion pic inspiration via kattalogen.

PPS Ok, cats are so last season. Here´s something new: FUCK YOU IM AN ANTEATER

Creating impotent banks

Banks loan money to people and companies so they can invest in turn in something they believe in, like real estate. When the investment turns out poor, and the debtor can't make loan payments to banks, the loans turn non-performing. The banks could collect the collateral, but since it has lost a lot of value, it would be bad business for the bank. So the banks keep the loans in place, put them in a time capsule, waiting for the asset prices to go back up. They become unrealized loss.

Unrealized loss is an interesting concept. It is an idea that defies gravity and distorts economic balance. If all the companies in the world would have to power to refuse failure, what kind of system would that turn out to be?

In a crisis, when lots of banks have lots of non-performing loans, which haven't been written off, banks cannot lend more money until they increase their cash reserves to cover the bad loans. This leads to less financial cushion for economic growth.

Propping up failures lead to a degenerated economy. Such that has grown huge intolerance to cash - the economic viagra.

The solemn task of not letting recessions to clean out excesses is a very new thing to do. We don't have much experience in how it is supposed to turn out eventually. Jeremy Grantham (hat-tip Paul Kedrosky) and Ross Healy point this out well. 

I just think that central and commercial banks (what is the difference, by the way?) have gained a terribly powerful status and influence on the economic system, and it is really hurting us. They are the modern untouchables.