Sage Twitters it Right!

You may remember some time ago I blogged (Be Smart Not Right!) on the handling of the Kashflow PR attacks on Sage, and that I felt that perhaps the Sage guys were missing a trick in getting too "formal" with Duane.

Well, I take my hat off to them and in particular to Paul Stobart, UK MD of Sage, by cutting through the BS and communicating directly and in real time with their channel partners and customers through Twitter yesterday.

There are those that might claim that Sage's partner base is too large, and indeed there may be even those over the years that might have wanted to take the knife to cut it down to a more manageable size. Right or wrong, this sort of initiative allows the company to directly interact with the more active and lively parts of the channel, which is what Sage clearly needs to do in order to stay at the forefront as a lead vendor in the SME market.

REAL US Unemployment

I am sure many of you have seen and/or heard analyses that argue that the US unemployment rate is really higher than reported, due to a number of factors. Here are a few bullets that use facts (that I got from WSJ) to put things in perspective:

Where are we today:

• Current rate = 9.5% unemployment
• 7.2 million jobs lost since the start of the recession
• The cumulative job losses over the last six months have been greater than for any other half year period since World War II
• The job losses are also now equal to the net job gains over the previous nine years, making this the only recession since the Great Depression to wipe out all job growth from the previous expansion

That is bad. but it may be worse than it sounds. Now, let's increase the 9.5% to a more "real" number:

• 1.4 million people wanted or were available for work in the last 12 months but were not counted, since they may not have sent out a resume in the past 4 weeks - this adds about 0.8%.
• The number of workers taking part-time jobs instead of their sought after full time jobs has doubled to about nine million, or 5.8% of the work force. Taking 50% of this, adds 2.9%.
• The average work week in the private sector (~80% of the work force) is now 33 hours. Almost one hour less than prior to the recession. (This is driven by things like production capacity in the US is dropped to an average of 65%.) This is tantemount to 3.3 million fewer employees - an additional (quasi) 2.2% for unemployment.
• Alltogether, one could conceptually add about 6% to the 9.5% number - bringing it to well over 15%!!

So are there signs of improvement? Not looking good. And this is based on the uniqueness of this recession.

• First of all, the average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948.
• Second, the number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.
• Third, unemployment has doubled to 9.5% from 4.8% in only 16 months; very fast.

Why has all this happened? What is so unique?

I believe that in this recession, the employee cutbacks are not simply cutbacks. Normally, companies do cutbacks, and then rehire once the economy improves. The fire based on decisions taken earlier in the business cycle - to ensure earnings targets, etc.

But (if and) when economic activity picks up, (as quoted from the WSJ - ) "many unemployed workers looking for jobs once the recovery begins will discover that jobs as good as the ones they lost are almost impossible to find because many layoffs have been permanent. Instead of shrinking operations, companies have shut down whole business units or made sweeping structural changes in the way they conduct business."

Just look at two huge sectors and employers in the US - the auto sector and the financial sector. The US auto market is forever slashed across the sector's value chain, while the financial services companies have exited many parts of the world of finance - never to return.

So it seems that Americans and many other parts of the world have to rethink how to rebuild.

China - What are they saving up for?

I remember when I was a kid, I used to get a weekly allowance. I used to spend it as I wished. But when there was a specific reason, I would save my money towards the larger purchase. Like Nike Air Jordans, roller blades, etc.

So my question is simple. What is China saving up for? I fear the answer...

Twitter's moment? - cont

Richard Stacey has an interesting post titled Twitter is making and destroying history.

Twitter's moment?

I joined Twitter 6 weeks ago and, frankly, could not see the genius. My tweets were of the "sunny day, got bad heartburn" kind. The people I tracked provided nothing interesting. And so, I quickly gave up.

The aftermath of the Iranian election may end up being a watershed event, not only for Iranians but for the rest of the world too (emphasis on the "may"). This thing is unfolding hour by hour. And it turns out that the very best way to follow the event is on Twitter. So suddenly I am now finding myself checking Twitter every few hours and using it as a source of serious, real time information about a critical current event.

The 1991 Gulf War made CNN into the world's most important news source. Could the Iranian revolution (yes, please) of 2009 do the same for Twitter?

Salute to Stanley Fischer!

The Exception to the "Golden Rule" - He with the Gold Rules!

For the un-initiated there has been somewhat of a saga surrounding the position of Chairman of Bank Hapoalim, previously Israel's biggest bank.

The saga has seen a very public spat between the controlling shareholder of the Bank, Sheri Arison, and Stanley Fischer, Governor of the Bank of Israel.

The core of the argument has been about the suitability of its soon to be replaced Chairman; the direction that the bank has taken; and the governance employed to make those decisions during the last couple of years.

I am not a banking analyst, not an expert in bank regulation etc, but this is not the key.

Stanley Fischer has brought an enormous amount of credibility to the Israeli economy since being appointed in 2005, and is helping to steer Israel through the stormy waters of the global economic crisis.

Sheri Arison, about whom I have nothing particularly good or bad to say on a personal level, has clearly had a very strong difference of opinion with Fischer. She is part of the economic elite of Israel, which is popularly perceived as having too much economics way, in a way that creates significant imbalanaces within the economy to their advantage, and the great disadvantage of the rest of us.

During the campaign Arison went pretty low in her tactics, accusing Fisher and the Bank of Israel of McCarthyism and other conspiracies. In addition she went on to accuse him of corruption and lodge a complaint with the State Comptroller.

This was serious a error of judgment on Arison's part as the clear consensus (other than within the 10 richest families in Israel) is that Stanley is the straightest guy in town, who has done more than most to help navigate the country through the crisis.

Most importantly for Israel was Fischer's ability to stand firm against this onslaught. Had he not done so then it would surely have become open season on sensible independent regulators in the face of our business tycoons as they seek to apply the "Golden Rule" - he with the gold rules!

When I look at this in the context of Israel's overall position in the light of the global crisis, it gives me a high level of comfort that we are better placed than most developed (and many undeveloped economies) in that we are still have an independent, but strongly regulated banking industry that has not gone into meltdown during the last 18 months.

If the global crisis eases during the next few months, Israel is very well placed to take a strong advantage of the coming upturn.

ZenithSolar Goes Live!!

In addition to my role with Goldrock Capital, since March 2007 I have been the finance & strategy advisor to an early stage solar energy company called ZenithSolar. ZenithSolar has developed a very unique concentrated photovoltaic CPV system that provides both electricity and thermal energy at a combined system efficiency about 75%. Truly groundbreaking.

On Sunday, ZenithSolar launched its first commercial pilot at kibbutz Yavne. Shimon Peres - the president of Israel - spoke and had the honor of cutting the ribbon together with the children of some of ZenithSolar's key management. There were a number of other government officials there as well - including the ambassador of Australia (since the Co-Founder and CTO of ZenithSolar is Bob Whelan, hailing from Australia). 

The pilot consists of 32 - 11 sq. meter non-parabolic dishes that are each covered with more than 1,200 small mirror facets that each focus the sun's energy at on 10 centimeter squared high efficiency gallium arsenide (GaAs) solar cell module. Due to the extreme heat caused by the high concentration of the sun's energy onto the single module, the module is cooled with a closed loop water system that heats a hot water tank- consequently creating valuable hot water for various uses - which include domestic needs, washing, industrial processes, etc. 2 dishes together sit on top of a highly accurate 2-axis tracking system. This pilot is expected to generate between $75,000 and $100,000 of energy savings (both electricity and thermal) per year. This is thanks in part to the inflated rate of 2 shekels per kWh (about $0.50) that the Israel electric company must pay for each kWh that will be fed to the electricity grid. 

This is ground breaking on many levels. 

1) No other solar PV system in the world claims efficiencies beyond about 20% (claimed and delivered by SunPower). ZenithSolar is providing 75% - due to the system harnessing and utilizing the residual heat.

2) As an application - providing cogeneration (CHP) 100% clean energy to a residential gated community is probably the first of its kind on a global scale. 

3) This is the largest grid connected solar installation in Israel. 

4) Specifically in the CPV space, CPV has only had utility scale pilots in Arizona and Spain. This is possibly the first CPV pilot deployment to a REAL customer in the world. 

5) The corporate achievements reached by ZenithSolar - with the resources and manpower that has been available to them since its founding in 2006 - is truly astounding and I congratulate Roy Segev - the CEO, and the entire team on a job well done!

The future is very bright for ZenithSolar!

The video below is the introduction speech for ZenithSolar and President Shimon Peres (in Hebrew) by Prof. Ezri Tarazi. Ezri is leading product design and strategy at ZenithSolar. He is also the head of the industrial design Masters program at the elite Betzalel Institute in Jerusalem. He has been with the company since the founding and has been integral to its success. At 1:45 in the video, you can get a good look at the solar field. It looks fantastic!