Sleep Deprivation and the War

March 29, 2007

This’ll be a short one. I’m writing from Denver. It’s 1:00 AM Eastern time and I’m about to board a plane for Atlanta that will get me there at 5:00 a.m. It’s been a long day and it’s going to be much longer.

Airplanes are a great place to collect people. I met an interesting one on the flight out. She’s about twenty-four, I’d suspect. She kept to herself, as is customary on airplane flights. With nothing to read, she napped and looked out the window. I’d smiled at her earlier . . . remarked at how cool it was that the snack bags inflated at high altitude and wondered if they’d explode when we hit 40000 feet.

She asked where I was from and what I was doing. “Georgia,” I replied. “going to Salt Lake City for a meeting.”

Her family lives outside of Atlanta. She had been home for a visit and was returning to California, where she had been stationed. Marine Corps. Out 10 months after a tour in Iraq. She didn’t want to go back there.

“Things are bad there. I was stationed in Tikrit. It’s a civil war. I don’t know what we’re doing over there. Morale is bad. I don’t know how much longer we can stay.”

We talked about Vietnam, the war I missed; and how we’re not too good at learning from history. We talked about how tough it is to get the straight story on anything.

I asked her what would happen if we left. She didn’t know, but her answer was interesting.

“Halliburton would still make money,” she said. “We pay to build things and the Iraqis blow them up. Then we build them all over again.”

A tough girl. No nonsense. Returning to California to take a job in a sheriff’s department in a county east of San Francisco. “We’ll get another President who’ll pull us out,” she said in parting. “Then it’ll start all over again.”

Food for thought for the sleep-deprived mind.


Caveat Emptor!

March 17, 2007

TANSTAAFL – there ain’t no such thing as a free lunch.

 

I’d always thought that John Maynard Keynes coined this acronym in support of one of his free market theories. Turns out that it was Robert Heinlein, one of the strangest science fiction writers to emerge from the 1960s.

The principle is simple. There is an intrinsic value to every product or service and there is an associated economic cost to the provision of that product or service. Whether visible in the price of that product or hidden in the prices of other products, the cost is there nonetheless, and must be recovered if the transaction is to make economic sense.

Caveat Emptor, which literally means “let the buyer beware,” is a sound admonition to the purchaser when the lunch appears to be “free.” Look for the catch. The lunch may be free, but it costs $4.50 to throw away the paper sack and the apple core.

Twice last week, I’ve been confronted by “better deals” that a customer can buy over the internet. The first was from an ad agency, a customer that in the past has consumed a fair amount of time with quotations and required a little handholding when the projects came through. We had quoted postcards. They asked us to meet the price of an internet printer. I passed.

The second incident involved a college student organization that wanted some flyers. The student in charge of the project had come into the store and received pricing for the project, a thousand color handbills. He called back the next day, saying that the price didn’t fit his budget. I gave him a couple of options and finally reduced the price he was originally quoted by a little, simply because I wanted to help him out. His response frankly surprised me.

“Have you heard of Magnificoprints.com?” he queried.

I replied that I had not.

“You can get 5000 of these on manificoprints for $150, and they’ll throw in a free candy bar, too!”

I suggested that he opt for the free Snickers bar, wished him good luck, and told him to call us back if he needed help. Then I began thinking . . . always a dangerous proposition.

The internet printers have been around for a while. Four or five years ago, before the dotcom bust, there was a rush among conventional printers to establish an “internet presence.” Coalitions were formed, venture capital was obtained, grand castles of sand were built and collapsed with the incoming tide.

Most conventional printshops remained “brick and mortar” operations, using the internet for the things that made good sense for their customers. AlphaGraphics, Inc. did an exceptionally good job with this, providing their franchisees (Poor Richard included) with a web presence that included facilities for file transfer, proofing, online ordering, etc.

But now there is a new generation of online printers. At the core, the model for these businesses is not much different than that of “gang run” trade printers that have been around forever. The objective is to achieve economies of scale by combining (ganging) several similar jobs on a large sheet, thereby increasing efficiency, and reducing cost and price. Most conventional printers have relied on this model for outsourcing items like single business cards where price is more important than quality concerns.

The new online printers have enhanced this model with digital printing technology that enables very short runs with little waste or setup cost.From a manufacturing standpoint, the goal is standardization of input, maximization of capacity and mimimization of cost. Relative to a conventional printer, volumes are high and unit costs are low. Margins are very low.

The marketing strategy is blatantly simple . . . low price.

“Why, isn’t this good for the consumer?” you ask. “Shouldn’t we all be buying our printing this way?”

Poor Richard’s answer is “Yes and No,” but (predictably) “mostly No.”

The model certainly works on cheap business cards where either the quality levels are not demanding or the risk is low. AlphaGraphics has depended on a Jacksonville, FL company for years that mass produces business cards. They can produce the blue and red cards for Joe’s Bakery in Macon along with blue and red cards for Flo’s Jewelry in Mobile and Moe’s Body Shop in Kalamazoo for less than what it costs me to set up my press and print a single set. Joe saves money and the outcome is fine, as long as you stay within their paper and ink parameters and the card is uncomplicated.

And there’s the first caveat. The model works for peanut butter and jelly; maybe for a hamburger. It doesn’t work for filet mignon. What’s the risk if a business card doesn’t turn out right? You change it and do it again. Outside of the time required, the cost is certainly manageable, even for a DIY designer who is using KidPix to create the card. But what if it’s your boss’s card? What if it’s the corporate brochure or the annual report that goes to the Board of Directors? What if the event is next week and you don’t have time to do it again?

Poor Richard did a little research this morning. I read the fine print. Here it is:

19. Workmanship Guarantee
Because of the nature of “gang run” style printing ModernColorPrinting.com shall not be held responsible for the following issues which may occur during our production process: variation in color, offset (smudges), cutting variations, marking, picking, cutting issues, size discrepancies (over/under), and etc. Customer acknowledges that they are receiving gang run style printing at a substantial price discount and expedited delivery times and thus said printing will not be held to the same standard as traditional offset lithography nor generally accepted printing standards. While every effort will be made to satisfy our customer’s needs, requests for reprints or credits based on quality issues will not be recognized.

http://www.moderncolorprinting.com/terms-conditions-i-4.html

And some more:

Indeed, VistaPrint takes great pride in its commitment to customer satisfaction. However, certain circumstances are beyond our control and are not covered by the guarantee. Please note that we cannot be responsible for:

  • Spelling, punctuation or grammatical errors made by the customer.
  • Inferior quality or low-resolution of uploaded images.
  • Design errors introduced by the customer in the document creation process.
  • Errors in user-selected options such as choice of finish, quantity or product type.
  • Damage to the products arising after delivery to the customer.

Please preview your designs carefully and correct any mistakes prior to placing your order. In an effort to keep costs down and pass substantial savings along to our customers, VistaPrint does not proof documents created by its customers prior to processing.

http://www.vistaprint.com/vp/ns/customer_care/help/answer.aspx?qid=2,3&xnav=Feature

Most of our customers at AlphaGraphics have reasonable expectations when it comes to their printing projects. I don’t think that smudges, marking, picking, size variations, etc. fall within those reasonable expectations. They don’t fall within my expectations for my customers’ projects. And the best designers that we work with regularly catch minor mistakes at proof. Quality-oriented printers regularly check their customers files for errors and we regularly find them. Over 80% of the files we are given need and receive minor corrections before they are printed. In many cases our customers do not even know that a change was made to allow their file to print correctly.

In fairness, I did find one online printer that I think I might almost be willing to consider. They’re called printingforless.com and their website offers a customer satisfaction guarantee. You’re still on your own with design, but they do provide soft proofs of each job online. You can get a hard copy proof by mail for an extra charge. Their website is helpful and customer oriented.

Guess what? After all is said and done, the prices are comparable to what you can get at your local printshop. For instance, the base price for an 8.5 x 11 trifold printed 4/4 on 80# gloss text is $456.25. That’s 4 days in production + ground shipping from Montana. To reduce the production time to 2 days and ship overnight brings the total to $717.80, right in line with your local printshop who will help you with your art, your proof and probably deliver the job to your doorstep.

One of Heinlein’s more bizarre characters was a human named Michael Valentine Smith, born and raised on Mars by Martians, and rescued back to earth as a young man. From the Martians, Smith obtained a super-human analytical capability, a way of understanding that Heinlein dubbed “grokking.” To truly understand something, in Smith’s fashion, was to “grok” it.

The dictionary definition of caveat emptor is “the axiom or principle in commerce that the buyer alone is responsible for assessing the quality of a purchase before buying.” This means that you, the buyer, must determine the intrinsic value of the deal. To do this, you must understand what you are buying, you must “grok” it.

There’s a lot more to printing than meets the eye. Internet printing has a lot less to offer than low price. TANSTAAFLthere ain’t no such thing as a free lunch. Grok it?


Who put out the Eternal Light of Knowledge?

March 12, 2007

This will be a short entry. Beautiful wife and I just returned from the National Honor Society Induction Ceremony at Perry High School (PHS). It was a suitably solemn ceremony. Honor cords and certificates were awarded to Seniors for their superb academic performance and nearly 50 students were indicted into the Society (not that I question their convictions).

The highlight was the lighting of the Eternal Light of Knowledge, a large candle that was fired up with Eternal matches or an infernal propane lighter or something similar. Three other candles representing Service, Leadership, and Character were then ignited from the Eternal Light of Knowledge.

The ceremony ended with a suitably decorous Pledge to the high minded ideals of the Society. Beautiful wife and I slipped outside to unload some boxes for the theatre department. When we returned, the three candles and the Eternal Light of Knowledge were gone, snuffed out and put away in a box.

Who put out the Eternal Light of Knowledge? Did they have permission?


Risk!

March 12, 2007

Small business is not for the faint of heart.

Sometimes I wonder about my conservative upbringing. I wonder where it went. My father is a saver and an investor. He has owned businesses, but he’s worked for others as well. He’s the type that has always held something in reserve. Like many of his generation, he remembers the Great Depression. There’s always a nest egg, something stuck away in case of emergency.

For years I operated that way. Then came the printshop. Looking back, I can say that I have enjoyed this business. I like the people and the creativity. But there are times when it has been a little scary. Like now.

It’s not that I’m risk averse. You can’t be risk averse in this business. Perhaps it’s just that I’ve grown comfortable (read complacent). Our AlphaGraphics has been on sound financial footing for the past several years. We’ve made a little money, worked down the debt, and continued to grow steadily. We added leased space three years ago and filled it up in a matter of months. Our lease is up in September.

Our current location is a shopping center across from the local mall. It’s all but abandoned. We’ve had a series of poor owners and landlords and the center just sold once again; this time at an auction to the lowest bidder. The new owner came through and said that he was considering turning the place into a flea market. It’s definitely time to move.

So we bought a building. In actuality, the bank bought the building in return for my indentured servitude for another decade or so. The bank bought us a big building — 2 floors and a basement, literally 4 times the space of our current location. It’s an old building, downtown, needing a lot of work. In accordance with my conservative upbringing, I ran the numbers and carefully planned a budget in conjunction with an architect who meticulously pulled numbers from out of the ozone charged ether. We haven’t run out of funds yet, and I’m praying daily that construction is complete before the building account runs dry.

Small business is like a chess game. There is room for an occasional error, but you can’t make too many of them. You can lose a pawn, but it’s tough to win when you lose a bishop and a knight. It’s a game of strategy and to a certain extent, intelligence.

But there’s more than that. It’s not just hope, it’s faith. This is the game that God has placed me in. I’ll play it the best I can and rely on Him to get me through the scary parts.

 

 


Making tough decisions

March 3, 2007

Times were difficult then. We had just started the business. Like many new companies, we had done our homework, put together our plan, and then discovered that the assumptions were all wrong. We were experiencing steady growth, but it just wasn’t enough. We needed every customer that we could get.

He talked a good game. A consultant, he did a lot of public speaking. He needed the usual collateral material, plus stuff for his presentations and occasional postcards and mailers. His message was positive attitude, optimism, and “can do.” He impressed with the not quite casual dropping of familiar names. Large volumes were not exactly promised, but he gave a distinct impression that his business was substantial. When he asked about printing, the words he used were “cost effective, economical, and prompt turnaround.”

We soon found out that he meant cheap and immediate. Our level of service wasn’t sufficient. Pressure was a part of his business style. He expected everything to be dropped for his needs the minute he walked into the shop. Production scheduling was out the window. Design and changes were frequently time consuming, but he didn’t want to pay for it. He was such a great customer that he should get a better deal . . . the price was always too high, and he was not shy about expressing his consternation.

The volumes never materialized. There were a few good orders, but lots more small jobs that disrupted production and cost much more than the revenue they produced. We struggled along for a year or so before he left for greener pastures. I don’t recall what the final straw was, but I suspect it was price. When a local competitor went belly up in 2003, I noticed some of his materials in the shop during the liquidation auction.

I recognized his voice when he called last week. He was shopping. I was cordial. I asked why he was calling us again. Another printer had gone out of business, he responded. He wanted some postcards, not expensive color but black and white . . . economical. Could we do them for him?

“Possibly,” I said.

He recognized the hesitance in my voice. To his credit, he asked the direct question. I answered honestly. He told me to “have a blessed day,” as the conversation ended. I could hear the edge in his voice.

Times are difficult now. It’s been a slow start to the year and our largest customer is reorganizing. We need every new customer we can get. It was tempting to take this one on again with the hopes that things would be different this time. We’re actually pretty good at meeting the “special needs” of our customers.

Then I remembered again and thought about all of the good relationships that we have with our customers. They are relationships based on clear and open communications, honesty, and mutual understanding. We value our customers’ businesses and try to add value with the products we provide them. I think they place a value on our services and the quality of our relationships. I think that they’d be unhappy if we  didn’t charge enough to stay in business.

Tough decision.