In our machine tool business we routinely order a standard part that comes in many sizes. The company we buy from, a world famous company, is known for its reliability and quality — but not for its speed. It always quotes us three weeks for non-stock sizes (even though it sells variations of the product every day), and I always wonder, why?

I wonder how many sales they squander because of their rigidity. The company’s brand is literally sterling on silver, but they seem to take their customers for granted. We order their products, usually for resale, and the 3-week policy often deters our clients. Desperate customers who can’t afford to wait resort to purchasing used or surplus parts, borrowing the parts from friends, or EDMing their own.

I marvel at the rigidity and complacency exhibited by this company. It is inviting nimble competition in a core product line by thinking that its brand loyalty will last forever. Is three weeks always necessary to deliver?

It really bugs me that the 3-week delivery is cast in stone — it’s virtually biblical. Don’t question it.

Then I think about FedEx and UPS, which will deliver overnight from Seattle to Miami if one is willing to pay the price. I think about Amazon Prime, which allows Amazon customers to pay a $79 annual fee for 2-day shipping on millions of items, with no minimum order size.

In fairness, the company does offer an expedited product in 10 working days (at a 50% premium!). However, it doesn’t promote this service, and the expediting is subject to “production scheduling.” The last time we ordered parts I had no idea that expediting was possible until it was too late.

Question: Does a bigger customer deserve a better delivery time?

Jan Koum: Founder of WhatsApp, app sold to Facebook for $19 billion

Connecting the dots …

Jan Koum, an immigrant from Kiev, Ukraine, sells his five-year-old company, WhatsApp, for $19 billion to Facebook. Ukrainian people overthrow Viktor Yanukovych, a corrupt dictator allied with Russia and Vladimir Putin. Democrats make income inequality and minimum wage law reset into campaign issues. Republicans put immigration change off the table for internal political reasons going into 2014 elections. Luxury buses traveling from San Francisco to Silicon Valley become a political issue. Vivek Ranadivé becomes lead buyer of the Sacramento Kings NBA franchise.

Jan Koum came to the U.S. in 1992 as a 16-year-old with his mother and grandmother with no money. They settled in Mountain View, California, in a tiny apartment paid for by a Jewish philanthropic group in the Bay Area, set up to help Jews leaving anti-Semitic Russia and Ukraine. A few years earlier, Sergey Brin, co-founder of Google, had come to America for similar reasons. His father had been kicked out of his university teaching job because he became a Jewish Refusenik in Moscow.

Koum’s mother eventually fell ill with cancer and the family had to survive on food stamps. Koum developed a passionate interest in computer programming and attended San Jose State University. He then got a job at Yahoo!. He left Yahoo! in 2007 with his friend, Brian Acton, and went traveling for a year, playing a lot of Ultimate Frisbee and thinking about a new company to start. He had friends and family spread across the world in Ukraine, Israel and South America. He saw an opportunity to create WhatsApp, a cheap messaging app that would be difficult to trace and insure privacy for people in places like Russia and Ukraine.

Facebook announced it was purchasing WhatsApp for $19 billion on February 19. The app was reportedly used by many people in Kiev during the rebellion that culminated in Yanukovych leaving office last Friday.

When Jan Koum was looking for venture capital, he connected with Jim Goetz of Sequoia Capital, which put up the money for early development. They often met at Red Rock Coffee in Mountain View, around the corner from the government office that helped sustain Koum’s family with food stamps. The baristas that served him were making $10 an hour, but if they were working for primarily tips, the minimum wage was $2.31 per hour. The controversy over raising the minimum wage and the bigger argument over the gulf between the rich and poor and the rich and middle class in America is sowing the seeds of a national sense of resentment. The minimum wage is all over the map. For a disabled person working in a sheltered workshop it is $2.50 per hour. It is $4.76 per hour for tuna canners in American Samoa. The minimum wage in 1968 is worth $9.40 today, and the $5 per day that Henry Ford instituted in 1913 is the equivalent of $14.71 per hour today.

Personally, I think the country would be better served with a $10 minimum wage, though we would see fewer fruit pickers and maybe higher priced fries at McDonalds. Perhaps there would be fewer workers, too. I doubt it would do much one way or the other for employees at Starbucks and Red Rock Coffee.

We hear the Republicans cannot get their act together to pass immigration reform because it might hurt Mitch McConnell in his re-election bid in Kentucky. A guy like Mark Zuckerberg will give big money to Chris Christie and Corey Booker, a Republican and a Democrat, because immigration and education reform brings in people like Koum from Ukraine, the family of Zuckerberg’s wife, the Chans, from Vietnam, and the vast talent needed to fuel Silicon Valley firms like Facebook. The Republicans lost the Presidential election in 2012 because Mitt Romney stupidly alienated immigrants and received 29 percent of the Latino vote. When will they ever learn?

Meanwhile, the Googles and Apples and Intels are running luxury busses from San Francisco to Silicon Valley to bring in the folks who no longer can afford to live in Koum’s Mountain View, but not to bring busboys and floor sweepers making low wages. It is symptomatic of the economic divide that includes the war veterans of Iraq and Afghanistan, who often come back with few marketable skills. Jan Koum’s firm, WhatsApp, has 55 employees. He doesn’t need busses, yet.

The Ukraine and India seem like exotic, faraway places. But if you go to Silicon Valley, you see a place filled with a lot of people who have struggled to come there, whether they are the Jews who lucked out of Ukraine and Russia, Mexicans doing the tough jobs others put up their noses at, or the intellectual elite of India who seek a place where their smarts will be rewarded, such as Vivek Ranadivé. Ranadivé came to the U.S. with $100, talked himself into MIT, and today is the majority owner of the Sacramento Kings NBA franchise.

The people of Ukraine want a chance. Today they know WhatsApp in the world.

Question: Would a $10 minimum wage have a positive effect on your business?

People sitting around doing nothing

In January, I vacationed in a Latin American country. I won’t name the country out of respect for a few friends who were offended by me singling out people from their nation.

My trip was wonderful. I went to the beach, danced a lot of salsa and most importantly got to know a lot of the native people. I found the people there intelligent, outgoing and warm, but the more time I spent with them I noticed a distinct trait — they were very “talented at doing nothing.” As I walked the streets, I often saw many people standing outside their doors simply watching time go by. Maybe they were playing dominoes or making small talk with each other, but other than that — nothing. When I use the word “talented” to describe this trait, I’m not saying it entirely tongue and cheek. “Doing nothing” truly is a skill — a skill that I am poor at.

My intention is not to accuse the people of this country or any other Latin American countries of being lazy and unproductive. Maybe many people there are lazy and have no ambition. Perhaps they have no money to participate in stimulating activities. That’s not my point. Sitting around, not doing much of anything is the cultural norm over there, and the more time I spent with the locals, the more culture shock I experienced.

I stayed the first two days of the trip with some friends who ran a bed and breakfast in a sleepy beach town. I was aching to go see some tourist sites, go to the beach, or even just go for a run. But I also wanted to spend time with my friends, and they mostly just wanted to sit around the house. I had no cell phone, no Internet access, no TV and my Spanish is slow and mediocre, which made conversation an effort — although at times a fun challenge. I felt awkward in the idleness. I felt frustrated because I was squandering my precious vacation time to “do stuff.” But then I forced myself to relax to some extent and go with the molasses-like flow. I realized that “doing nothing” was an important part of truly experiencing their culture, so I stopped fighting it.

I think most Americans have trouble doing nothing. For me, stimuli from either work or entertainment are a constant consumption, on par with water. If I’m alone at a restaurant, if I’m waiting for a bus, if I’m in the bathroom, I’m probably reading something — a newspaper, my computer, my phone. In the car, 99 percent of the time I’m listening to an audio book or music. After work, I usually go work out, then do some work or watch TV. In this scenario, I am classifying watching TV as “doing something,” because the native people on my vacation seldom watched TV.

After spending 11 days with virtually no Internet, newspapers, or TV, I feel slightly more patient with mundane, empty time. Only slightly more patient, but at least I’m aware of the constant stimulation I crave and take for granted.

Question: Could you be happy without TV and Internet?

I am a global warming (GW) cynic—not a total skeptic, nor a true believer. I am cynical because I know what motivates many of the people involved—what else, money. I know the hypocrisy of those who talk tough about others’ requirements, but renege on their own actions. And I know that this is a rich world’s problem that may be laid on the backs of the poor.

In McKenzie Funk I’ve found a fellow traveler. His recently published, Windfall: The Booming Business of Global Warming is about people looking for an opportunity to profit off GW. Whether there is a real crisis or not, it doesn’t matter. Making money is the objective. Their legions are many—wind and solar manufacturers, oil and mineral companies, seawall builders, bottled water companies, genetically modified seed producers, and inventors and patent holders in new technologies like geoengineering.

Funk cynically notes the first big GW financial success was Al Gore’s movie, The Inconvenient Truth. While the movie was not much more than a power point presentation, it grossed about $50 million. In full disclosure, from 1997-1998 I served on a committee chaired by Gore to determine a ballpark estimate for the U.S. to meet the Kyoto Treaty. The total estimate was between $500 billion and $1 trillion per year (about 3-6% of GDP). That’s enough of a tax to throw the economy into a severe tailspin. This is the real “Inconvenient Truth” that stalls significant emission reductions in the U.S. and around the world. The immediate cost is far too high, and the savings are much too far into the future.

That is why I am a cynic. Many countries talk tough, but waffle when their economy is impacted. The European Union’s recent backdown from their self-imposed 2020 requirements is a perfect example.

So, what are we to do about climate change? After examining many alternatives, Funk points to geoengineering as the answer—seeding the stratosphere with microscopic sulfur dioxide particles to shade the sun’s rays—but the potential downsides gave him cold feet at the end.

To write this book, Funk spent six years traveling the world, talking to creative people. Among them was Bill Gates, whose foundation has spent billions on disease eradication and genetically modified (GM) seeds but has not spent a penny on mitigating carbon emissions. Gates believes the best way to address climate change is to help poor farmers adapt. “A stalk of GM rice is just like a seawall, and far more cost effective” he said.

Funk visited Nathan Myhrvold, Microsoft’s former chief technologist and current CEO of Intellectual Ventures (IV). Intellectual Ventures is working on geoengineering and patenting methods to stop hurricanes, refreeze the Arctic and cool the Earth using sulfur dioxide aerosols. The idea is to simulate the effect of large volcanic eruptions. This phenomenon was first observed by Benjamin Franklin in 1783 when he was stationed in Paris and severe Icelandic volcanic eruptions caused temperatures in the Northern hemisphere to plummet. The Mt. Pinatubo eruption in 1991 in the Philippines was the most recent example. World temperatures fell by about 1 F for a year after Pinatubo. Newt Gingrich, before his 2012 presidential run, echoed the sentiment in his campaign literature when he said, “Instead of imposing an estimated $1 trillion cost on the economy, geoengineering holds forth the promise of addressing GW for just a few billion dollars a year.” Myhrhold has now attracted funding from the Gates Foundation.

Funk points out that climate activists strongly oppose a broad set of solutions. They have the one solution—cut back, live lightly and go renewable. They believe everyone must do with less.

That solution is impractical, yet adherents preach it like a religious ideology. They say global warming is God’s punishment for the world’s population growth and profligate life style of its inhabitants.

Myhrvold stated that the strategy of relying only on emissions reductions was particularly burdensome to the poor, who cannot afford to do much. Asian countries want industrial development to move out of poverty. I don’t know how one can morally or physically stop them. Africa’s people live on the edge. Right now they are starving and dying of malaria, dengue fever and other diseases that could be alleviated by a fraction of the amount the rich world wants them to spend on ameliorating climate change. It’s clear the poor and hungry don’t have the same priorities as the wealthy elites.

Funk concludes with a discussion of magical thinking—namely that a growing belief in the impending cataclysm of global warming will lead to a real worldwide effort to stop it. But all he sees in reality is a bunch of entrepreneurs looking for short term gain.

Question: Does climate change worry you?

Onlookers snapping shots on the Royal couple’s wedding day, 2011

The do-it-yourself wedding photography approach asks wedding guests to take pictures with their phone cameras or digital cameras, email them to the bride and groom and let them edit the photos for an online or printed album.

Is this a better approach than the traditional wedding photographer who poses the family and walks around shooting candids, and then charges a small fortune for the finished product? Maybe a great wedding photographer can come up with a few unforgettable images which frame a memory of the historic event. But the potential of the guest photo shoot approach, if you can really enlist friends and family in the effort, is sensational. And the price of the product is a fraction of the pro’s work.

This idea of forsaking the “expert” by using new tools available to the masses has interesting ramifications in business.

This week I have been analyzing our machinery business’s performance last year, and two glaring expenses leaped out at me, accounting and insurance. In both cases we relied upon big firms with good reputations. They let us down with big fees and mistakes.

On insurance, we changed Workers’ Comp firms and the new firm doubled our rate after one year, without any reason. It took the credible threat of a lawsuit to extract us from their clutches. Our insurance brokers just threw up their hands and left us to fight with them. They did not offer to mitigate our losses resulting from placing our business in the hands of an unscrupulous firm.

Our new national accounting firm won our business by telling us an amount to expect to pay for their services. Their fees came in three times their estimate, partly because they forced us to redo everything because they messed up which year to put certain sales in. We had to pay extra because they misunderstood the way we identified the sales dates of machines.

Now I am wondering if we should dump the experts who failed us badly last year. I am considering hiring consultants for insurance and accounting to advise us on how to do them ourselves. The CPA could put their name on the financial statements for our lender. I think we could save major money, but I wonder what you folks think. There is a lot of good software and data to help us on this.

On the machining front, I see many companies bringing work in-house that they had thought was beyond their expertise. With good machines, tooling and support, they can take control of vital processes from distant suppliers in China.

I take a cue from our lawyer, Russell Etheridge, a solo practitioner in Detroit who has helped us out of many legal hassles over 20 years. He operates without a cumbersome, expensive staff and pursues a common sense approach, not a legalistic one. I think he is ahead of his time.

Question: Do you prefer to work with small firms or large firms?

Courtesy of “The Chicago Tribune.” Diana O’Connor poses Tuesday in downtown Chicago. Even with a Teacher of Distinction award from Golden Apple, she has been unable to find a teaching job.

Diana O’Connor, a high school music teacher in Suburban Chicago, had the best of days and the worst last February. She recounted it in an excellent column by Mary Schmich in yesterday’s Chicago Tribune.

O’Connor received a letter in the mail a year ago saying she was a finalist for the prestigious Golden Apple Award, which is given to a few of the best teachers in Illinois every year. Tucked into the same batch of mail was a letter from her school stating that she had been fired from her job at Lakes Community High School in Lake Villa.

The column denoted O’Connor’s difficulty in finding another position as a high school music teacher, a job she loved, despite her noteworthy accolade as a Golden Apple finalist. In the article, Schmich quoted many of O’Connor’s peers who gave her glowing praise.

My wife Risa read the article before I did and gave me the gist of it. My reaction was that of a hardened cynical boss who had seen many washouts with good reps. ”I wonder what’s wrong with the woman?” I said. “There are always people looking for somebody good.”

Diana O’Connor has now been out of work for a year, and her unemployment benefits are running out in a few days. She is recently divorced with two teenagers at home. She gets child support from her ex-husband but is now filing for Medicaid. But my response was a hard-hearted “what’s wrong with her?”

In the machining world where I live, know-how, experience and peer recognition are highly valued. If she was a setup person with 25 years in the field, or a journeyman mechanic, or a sophisticated quality consultant she would be snapped up in no time — unless she had a history of job hopping or union organizing.

The Tribune columnist implied that O’Connor has had difficulty finding work because she is 50 years old — and is perhaps expecting a high salary because of extensive work experience. In my world, experience is gold and highly sought. I’d be shocked if it is not prized in the teaching field, but am I wrong?

I recently hired a highly experienced and fully vetted person as Graff Pinkert’s office manager. I was looking for an “adult,” a seasoned veteran who was sophisticated in business. I felt fortunate to find such a person. So when I read the Tribune piece about the award winning teacher who cannot find a job, my antennae perked up. I was perplexed and a tad cynical.

I am interested if you find her story emblematic of today’s job world and troubling. Or is your reaction similar to my own? What’s the rest of the story? What’s wrong with her?

Question: Are you skeptical of somebody who’s been out of work a long time?

Whitney Houston’s Legendary “Star-Spangled Banner” at Super Bowl, 1991

The over-under line on the length of “The Star-Spangled Banner” at the Super Bowl by opera star turned pop singer, Renee Fleming, is 2 minutes 25 seconds.

It’s the Super Bowl. Everything is a hustle. Denver by two.

Earlier in the week, Pete Seeger, the wonderful American folk singer, died at 94. Could you ever imagine Pete (“If I Had a Hammer,” “Where Have All the Flowers Gone”) singing “The Star-Spangled Banner” at The Meadowlands?

Funny thing. I love the Super Bowl, with its $4 million a pop ads, and I love the old lefty guitar picker, Seeger. They are both my America, at its pure and phony best.

The Super Bowl has become our winter July 4th. It’s a pageant, a day of parties and pigging out and a celebration of the Flag and what we love about the country. It’s patriotism, bimbos, gambling and quarterbacks rolled into a piano roll of clever and terrible TV ads we forget instantly. It’s America, Baby.

The Super Bowl retains its authenticity because it is still a football game with phenomenal players who go all out to win. Quarterback Peyton Manning versus defensive back Richard Sherman, the Stanford thug. Manning, who improvises every play at the line, risks his mended vertebrae on every snap. Sherman is a bright guy who plays like a maniac.

Which brings me to Beyoncé. She has sung some nice National Anthems, but I cannot forgive her for lip-syncing the “Star-Spangled Banner” at the Presidential Inauguration in 2012. So what if you miss a note or flub a line like Christina Aguilera did at the Super Bowl in 2011, as long as you give your all. When you fake it as Beyoncé did, and then ask the Marine Corps Band to cover your lovely behind, that offends me.

The “Star-Spangled Banner” is a challenging song with somewhat archaic words about the War of 1812. But if you are going to take the credit and the cash Beyoncé, go for it. On the opposite end of the spectrum, I marvel at Sam Cooke on his Copacabana Live album singing “If I Had a Hammer,” when he mixes up two verses and then laughs as he keeps going. At the Super Bowl, the Inauguration, the World Series there is no do over, and there are also no excuses.

I asked Noah for his opinion on the greatest National Anthem performances. He immediately said Whitney Houston, at the 1991 Super Bowl. We played it on You Tube. Fabulous. That was going ALL OUT.

Another memorable performance of patriotic music that comes to mind for me is Ray Charles singing “America the Beautiful” in the second game of the World Series following Sept. 11, 2001. The purity of the visual images brought to life by the remarkable blind performer always gives me chills. Jose Feliciano’s unique “Star-Spangled Banner” at the 1968 World Series also stands out for me.

Queen Latifah is doing “America the Beautiful” at The Meadowlands this Sunday. May she play it straight and sing from the heart. We deserve her real best.

Question I: What is your favorite National Anthem performance?

Question II: Denver or Seattle?

Watch Whitney Houston’s 1991 Star-Spangled Banner Performance

Watch Leslie Nielsen’s Star-Spangled Banner Performance in the Naked Gun

Poster Commemorating Kalashnikov at Shot Show in Las Vegas

Last week, I attended the Shot Show in Las Vegas, one of the largest gun shows in the world. I went with Rex Magagnotti, my coworker at Graff-Pinkert, intent on selling multi-spindle screw machines to exhibitors and getting a good scoop for Today’s Machining World.

One of the more surprising things I saw at the Shot Show was a commemoration of the late Mikhail Kalashnikov, the inventor of the AK-47, who passed away in 2013. Several portraits of him were placed throughout the show and the Arsenal/K-Var booth had a special display honoring him. The homage to the Russian Lieutenant General is a true sign of the times. Evidently, the generation planning the Shot Show did not feel the baggage of the Cold War. The displays seemed odd to me, as many people today see the AK-47 as a representation of various enemies of the United States. It is the weapon of choice for many terrorists worldwide and the scepter once waved by Osama Bin Laden. The Shot Show appeared to be a venue comprised of many Right Wing, outwardly patriotic Americans. The room was packed with law enforcement, military and ex-military folks, who I wouldn’t have expected to be so rah rah for a Russian. But evidently, a lot of people have relaxed about old politics, giving them open minds to appreciate the genius of the AK-47.

I was ignorant about the significance of the AK-47, so I asked a rifle expert at the show to explain to me why the weapon is so special. In 1947, Kalashnikov invented the AK-47 (hence the number 47), which in 1949 became the standard issue assault rifle for the Soviet army. Unlike most guns before and after its conception, the AK-47 was comprised of parts with very loose tolerances. Logically, the gun had less accuracy than other rifles, but its simple design with sloppy parts made it durable, cheap to produce and easy to operate.

The gun was designed for battle, as it could be thrown on the ground, get wet, be covered in grass and mud, yet keep on shooting. U.S. soldiers in Vietnam have recounted picking up AK-47s that had been lying in rice patties for days and then operating them with no trouble. The gun’s loose tolerances and simple design have enabled people in third world countries to purchase them for as low as $10 and learn to operate them quickly. Novices may not be able to aim the AK-47 well, but the gun isn’t the most accurate weapon in the first place. It’s a good gun for spraying a lot of bullets, some of which will eventually hit something.

As Larry Kahaner, author of AK-47: The Weapon That Changed the Face of War, once blogged, “[Kalashnikov] often found himself guided by the words of arms designer Georgy Shpagin, who developed the successful PPSh41 submachine gun: ‘Complexity is easy; simplicity is difficult.’“

Question: Does owning a gun make you feel safer?