Sep 28th, 2001
the bubbleheaded bleach blonde
Comes on at five
She can tell you 'bout the plane crash
With a gleam in her eye
It's interesting when people die
Give us dirty laundry "
- Don Henley, Dirty
only story in the business media these days is the
fallout of the terrorist attacks. Don't fault the
reporters. The editors want more fuel for the panic. All
they want to see on the cover of the Financial Post or
Report on Business is anything that says that the sky is
some of the sky is falling. I won't argue that it isn't
news that the loonie is near an all-time low or that the
airlines are in big trouble. We are definitely on the
front end of a recession. Unemployment will certainly
grow. But, I'll get back to that in a minute. What I am
not happy about is the prevalent use of the WTC and
Pentagon attacks as an excuse or, even worse, as a sales
tool in technology. This is where the media is at fault,
in my humble opinion. Everything is being spun as a
direct result of the fallout of September 11th.
are some recent examples from the technology industry in
the media that make my skin crawl:
- YottaYotta in Calgary announced a $40M financing,
which in this investment climate is a coup. But they
added in a news article that the Post printed, "The
tragic events of Sept. 11 have heightened interest for
disaster recovery and backup systems". The original
investor, Richard Prytula of Technocap in Montreal,
shamelessly added, "You should be able to as a
major corporation be functional at another location
within seconds and that wasn't the case" in direct
reference to the attacks. Interestingly, a news release
from the company's web site one year ago does not
mention "a geographically distributed storage
resource of enormous capability" which is how the
company now describes its core technology. Further
adding to the shamelessness, the company's main web page
features a condolence message. How touching. Seems to me
that they are saying, "Gosh we're sorry you all
died, but it's done wonders for our business."
- The New York Times (and the Post) have published a
"news" piece that claims that wireless phone
companies in the US have increased their ad spending in
the wake of the terrorist attacks because of "the
prominent role they played during the World Trade Center
disaster." The article goes on to describe that
cell phones were used to call loved ones from the
airliners being hijacked and the inside of the WTC as it
was about to crumble. (This is crap, as most of the
calls logged from the planes were from the Airphones in
the seat backs, not cell phones) To their credit, the
wireless companies don't even veil a reference to the
disaster or even to safety in their ads. The news people
are trying to come up with a reason for sudden ad
spending by wireless carriers, which Telus Mobility said
was typical cyclicality. The 4th quarter is the biggest
quarter for sales, which in at any time would not even
be news. But, the editors want the disaster angle...
any story about security technology, biometrics or
military technologies is tinged with the fact that the
terrorist attacks will mean increased sales and profits.
Thankfully, some of these companies are resisting the
urge to publicly be like YottaYotta. Kasten Chase is a
security technology company on the TSE that sells its
solutions to the military. On August 28th, an analyst
said that the $4.20 stock was set for a decline because
of the continuing economic times. On September 25th,
another analyst said that the $5.25 stock (that's a 25%
jump in the wake of the attacks) is underpriced because,
drum roll please, "of the heightened interest in
the wake of the attacks". The company will have
none of that and has no mention of the attacks on their
web site and has not changed the description of its
technology to better fit the sentiment. Good for them.
is a certain folly to all of this sudden interest in
videoconferencing firms and security vendors. In fact, I
would go as far to say that we have a media fed, mini
dot-com/tulip bulb run up in value of any company that
might directly benefit from the horror of September
11th. In three months, none of this will be news. I want
to see the sales in 6 months of many of the firms that
people are speculating will rise dramatically. My guess
is that there will be a blip.
I am not saying that there have not been profound
effects of the attacks on the US and world economies.
There is definite pain. It has been the consumers, fed
by fear and uncertainty, compounded by daily news
reports of more fallout from the attacks, that have
retracted and stopped buying. Consumer confidence is at
its lowest since 1990, according to the U of Michigan
index. That is bad for everyone, because the economy
starts and ends at the consumer.
I am not buying the airline and manufacturing sectors
argument for layoffs completely. The economy was already
in serious decline before September 11th. Air Canada had
already prepared to layoff 4,000 people. The business
traveler, to whom Air Canada's, United's, American's and
Delta's success are directly tied, was already starting
to decline the $3,300 economy ticket to Toronto. Before
any of this happened, the airlines that rely on the
no-Saturday stay, drop of a hat traveler were in serious
trouble. Westjet and other charter or vacation airlines
are not in nearly as much trouble and are not laying off
staff (Air Transat being a notable exception, but their
troubles are linked to causing terror to passengers all
by themselves). No doubt that the traveling public is
more nervous now. But these guys were already in for a
world of hurt and needed to re-think their strategy. Air
Canada can kiss my taxpaying butt for asking for a
handout without cutting a single fare to get flyers back
again. You don't attract nervous flyers back with
continued gouging for less service. Give me a break!
am definitely ranting here. It just bugged me to no end
to watch us all fall prey to our fears, to be
continually fed more fallout stories, when what we
really need is to get back to work (or find work), keep
spending money and put the brakes on this economy. If we
wallow in a kind of terrorism as an excuse, or worse,
terrorism as a sales tool, we will not focus on what we
need to do to get the economy chugging again. This is
different than the 1987-1993 doldrums. The most
significant difference is that interest rates are 4.5%
in 2001, when they were 14.5% in 1991. Unlike 1991, you
can re-finance your debt and spend money because
interest rates are so low. You can lease a car for an
effective interest rate of 3% these days. You can't sock
it under your pillow because bonds pay you nothing. The
stock market is horribly volatile, but it is at or near
the bottom. The deals are out there. Get out and
spend!!!! If we can keep unemployment from skyrocketing,
then we have a chance of making this pain short.
my advice: As long as the news editors want us to read
the Chicken Little crap about the terrorist attacks,
give them the finger and stop reading their bad news. We
already know it's tough out there, but we actually can
make it better by letting go of the fear to spend money.
From Last Time:
Only 48 hours after the attacks, I wrote my last column
and felt that the sky was indeed falling. My about face
today is not related to the overall impact of the
terrorist attack and the fear and uncertainty that it
created, but more to the use of it as a continued excuse
for everything bad. The letters are some of the many
that poured in to help me get back to my optimistic
views of the world:
I personally believe that the people of the U.S. (and I
believe that this might even be the one time in their
history that other countries of the world will actually
provide some physical/financial help to them) will make
it a priority to have their businesses flourish - and
not only quickly, but obviously. If they don't, these
madmen have won. And that is something that cannot even
be perceived to have happened. It is as vital to the
U.S. to be 'up and running' in spite of what's happened
as it is to stop the lunatics who attacked the last
remaining super power on this earth.
When the mayor of New York told people to "go out
and spend their money" - he wasn't just trying to
find something for people to do while they waited to see
if there were any survivors. I personally believe there
will be an enormous injection of personal and corporate
wealth pumped into the arteries of this great nation.
My love and prayers to all!
Well Caroline, you will see that my
sentiment and Rudy Guliani's are now aligned. Yours was
the first letter that caused me to look at this whole
tragedy differently and I appreciate it. The slap in the
face was needed.
Just read your latest column today. "It seems so
trite to even discuss business at a time like
this," you said. I can't agree more. For a few days
straight I had trouble concentrating. Thinking about
what to do with my career seems so trite compared to
explaining to some school children that their parents
will never come pick them up...
Fortunately, in the midst of darkness we see light, as
manifested by the bravery of the rescue workers, the
generosity of volunteers and donors, the unity among
strangers to help each other... a couple of my friends
would have been hurt/killed if the strangers on the
streets didn't give them a hand at just the right time.
This was even closer to you, it sounds
like, with the brush with death of some of your friends.
Two weeks later, the time to wallow is definitely over
and for most of us, time to move forward. For those
closer, they will never fully recover and a piece of
their lives will remain incomplete. The memories of
their loved ones must be maintained… and it will.
For you, my friend, a plug. Alan is a brilliant
combination of engineer and marketer. He would be a good
addition to any team in software or software services.
E-mail me and I will connect you to him.
Thank-you for not leading with anger and identifying
with the victims, so many victims.
These events touch/affect everything in our world
[especially business] and I want to see/read/feel that
it has touched everything.
Ummm... the anger spilled out today,
sorry. But I am angry only at the stupidity of
prolonging the fear. Thanks for the support.
I wanted to thank you for your eloquent column. We are
indeed in "a new world". I used to work for
Redback...before the meltdown. Tuesday found me calling
my American friends to ensure they had not been working
in silicon alley. Thankfully, all are safe...saved by
such ironic luck as "had my meeting last week"
and "training was postponed till October".
I am very sad.....even 1 week after. But you know...it
will be BC techology that will help the world adjust to
its new reality. It will be the Ballards, the
videoconference companies, the data companies, etc. that
will reinvent how business is conducted around the
I agree with you wholeheartedly,
Sharon. It might appear that I picked on the
videoconferencing companies this week, but I am angry
only at the inane promotion in the media.
Videoconferencing business will increase, but only
slightly. People will still need to travel to close
deals, attend trade shows and visit subsidiaries. I'm
glad your friends were OK.
Well, perhaps there are a few optimistic crumbs coming
out of the horrific events of last week.
-crumb 1: people are pulling together
I subscribe to a project management mail list and there
have been postings from all over the world expressing
their grief and sorrow. Managers from Turkey, Taiwan,
Norway, South Africa and of course Canada (just to name
a few countries). We all have had a major
"reset" as to what is REALLY important. (And
it's not the value of the stock but the contributions we
can make to our societies and communities.)
-crumb 2: information systems are going to be even more
Perhaps this is a little cynical but, hey, you gotta
keep track of the bad guys some how -- no? Also, with
air travel a much less viable option (probably for the
long term) video conferencing, streaming video via the
web and similar technologies are going to become more
important to geographically dispersed companies. Perhaps
there are investment opportunities here (maybe even jobs
for a few of the newly unemployed).
I am grateful for what I have and I'm asking myself ...
what can I give back?
As I mentioned today Heather, you can
start by being a consumer and not being fearful. A
strong economy is needed to lift all boats and give us
the ability to reach out to those less fortunate, be
they in Afghanistan or Hastings St. East. As I mentioned
above, you are right about videoconferencing. Don't feel
as though your sentiment about information systems is
different than mine. Once again, I am shooting the
messenger in my rant above, not the message.
I really related to your recent article - www.bctechnology.com/statics/bh-sept1401.html
personally was remaining optimistic and hoping for a
quick turn around in not only the high tech market, but
the whole economy.
In light of this new "reality" that things
aren't going to turn around tomorrow, or anytime in the
immediate future. I'm afraid for my business which has
taken the life blood of may partner and I to build over
the last 3 years. I'm afraid for our staff and their
families who depend on steady work from us. I'm also
afraid for everyone's safety in both Canada and the US,
which is something that didn't seem possible here until
a few days ago.
It is safe to say North America has lived in a bubble
for the last 40 years, and that bubble has just burst.
For individuals of my generation the worst events of war
we have seen encompassed smart bombs and SCUD missiles
that were being fired thousands of miles away during
Desert Storm. This is different. It's in our back yards.
It is an attack on our way of life and an attack on our
security as civilians. The targets are symbols of
freedom and economic power and the enemy doesn't even
have the guts to claim responsibility for their actions.
Worse than my fear of another surprise attack is my fear
of President Bush's undiplomatic and rather bullying
tone on the world stage. This isn't a western cowboy
movie and Bush's threats to bring people in "Dead
or Alive" are as uncalculated as the chants of
Muslim Fundamentalists in the Middle East calling for
"Jihad" against America. Clearly there is a
much bigger underlying problem where we, in our bubble
of North America, fail to recognize how we are portrayed
by the millions of people in the Middle East who don't
see us as people of freedom and democracy, but see us as
greedy capitalists who are trying to protect our own
interests (mainly oil) at all costs.
I think people need to look at little harder at what
we're fighting. The US needs to change the way much of
the world views them and they need to find new ways to
reverse the propaganda that self serving leaders in
other nations feed to their people. These people don't
tune into CNN or surf the net for information. They get
told that the capitalists are "attacking
Islam" and they all take up arms to protect their
faith. What we need to do is show them that we are not
making a martyr of them and that we are peaceful. The
problem is having the President of the US going on
national TV daily, swearing to hunt down and kill
terrorists is suggesting to these people that we are
ruthless. I agree that we need to do something about
these terrorists, but I think it could be done with some
humility and grace. Diplomacy is the only way to succeed
in this kind of a situation. This is something Mr. Bush
needs to work on.
As for everyday life in Canada, everyone is speculating:
"Will we go to war?" "Will there be a lot
of casualties?" "What will this mean to
us?" "How will it affect our lives?"
Issues like this make last year's market correction look
like peanuts. Yet we still need to get up and go to work
everyday and just hope that those few people we elected
to represent us on the world stage are capable of
guiding us through these frightful times. I don't think
Canada would be a likely target for the type of
terrorism that we have seen recently, but I do agree
that we may well be affected in the event of a nuclear
or biological strike.
Given our global reputation as the "Nice Guys"
I hope that Canada remains true to it's roots and tries
to encourage more unification and acceptance of all
ethnicity's on a global level. In business life we will
still continue to pursue more business in the US and
abroad and we need to fight to ensure that the few
madmen in the world don't drive us into our own
isolation. That is what they want, and we shouldn't let
our borders cease up because of them.
My advice for all of us out there trying to get ahead in
this struggling market is to keep pushing the limits on
our technology, keep it advancing and we will all
realize the benefits that are there to be gained. We've
all preached about how our technology can change the
world, and now we have to prove it can change it for the
Times like this need to make us even more appreciative
for what we have. You simply can't sit back and let
someone else decide when the markets ready for business
Like said, good column.
There were a few comments as to the
whole situation like Thomas' here. This was the most
eloquent and least provocative (other share different
views on what response should the US have, etc.). What I
noted was the mention of fear. I felt the same way in
the days immediately after. I do fear the ramifications
and the response of more terrorists. I fear the crop
duster spreading anthrax and get very angry thinking
about the madness of people that would consider such
atrocities. But our way of life is not under attack
unless WE deem it to be. They cannot keep us from
returning to work. Fear needs to move aside and work
needs to continue. Thanks for the great thought Thomas.
What Do You Think? Talk
Back To Brent Holliday
Something Ventured is a bi-weekly column designed
to supplement the T-Net British Columbia web site with
some timely, relevant and possibly irreverent insight
into the industry. I hope to share some of the
perspective and trends that I see in my role as a VC.
The column is always followed by feedback (if its
positive or constructive. I'll keep the flames to
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