Part 1: Entrepreneurs, Macroeconomics, Transaction Costs, and eBay

A couple years ago, I finally made the switch and moved from a big desktop computer to a shiny new MacBook Pro. Apple sold a powerful model with a 17″ screen so I thought “Great, almost the size of my old screen, fast, great battery life, what’s not to love?” After a couple dozen trips taken over the next year, love faded: 6.6 pounds felt like 36.6 pounds. So I decided to sell it on eBay and boom, it sold for more than 80% of the purchase price. Other pieces of electronics have sold for similar prices. Most electronics, even if returned within 30 days, have a 15% restocking fee, so how can eBay perform so well?

Since I am very familiar with microphones, here’s an example of a “commodity” microphone, the Shure SM57. Rockers for the past few decades have relied on this model consistently and Shure, true to their name, has made sure that it always sells for $99 new so it is a good example. So what are people willing to buy this for on eBay? One lucky seller (me) got $81.

This made me think about macroeconomics. I had a wonderful economics professor while doing my MBA who is an entrepreneur at heart, but was slumming it for awhile between startups as a professor. We definitely lucked out with her. During one session, she gave a great lecture on transaction costs using eBay as an example. It turns out that transaction costs are one of the factors that can have a huge impact on entrepreneurial projects, marketing, sales channels, and major strategic decisions. More to come in the next post.

Public Wifi – The Good, the Bad, and the Ugly

I took a trip to the San Francisco Bay Area last week for a project. As with any travel, there are blocks of free time. Also as usual, there were many things to do online and almost everywhere had free WiFi available including airports, coffee shops, and the hotel. Since I have so many points on Southwest, they even provided free WiFi on the flights. All the free WiFi hotspots were “open networks.” Those are the networks that don’t have a little lock symbol by their names and you log in using a separate webpage. The airport hotspots had ads, “watch this short video and get 30 minutes of free WiFi.” This was great, it all worked well, but what about security? How public is public Wifi? The lack of security on free public WiFi has been in the news regularly in the past year.

  • Fox News –
  • eWeek –
  • InformationWeek –

These articles are basically correct. Personally, I use a Virtual Private Network (VPN) on any Public WiFi while traveling. There are several good companies, some are free, but I prefer to pay for Witopia because they seem to be the most reliable. But Southwest airlines WiFi didn’t work while connected to the VPN. Was it worth the risk to get some work done? Could somebody on my Southwest flight see my email password on this “public” WiFi? This required some complicated research to determine what was really going on technically. Once I returned, I installed a WiFi data capture program on my laptop and  looked directly at the data my iPhone was sending and receiving.

The results were fascinating. The common iPhone apps I use while traveling did actually encrypt the data. Even if somebody captured the WiFi data on the flight, they would not be able to see my passwords. These apps included Mail, Flipboard, Google+, LinkedIn, Twitter, Facebook, and Tumblr. Logging into certain websites with Safari was a serious problem through since passwords were sent over the public WiFi for anybody to see. The only exceptions were websites where the HTTP part of the address was replaced by HTTPS which stands for “HTTP Secure” connection. If I logged into my email through webmail and the address was HTTP and not HTTPS, anybody could capture my password. This was obviously not good.

To summarize, public WiFi is a great convenience, but be careful. It is best to use a VPN connection. Do this by connecting first to the public WiFi hotspot, logging into the hotel or airport website, then once the connection is established, start your VPN software. To find a good, free VPN provider, just do a Google search for “free VPN” before you next trip. You can then enjoy that free public WiFi in comfort and safety.

Creating Your Own IOS or Android App

About a year ago somebody said to me, “Hey, wouldn’t it be great if there were an iPhone app to do XYZ?” I thought this sounded interesting, so I downloaded Apple’s free IOS app creation software and started reading Apple’s very good documentation. Apple made it clear that I needed to learn Objective C, the app programming language, but that wasn’t too hard. I then started programming and the documentation began to describe the details of IOS app programming: the model / view / controller design pattern, instance variables, methods, message objects, inheritance, encapsulation, ugh. It was about then I realized my brains were pushing my eyeballs out of my head, so I stopped. What was my problem? This was Apple’s “easy” programming environment and tons of people were creating apps. Why couldn’t I?

The answer was that “the easy way” is easy from a programmer’s perspective since writing a program for a modern computer with a multitasking, multithreaded graphical operating system is hard. I researched this. It is hard like rocket science is hard.

Enter the genius programmers over at Buzztouch who decided to make a website to help the rest of us create apps. There are still design challenges, but no messy code. You create each screen of your iPhone app on their website using their “plugins” and then their website creates the complicated code for you. It is pure genius!

They didn’t stop there. The website contains hours of video tutorials, a forum where users can help others users, and a very clever point system that allows “power users” to gain credibility as they help others. More points = more credibility so everybody knows who the real experts are. The experts get exposure for their skills and I’m sure some of them get paid jobs this way. They even have a showcase for great apps and help people promote their apps on the Apple AppStore.

Below is a screenshot of their tutorial app built for a harbor in Monterey, CA. In five minutes, they demonstrated how to create an app that can either provide a map with driving directions to the harbor or send an email to the Harbor Master with a single tap. In all fairness, you do need to watch a couple hours of tutorials to create anything more than the simplest app, but Buzztouch is still a breakthrough. If you need more help, their forums contain thousands and thousands of questions and answers. People are definitely using their product. So if you have a burning desire to create the custom app you have always dreamed about, this is your chance, and you don’t even need to know the difference between a method and a message, whatever those are…

Buzztouch –