Sprint Offers Free Service To Students

Sprint is the nation’s third largest mobile carrier and wants to add to its 54M customers and $35.3B revenue from 2012. It currently lags behind AT&T and Verizon in data speed in addition to revenue and customer base.  

In a transparent attempt to gain market share on Verizon and AT&T, Sprint announced high school and college students can get 12 months of service for free. If a high school, vocational, or college student buys a phone at a “student activated price” and signs up for a new line of service under the “Unlimited, My Way” contract plan at Best Buy, the student can get one year of service on the house. This contract includes unlimited talk and text, but only 1GB of data. Students can upgrade to an unlimited data plan for $10 per month.

The offer lasts from November 18th to January 4th and is done under the pretense of benevolence. Sprint describes the promotion as part of its attempts to further education efforts, and acclaims their commitment to schools, students and teachers. This initiative sounds nice, but is likely only going to lead to more texting in classrooms. (Although you can read their spin on it here.) It seems clear that Sprint is working to capture young customers before they choose AT&T or Verizon. I like the business tactic, but Sprint’s marketing department should have held a focus group with some teachers before branding this promotion as educational. I would wager smartphone use in class is in every teacher’s top 5 biggest pet peeves. It certainly was in mine. 

Follow me on twitter @Aaron_Kraus

Reading Faster: A Primer on Speed Reading

As you’ve probably picked up by now, I’m a huge advocate of reading and I enjoy just about everything and anything I can get my hands on. Between news articles, blog posts, and novels spanning genres in nonfiction and fiction, reading takes up much of my free time. At work, I’m often responsible for reading, understanding, and editing lengthy and technical documents. As a graduate student, my primary duty is to read, understand, critique, and apply research. To effectively consume all this information and still sleep a couple hours a night, I’ve had to become a pretty fast reader. 

In today’s fast paced society where time is of the essence and reading is equally important, Speed Reading has become a trendy topic targeted by companies selling self-guided trainings and secrets to reading faster. At its’ core, speed-reading is simply the act of reading faster than what comes naturally, but there is much debate over how speed reading works.

Woody Allan once quipped, “I took a speed reading course and read War and Peace in twenty minutes… It involves Russia.” Speed and comprehension of reading are inversely related, so as you increase the speed with which you read, the thoroughness with which you retain and understand information decreases. Before reading anything, you should determine how much of the information within a piece of literature you need to understand and retain. If the goal were to find a particular word on a page, then rapidly skimming at a rate of close to 1000 words per minute without any comprehension would be ideal. However, if the goal is to be able to recall all the information, then a slower, more laborious pace should be employed. 

Speed-reading is derived from extensive practice of some basic techniques that include training fine muscle movements in the eyes and larynx. The human eye does not track across a line of text in a straight path; rather it darts around the page viewing different pieces of text to the left and right, as well as above and below the target word or sentence. To help focus the eye’s gaze onto a desired spot a speed-reader uses a technique called Metaguiding.  Metaguiding involves using a finger or some type of pacer to help focus one’s eyes on a particular line of text. Whether this includes invisibly underlining text with a finger or pen, or moving an index card or piece of paper progressively down a page, the goal is to reduce the eye’s tendency to wonder and focus it on the desired text. Metaguiding will increase speed, improve focus, and reduce regression.

Regression occurs when a reader retraces their gaze and rereads a word, sentence, or passage they have already read. Regression typically occurs when one has a lack of confidence in what they have already read. While a reader may feel unconfident in a particular piece of text, they typically have already comprehended it, sometimes subconsciously. Speed Readers do not regress in their reading by being cognizant of the fact they probably already understand the information and using Metaguiding to continue progressing through the text.

Subvocalization is the inner voice that occurs when reading text aloud in one’s mind. When one is reading silently the eye perceives the word on the page, sends the signal to the brain where it is transmitted to the larynx. The larynx vibrates, even if there is no audible speech, and that signal is sent to the brain where this auditory stimulus is comprehended visually as the particular word on the page. Speed Readers remove the middle process and go directly from the word on the page to a visual deception of it without using subvocalization. By eliminating subvocalization, readers are not limited by the pace of their larynx and the additional processing it takes to comprehend material and can progress to reading rates several times faster than subvocalizing allows.

Clumping is the processing of reading several words at once. It takes about ¼ of a second to move one’s eyes from one place to the next, so reading one word at a time and moving the eyes from one word to the next will take much longer than if the reader were to look at 4 or more words at once. By looking at text in chunks or groups, the amount of time it takes to move trough text will significantly decrease. Newspapers and some Journal articles are set up in columns to help facilitate clumping. 

Increasing one’s visual span will enable a speed-reader to expand the size of their chunk and take in more information at once. As a reader moves through text they should be focusing on the middle of a clump so that their peripheral vision can observe the outside words without having to move the eye. Practice and training of the eye muscle to perceive more of what is on the periphery of the visual span will gradually expand the visual field to gather more information per eye movement. 

The last technique used by speed-readers is the manipulation of word groupings. Word groupings are simply a clump that has a coherent meaning. By identifying word groupings including common jargon, redundancy, and idioms the reader can switch gears to move from a slow laborites pace with the goal of understanding information, to skimming quickly to move past information that is not vital to the reader. 

I love language and quotes. One that represents my view on reading comes from Dr. Seuss who once wrote, “The more that you read, the more things you will know. The more that you learn, the more places you'll go.”  Using speed reading techniques will improve your reading efficiency and enable you to consume more information in a shorter amount of time, which will open new doors for you personally and professionally. Reading efficiently is one of the most important life skills an individual can half since it allows you to gather information and expand one’s perspective. George R.R. Martin, concisely articulated one of the benefits of reading, “A reader lives a thousand lives before he dies, the man who never reads lives only one.” 

Follow me on Twitter @Aaron_Kraus

The Weekend Hangover

For those of you who didn’t go home after happy hour last night and pass out on the couch before making it to the bar, this is Your Weekend Hangover.

This article has particular significance for me. I’m a doctoral student with only a dissertation left to complete and will be turning in a first draft of my proposal in the very near future. An education Ph.D candidate at Kent State was recently expelled after being charged with plagiarism in the first draft of her dissertation proposal. In response, she is suing Kent State for breach of contract, negligent supervision, defamation, and unjust enrichment with the goal of being let back in, being awarded her degree, and gaining $25k in damages. She alleges that there is no plagiarism in a first draft and that she knew the citations were incomplete and was planning to fix them during the editing and revision process. To me there seems like there is more to this story than what has so far been reported, something doesn’t add up. 

Has the Boston-New York Rivalry Gone Too Far? Absolutely not- especially while the Yankees and Giants are having off seasons. I guess that New York is so bitter over Boston’s recent success in sports, they are trying to create a major natural gas pipeline that leaves Boston out in the cold.

More accounts, more problems. Couples that separate bank and financial accounts/assets experience more problems than those who don’t. Relationship factors aside, here are four financial reasons having separate assets is a bad idea.

New guidelines for cardiovascular disease were published this week and some doctors are a little distressed and feel they miss the mark. Dr. Court Vreeland starts this article by writing, “New guidelines on reducing cardiovascular disease risk have been released. They’ve called these “much anticipated,” however, I call them “inconsistent with research” and “likely to cause more harm than good.””  He goes on to illustrate how atherosclerosis occurs and why these new guidelines are off base.

I’ve got a ton of information and a strong opinion about this, so I really need to sit down and write up a post on how student loans are tantamount to predatory lending and the next big financial bubble waiting to decimate the global financial system. This piece of information is too important not to post now though. Student loans have surpassed $1 TRILLION and the delinquency rate is at an all time high of nearly 12%. Both of those numbers should shock and terrify you.

This is one of those studies that is fascinating, but I’m not sure will have any practical value. Republicans sweat and show more sympathetic nervous system activation in response to threating images than moderates. Democrats sweat less and show little to no sympathetic nervous system activation in response to threating images. Everyone understood there was a threat, but republicans showed a physiological reaction while it didn’t phase the democrats. I have no idea what to do with this information, but I’m sure both sides can spin it in their favor.

The end of Goldman Sachs as we know it. In an uncharacteristically humane move, the firm is going to start allowing associates to go home on weekends and try to have something resembling work-life balance. I wonder what the guys in the Goldman Sachs Elevator are saying about this…

Another topic I’ve been meaning to write about is the effect of Obesity on people, the economy, and organizations. Here is a new study showing that physical fit children can absorb and retain new information more effectively than children who are out of shape.  

Sex and Politics At Google: It’s a Game of Thrones in Mountain View

The Amazing Growth In College Football Revenues is climbing at an average of 9% a year. Wow, I’m glad the student athletes generating all that revenue are fairly compensated for their efforts.

7 financial decisions you make in your 30s that will haunt you in your 50s. Some topics discussed are the company you work for, your choice of partner and when you have kids, and whether you should rent or buy.

My dad sent me this article and said, “Son before you leave a job that pays over a million a year, please talk to me.”  

Johnson gets beat in a bathroom. Rudy Johnson, the star QB of NCAA DII Winston-Salem State was supposed to be playing in the CIAA Conference Championship game today against Virginia State. That is, until he was beaten up in a bathroom by five players from the opposing team, sustaining injuries that put him in the hospital. This is probably also the only time I ever suggest you read the comments section.

Researchers monitor social media posts in a bid to cut military suicide rates.

The Making of an Olympian: Shocker- it’s part genetics and part training.  

Switzerland to pay people, just for being alive.

Necessity is the mother of innovation. This is why I think many companies fail. This article looks at oil exploration, but take Apple for example (I know you’ve heard this from me before). Apple has a ton of cash and some products that are very lucrative for them. They don’t need to develop another product to sustain the company in the near term so the pressure or incentive to innovate isn’t there and therefore doesn’t happen.

Barack Obama is on pace to be the only President in the post-war era to average negative government employment growth. Since he took office in 2009, the government workforce has decreased by 706k jobs or 3.1%. In contrast, Regan created 623K government jobs or 3.8%.

Fannie Mae and Freddie Mac will pay $39 billion to the U.S. Treasury by the end of the year. In aggregate, the two will come close to repaying their entire bailout. The government injected nearly $188 billion to keep them afloat through the housing bust. Together, the companies will have paid more than $185 billion in dividend payments by year-end.

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5 Things You Didn't Know About Taco Bell

Theoretically, Taco Bell could solve the world’s hunger problem. Taco Bell has developed a system that provides the most calories per dollar of any commercial “food” in the world. The only problem with using Taco Bell to solve world hunger, is that the world’s health problem would be significantly exacerbated. In a time where most restaurants are listing calories on the menu and providing healthier alternatives, Taco Bell has been a stalwart in the fight for obesity. Rather than create a healthier menu, Taco Bell, a subsidiary of Yum! Brands, has introduced new tantalizing ways to generate revenue. The Doritos Locos Tacos for example are even worse for one’s health than a regular taco, but the vibrant color (artificial coloring), neat concept (Taco wrapped in Doritos!) and cool name (Doritos Locos Tacos, holy alliteration batman!) have kept the company growing steadily. Here are five things you didn’t know about your favorite late night snack, Taco Bell.

At 23-years-old, Glen Bell opened his first restaurant, which was a hot dog stand in San Bernardino, California called Bell’s Drive-In. After measured success, he quickly sold that business and opened another under the same concept called Taco Tia. He was the first to offer fast food tacos, which were an instant hit. He eventually sold Taco Tia, which offered many fast foods to open Taco Bell in 1962 to focus on what had become his signature product.

Mexicans are not has fond of Taco Bell as Americans. The stereotype around the world is that American’s have poor taste in food, and the rest of the world may have a point. After all, the fast food hamburger is the signature American dish. So while American’s may think Taco Bell is great-tasting “Mexican” food (especially after a night at the bar) all the tequila in Tijuana can’t get Mexican residents to feel that way. Taco Bell tried and failed to enter the Mexican market in both 1992 and 2007. In 2007, they tried to brand it as Americanized Mexican food by adding French fries to the menu (Anyone else see the irony there? Also, please see my point about traditional American food from earlier). Both attempts failed miserably.

Taco Bell and McDonalds have a lot in common, including having the same hometown of Downey, California.  (If you missed it, I wrote about 4 interesting things you didn’t know about McDonald’s here.) The first and oldest Taco Bell built by Glen Bell is still open in its original location, which opened 13 years after the McDonald’s brothers opened their first location near by.

Taco Bell invented the hard shell taco. Another innovation from the fast food industry! Bell realized early on that he would have to reduce the time it took to make a taco if he wanted to have a successful fast food business. Warming then stuffing a tortilla took too long and was too messy, so he got out a deep fryer, bent a tortilla, and created the hard shell. The hard shell has allowed for quicker preparation time and a crunchy alternative to the traditional soft taco. It also allowed for future innovations.

The Doritos Locos Tacos are the most recent innovation of Taco Bell, but it didn’t happen overnight. In fact, it took over three years to create it. What started as a brainstorming session for a co-branded product led to months of testing and product modifications. The most challenging part of creating this menu favorite was matching the texture and flavor of the nacho cheese Doritos chip with the yellow corn taco shell of Taco Bell. It took three years to get it right, but it was well worth it. The Doritos Locos Tacos were first sold in 2012 and are responsible for adding 15,000 jobs to the company. Over 500M of the new product were sold in the first 14 months for over a $1B. Some things are worth waiting for.  

When you stop at Taco Bell on your way home from the bar this weekend, ask the person working the drive through window or the counter if they knew these five interesting things. If not, feel free to enlighten them. I’m sure they’ll appreciate your knowledge of their company.

Follow me on Twitter @Aaron_Kraus.

A picture is worth 1,000 words, Snapchat is worth over $3 Billion.

A picture is worth 1,000 words, Snapchat is worth over $3 Billion. Yesterday, it was reported that Facebook offered $3B in cash for the fledgling picture messaging company Snapchat in what would have been its largest acquisition to date. In the ultimate power move, 23 year old Snapchat co-founder and CEO Evan Spiegel graciously told Mark Zuckerberg and Facebook to take their money and shove it as the company had more lucrative options on the table.

Snapchat is the rapidly growing picture and video messaging service that allows users to take a picture, draw on it, add text, then send it to other users where it exists for between one and ten seconds. The appeal of the service is that the picture disappears “forever” after a set amount of time. Nothing is ever gone forever on the Internet however, and the caveat here is that another user can take a screen shot to preserve the image on their phone and do as they please with it afterwards. In the event the taboo act of screen-shotting is committed, the sender is immediately alerted by the app, but there is little they can do at this point. Additionally, past messages are saved on the phone’s hardware, which could eventually be extracted. (Take a look at some of these awesome screenshots to get an idea for how this works.)

Evan Spiegel wasn’t the first one to come up with such an idea though. In 2010, my friend Andrew Schmidt who occasionally writes for this blog, had an idea he called “Safe Sexing”. The way he tells the story, he was at a bar in Chicago with a friend who was trying to get an image from a girl. The girl was reluctant to send him anything because she didn’t trust it would be seen by his eyes only. After seeing his friend get shot down, Andrew and his friend started discussing an app that would automatically delete an image after it was seen and disallow screen shots. Their idea featured a scroll wheel that would set the amount of time the picture could exist. (Sounding familiar?) He pitched the idea to everyone he knew (including me) under the name “Safe Sexting” and described how he would have celebrities who were caught sexting like Brett Favre, Anthony Weiner, Chris Brown, and Scarlett Johansson as promoters and investors. Everyone laughed and said it was a good idea, but no one, including me, took it seriously. About a year later, two Stanford college students (Evan Spiegel and Bobby Murphy) ostensibly had the same conversation as Andrew and his friend at a bar and subsequently developed Snapchat.  

As this article says, “I hate to tell you this, but there is no such thing as Safe Sexting.” Sorry Andrew, maybe with a little support we would have Safe Sexting instead of Snapchat. Next time you get a $3B idea, don’t let me walk away.

I believe Snapchat’s success is not solely predicated on the ephemeral nature of the images, which enables clandestine and risqué exchanges. Rather, Snapchat is the first direct picture-messaging platform. Its user-friendly interface allows individuals to send pictures and videos without the cumbersome process necessary to send a picture on a smartphone. The message can be sent to multiple people at once without anyone knowing who else received the message and the message is automatically displayed on the full screen when opened. A picture is worth 1000 words, so Snapchat is a fast, convenient, and fun way to communicate with others.

This service is apparently worth at least $4B, as Snapchat has an investment offer from Chinese e-commerce giant Tencent Holdings for at least that much. Other investors and potential acquirers are also competing for a piece of Snapchat, which will likely drive up the value of a deal to be made early next year. To put this valuation in perspective, Twitter is valued at about $25B and Pinterest at $3.8B. Facebook bought the photo sharing social network Instagram for $1B in 2012 and had previously made a $1B offer for Snapchat.

Snapchat currently has about 15 employees and no identifiable revenue or business plan, so what are investors like Facebook trying to buy? Users. Snapchat has about 30M users and nearly 30% of adults ages 18-29 say they use the service based on data from a Pew study conducted in October. Despite its popularity among adults, the vast majority of Snapchat’s users are teenagers. The teens flocking to Snapchat are the same ones I wrote about recently that are eschewing Facebook and twitter.

In addition to their desirable user base, Snapchat is based purely on smartphones, which is also Facebook’s largest segment. Snapchat’s prevalence with teenagers is appealing to Facebook because it would compensate for the large number teens that have absconded from the social network and allow them access to that audience for mobile advertising. Facebook is at a point where they have to get creative with revenue generation because they have reached the saturation point of advertisements in users’ timelines. If they add any more advertisements, the company believes users would start deactivating their accounts rapidly.

In June, Snapchat raised $60M from investors to sustain operations, which valued the company at about $800M. Within three months, Snapchat said usage had doubled to 350M messages a day, up from 200M in June. This rapid growth coupled with other investment offers, makes Snapchat’s decision to rebuff Facebook prudent as it holds out for more money. Plus, how often do get to say “No” to Mark Zuckerberg, especially when he is offering you $3B? There are some things money can’t buy, and for now it appears Snapchat is one of them. 

Follow me on Twitter (and add me on Snapchat) @Aaron_Kraus

American Airlines and US Airlines Merger Cleared For Takeoff

American Airlines and US Airways have reached an antitrust settlement with the U.S. government that would allow their $17.2B merger to take place. The government initially had antitrust concerns over the merger and how it would affect flights at popular Washington DC airport Regan National. The two airlines currently control about 69% of the slots at Regan, which is the most popular airport among members of Congress.

The airlines agreed to give up 15% of their daily departures at Regan and 7% at La Guardia, which will allow competition to pick up those departures and is expected to create lower rates for flights from these locations. They also agreed to retain the major hubs that are currently supported by the two airlines across the country. These and many of the concessions the airlines made would have likely occurred anyways during the merger as part of cost cutting and efficiency measures. In all, only 112 of the carrier’s planned 6,500 daily flights will be affected. However, the Justice Department describes these concessions as a win, saying these are the most divestitures ever made in an airline deal.

The deal is expected to add $1.5B annually in revenue to the combined company and cost savings are expected to bring the total to $40B in operating revenue for the new organization. Together, the companies will employ over 100,000 people, most of which are unionized. The deal would make them the largest airline by flight volume with more than 6,400 flights daily to 336 locations in 56 countries. The combined airline will have American Airlines branding and will be renamed American Airlines Group. The merger is cleared for takeoff in December with US Airways CEO Doug Parker slated to captain the combined company with the US Air leadership team out of American’s headquarters in Fort Worth, Texas.

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The Affordable Care Act (Obamacare) at 3% of overall goal

Only about 49,100 people have enrolled in Obamacare plans so far since they became available on the beleaguered HealthCare.gov website. That number represents about 10% of the 500,000 people who were expected to sign up within the month of October. Technology problems and design flaws have prevented many individuals from signing up and those with the most need have reported trying unsuccessfully every day since its launch on October 1 when a grand total of 6 people signed up. While the website is culpable for some of the poor enrollment, the problems seem to be in the hardwiring of the plan. It was estimated that 7M people nation wide were expected to gain coverage by the end of March when the open enrollment plan is scheduled to end, yet only 700,000 people have completed applications so far, with the number successfully enrolling in coverage a fraction of that population.

Not only are fewer people signing up overall, but the average age of an enrollee is much older than was expected, which is equally concerning. The government needs the average age of an enrollee to be about 40, but preliminary data indicates it is closer to 55. The Affordable Care Act needs young healthy people who will pay for insurance, but are unlikely to need health care services to subsidize the costs of older adults and others who are likely to need more frequent and more costly services.

The young healthy people are most likely to fall in the 18-26 age group, which is the lowest user of health care services. For perspective, a 64 year old is expected to use more than six times the services of a 19 year old. The services of an older adult are also typically more expensive than those of a young healthy person. The young and healthy are the least costly to cover and therefore the most profitable, yet these individuals are still facing disproportionately high ObamaCare rates. As an example, a 27-year-old male will pay 99% higher premiums under The ACA than he would under previously prevailing market rates, should he opt for the lowest coverage.

Keep in mind, this under 26 demographic also had an unemployment rate of 12.5% reported last month compared to the 7.3% national average, 5.4% for those over 55, and 5.9% for those 35-55. This complicates the additional high cost of coverage under the Affordable Care Act as these individuals have high premiums despite being less likely to have a job that provides insurance or a source of income. As a result, many of this population are signing up for Medicaid instead of Obamacare. They may also make the rational choice of paying a small fine to forego health coverage until they can find jobs that provide health insurance.

If this trend continues and young healthy people refuse to sign up for the ACA, the program is in serious trouble. While all the numbers indicate an atrocious start for the program, the start is inconsequential if the program meets its goals in the end. Optimistically, the results from the states developing their own exchanges are marginally better. This is likely attributed to their smaller stature, which allows flexibility and their proximity to the customers, which makes them more accountable than the federal government. Also, keep in perspective that young people are likely to wait to the last minute to sign up, or only sign up for coverage once they are in need of it. Even with such a terrible start, there is still hope of the Affordable Care Act.  

Follow me on Twitter @Aaron_Kraus

Four Things You Didn't Know About Wal-Mart

The world’s largest employers in order go like this: 1. United States Department of Defense, 3.2M employees. 2. Chinese People’s Liberation Army, 2.3M employees. 3. Wal-Mart, 2.1M employees. By every metric, Wal-Mart is one of the biggest organizations in the world. The company currently has a market capitalization of about $253B and had revenue of $470B in 2012. What is now a retail giant, was started as a local corner store in 1962 by Sam Walton in Rogers Arkansas. The company transitioned from a regional retailer to national giant in the 1980s and by 1988 Wal-Mart was the most profitable retailer in the United States. Wal-Mart now has over 8,500 stores in 15 countries under 55 different names. Here are four things you didn’t know about Wal-Mart.

1.     In 1988, the company debuted the Wal-Mart Supercenter, where it provided a broad range of products for consumers. At the time, the company was in 27 states and became the most profitable retailer in the country. This was also the year founder Sam Walton retired and was replaced by David Glass who now owns the Kansas City Royals. The fortune of Sam Walton was divided evenly amongst his four children, who each inherited more than $25B dollars. His fortune would place him atop the world’s richest people’s list more than $30B ahead of current titleholder Bill Gates.

2.     In 1991, Wal-Mart decided it was time to go international. Wal-Mart’s first international store was in Mexico City and served as a bridge to the rest of the world. Within three years, the company had 96 stores in Mexico. Today, 61% of the company’s 10,153 locations are international.

3.     Vermont was the last state to get a Wal-Mart, but that took some work. As recently as this past summer, my fellow Vermonters are still putting up fights against allowing Wal-Mart into small towns that thrive on mom and pop stores. You can read some of those articles here, here, and here.

4.     I have to begrudgingly admit that Wal-Mart is an innovative company. They have developed television networks, capitalized on healthier grocery alternatives, and created the most sophisticated supply chain methods in the world.

Do the ends justify the means? Wal-Mart has reached giant success so they are an easy target. Their ethical infractions include bribery scandals, bullying their way into new markets, intentionally putting other companies out of business, and employment discrimination by race and gender. Their corporate culture is fully aligned with their band promise and they live the “Everyday Low Prices” mantra. I have to wonder though, how would the company be different if Sam Walton were still alive? What would he say about the ethical violations and use of the power that comes along with being the largest company in the world?

Follow me on Twitter @Aaron_Kraus

This Week On TMB

This Week’s Top Posts On The Modern Business Man:

Thank you for all the shares, retweets, comments, views, and messages, this was by far the most successful week on the blog on terms of  views and popular content in its short history. 

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