The Groupon/Coupon Bubble Will Burst Soon

I posted the above status update earlier today, and when asked to explain myself on Facebook, I wrote up a rather lengthy explanation that seemed worth of turning into a blog post…so here it is (slightly edited for clarity).

I’ve talked to a few small businesses now that have used these new coupon services, and in every case so far, they’ve been financially maimed by them. Some due to their own ignorance or poor financial understanding, some by the salespeople at the deal companies.

A carpet cleaning company used Kijiji and the salespeople wouldn’t allow him to put a limit on the number of coupons sold – because they wanted to gain as much revenue as possible from it of course. They charge 50%, like everyone seems to, and still tacked on another 2.5% in credit card processing fees. Talk about adding insult to injury. Thankfully for him, only 150 people ordered the carpet cleaning – he was smart enough to spread out the appointments, only booking the Kijiji deals three times a week. That makes it frustrating for customers like me to get the service in a timely fashion – it took two months for me to get my booking in – but given that he’s working at 77.5% off his normal price, he’s only breaking even on supplies and travel costs…so his labour is free. Hard to feed a family on that!

In my case he made some money – I had him do two sets of stairs, which weren’t a part of the deal – but he said nearly every time people only want what the coupon covers. So as soon as he hits 500 square feet of carpet cleaned, he stopped.

Most businesses hope for repeat customers, but the type of customers that use deals like these are usually the kind who aren’t willing to pay for a service at full price in the first place. So you end up with people using your service at no profit to you, and you don’t get many new customers out of the deal. There are some exceptions: the guy that did our carpets did such an amazing job I’ll absolutely use him again, paying full price and b happy about it. I think that’s rare though.

Some deals can scale, no matter how many coupons are sold. I just bought a $10 for $20 at Old Navy for example. Old Navy could sell 10,000 of them and their stores could handle the extra traffic just fine. But the small carpet cleaning business, if he suddenly has 500% more clients than before, it soaks up all his excess capacity (good) but also uses up all his future capacity for the next six months (bad), at no profit. I heard of a cleaning company that went bankrupt because they sold too many coupons – again, because the company wouldn’t let them restrict the number of coupons sold – and it was easier to go bankrupt than to absorb the losses of the poor business decision of using the coupon service.

A Case of Curious Parking, Curb Your Enthusiasm Style

I don’t know if this is going to be a controversial post or not, but having watched a lot of Curb Your Enthusiasm lately, this odd scenario jumped out at me as if Larry David himself wrote it and I thought it was amusing enough to share.

I was at the Avenue Commercial shareholder’s meeting last week, and I pulled into the parking lot looking for a spot. I was baffled seeing a car parked in front of two spots, completely blocking access to both of them. It was like this person simply didn’t want the hassle of turning their wheel and it was easier to drive straight into the parking lot and stop the car in that spot. I managed to just barley fit into the third spot, and when I got out I was surpried to see a blue handicapped card hanging from the rear view mirror.

I thought to myself “That card gives you the ability to park in special spots near the door, so why pick the middle of the parking lot to stop your car and get out?” I have to wonder how this person justified blocking two parking spots? Perhaps I’m being unfair and there was a reason for this, but for the life of me I can’t think of what it could be. The ultimate irony in all this? On my way to the door I walked past a handicapped parking spot with no one parked in it.

If this really were a Curb Your Enthusiam episode, it would have gone something like this…

Larry David is in a rush and pulls into a parking lot, looking for a parking spot. The only spot available is the handicapped spot, so Larry pulls into it (and it’s a “straight shot spot” where you can pull in coming off the street without needing to turn the wheel), justifying it by saying no handicapped person needs that spot at that very moment. He tells himself he’ll be quick. After his appointment, Larry comes out of the building to find a handicapped woman in a vehicle waiting for him, angry that Larry had taken the spot. Larry gets into a verbal sparring match with this woman, and she yells that she needs the use of this “straight shot spot” because she can’t manoeuvre her full-sized van with a wheelchair ramp into any other spot  in the lot. Larry yells back that if this she can’t park in any spot but this one, she should just pull into the lot and park perpendicular to other vehicles. He insists that he would be totally OK with her doing this. Discussions with Jeff would later ensue about the “Straight Shot Spot”, and Larry would find himself shortly in a situation where, upon his suggestion, the same woman would have parked perpendicular to his vehicle in a different parking lot, blocking him in his spot and causing him problems. Or something like that. 😉

Bing: Getting Better, But Room for Improvement

I don’t know about you, but I’ve been using Bing more and more lately – and for the most part, I’ve come away quite impressed with the search results I’m getting. I’m starting to see results that are even better than Google in some ways, which is excellent – Google allowed their index to become infested with spammy results. One area that Bing needs big improvement in though is maps – Google has a strong lead there in my opinion. The screen shot below is a perfect example of how Bing struggles to give proper directions:

Both of those addresses are in Calgary, yet look at where Bing thinks the destination is…Europe! How it can get delivered the keywords of Calgary and AB (Alberta) and get Europe is beyond me. Time to tweak that code Microsoft!

Performance Matters in Email Newsletters Too

The above screenshot is from a newsletter that I received today, and it’s pretty normal for me to see broken images in a newsletter, or images that take so long to download, they might as well be broken. We live in a world where there are all sorts of tools and services to monitor the up-time and performance of a Web site, and yet little to no attention gets paid to the up-time and performance of email newsletters. When I get an email about a sale at a big box retail store and the images in the newsletter take 60 seconds to load, that doesn’t make me think very highly of the brand in question. If you have an email newsletter, do yourself a favour and make sure it delivers the kind of experience you want your customers to have.

And in case anyone is wondering, the images were still broken after I gave Outlook permission to download the images…

Avenue Commercial Castleridge LP Investment Corp. Annual General Meeting Notes

Today I attended the Avenue Commercial Castleridge LP Investment Corp. Annual General Meeting and finally learned about the status of our troubled Concrete Equities investment. There’s some bad news, and some good news. Overall though, it was net-positive: the bottom line is that there’s some debt to deal with (the vultures want their pound of flesh), but we have full ownership of our property, are cash-flow positive, and things are looking up in terms of us eventually getting back on track for the cash disbursements we all signed up for. I took as many notes as I could; here they are in point form:

  • Presented by Steven Butt, General Partner, Avenue Commercial
  • Very positive on this particular building
  • They were given millions of pages of documents by Ernst & Young; hard drives. Five months of work to process, several hundreds of thousands of pages scanned
  • They’re not going to go back and look at all the documents – they’re moving forward
  • We now have financial statements (hooray!)
  • T-5013 tax forms are available
  • Castleridge: 8.25 acres of property, 74,000 square feet of leasable space
  • Building constructed in 19991 and in good condition, but the overall property needs some work. Suffers from a few years of neglect
  • Nov 2007 we paid 24.2 million for the Castleridge location. Concrete took $3.2 million as their fee.
  • The June 2008 appraisal was $18.5 million; the June 2010 appraisal $18.2 million
  • Loss in value of $5.7 million. Why? Large promotion fee, receivership costs, spike in retail vacancy, 30% vacancy
  • Exit of CCAA after 1.5 years in July 21st, 2010

Continue reading Avenue Commercial Castleridge LP Investment Corp. Annual General Meeting Notes

Avenue Commercial Schedules Annual General Meeting

If you’re an investor in any of the five ill-fated Concrete Equities properties in Calgary, now being run by Avenue Commercial, there’s an important meeting coming up on April 29th. It’s being held at the Highland Park Community Association Hall (3716 – 2nd Street NW). The schedule is as follows:

  • MEG LP Investment Corp: 9:00am  to   9:45am
  • Millrise Deer Valley LP Investment Corp: 10:30am to  11:15am
  • Castleridge LP Investment Corp: 12:00pm to  12:45pm
  • Lavalin LP Investment Corp: 2:00pm  to  2:45pm
  • CE Place Investment Corp: 3:30pm  to  4:15pm

You’re required to bring photo ID with you for registration – which starts 30 minutes prior to each meeting, and closes 10 minutes after the meeting starts – and only registered owners will be permitted into the building. I’ve emailed them to ask if husband/wife combos are permitted; the investment is in my wife’s name, but I’m the one who handles the investments in our family – so far no response from them, but I’d be surprised if they said not to this. No audio or video recording devices are permitted.

The email I received with this information alludes to some good news, so I’m tentatively hopeful that the investment we have in Castleridge will get back on track and earning us money like it was always supposed to.

Working with a Resume Professional is Sometimes the Best Choice

As someone who spends a good part of his day writing – blog posts, reviews, editorials, email, etc. – I pride myself on my ability to put words down in a cohesive, effective manner. So you’d think that when it came time to update my resume, it would be an easy task. Not so much. I don’t know if it was the fact that I’ve never been overly comfortable writing about myself, or if it’s that the idea of putting together a resume from scratch was extremely daunting. I hadn’t updated my resume in seven years, so when I looked at it and saw how outdated it was, I wasn’t sure where to start. I toyed with in for more than two months before accepting the fact that I needed help getting it done. Yes, there was a strong case of denial at work – and while I was initially reluctant to spend money on having someone help me write my resume, I finally accepted that it was the best approach.

I did a quick Google search for “resume writing” and saw an ad by Resume Lifesaver, a.k.a. Sarah Wright, and clicked on it. I found Sarah’s costs to be reasonable, her response time consistent, and she was an absolute pleasure to deal with – especially since I was an uncooperative client, often taking weeks to respond to her at the beginning. She also took the time to have a phone call with me to learn about what I wanted my resume to communicate. There’s something I find profoundly unpleasant about working on my resume, and she was patient with me while I slowly convinced myself to finally tackle this project.

If you’re looking for someone to help you write a new resume from scratch, update an old resume, or re-work your current resume for a new job, I can recommend Sarah Wright and Resume Lifesaver without reservation.

And here’s a tip: once you get your new resume, update it a couple of times a year with significant accomplishments and career milestones. Don’t worry about it getting a bit long – you can trim out the unnecessary stuff when it comes time to share it. You’d be surprised at how easily you forget some of this stuff if you don’t write it down!

9 Things The Rich Don’t Want You To Know About Taxes

“John Paulson, the most successful hedge-fund manager of all, bet against the mortgage market one year and then bet with Glenn Beck in the gold market the next. Paulson made himself $9 billion in fees in just two years. His current tax bill on that $9 billion? Zero. Congress lets hedge-fund managers earn all they can now and pay their taxes years from now. In 2007, Congress debated whether hedge-fund managers should pay the top tax rate that applies to wages, bonuses and other compensation for their labors, which is 35 percent. That tax rate starts at about $300,000 of taxable income—not even pocket change to Paulson, but almost 12 years of gross pay to the median-wage worker.”

This is a stunning, eye-opening article about taxes in the USA. Reading it made my head swoon – there’s so much corruption, deception, and outright lying going on when it comes to the issue of taxes, it makes you wonder how much longer this can continue. I’d classify myself as “anti-unnecessary tax” – I have no problem paying taxes every year because I know that my taxes go toward funding the things that make the lives of my family better: healthcare, defence, roads, police, fire-fighters, etc. I don’t embrace extra taxes, however; the GST we have in Canada (currently at 5%) irks me because it’s a tax everyone has to pay, regardless of income level, and when you combine it with the taxes we already pay on fuel, property, etc. it adds up. Paying taxes are part of what it means to live in a society where services are provided though, and seeing people – very wealthy people – manage to get away with paying nothing is infuriating.