Pinning An IPO on Pinterest

• Pinterest has become a major influence in style, social media and the internet
• Pinterest could potentially profit greatly from its position although it has yet to break out of its core demographics
• Pinterest has not yet made any official statement about an IPO when it does it could be on of the high water marks of this bull market

One of the first websites ever built was art.net, used to share and sell art and raising the first questions about buying art online. Since that initial idea, art online has evolved into what is now the forefront of setting trends in art and fashion and selling millions of related products. One of the major players, Etsy which sells handmade crafts and antiques just went public and despite not yet achieving profitability reached a 2 Billion dollar valuation. Another much larger art and social media mammoth is still waiting on the sidelines to bring in the most dominant wave of internet start-ups which is completely changing the ecosystem of online traffic.  "Fashion-tech is creating an industry that's more beholden to people's needs than the elitist fashion world of the past. Because a lot of the ways things are done now — fashion-of-the-week shows, buyers, very powerful editors in major fashion capitals — these were the ways that trends were distributed, and they weren't very democratic. But the Internet democratizes everything." Jess Lee CEO of Polyvore

http://tinyurl.com/q5qy9sf

Pinterest with 70 million users is the number one online platform for woman's tastes in the US. Ben Silberman started it after leaving the family trade of medicine for Google and then leaving Google right before the recession to do his own start-up. He struggled to find funding at first but managed to convince former classmate Paul Sciarra to invest and recruited another friend Evan Sharp from Colombia studying architecture to help him design a product of their own. The site grew at a slow pace initially but they stuck it out, resorting to less traditional grass roots marketing like chain letters which laid the social foundations for the later digital growth. Ben jokes that early users came from his mom promoting it to her patients in Iowa. The slow start paid off in late 2011 when in only 9 months the site went from 50,000 users to 15 million by early 2012.

quora.com/Why-is-Pinterests-growth-slowing-in-2014

From those inspiring beginnings the site has continued to grow, but at a far less explosive pace than early on and its main user-ship has largely come from its hometown demographics. At this point about85% of its users are women in the Midwest, making up about 20% of all internet users in the US. The original idea came from Ben's childhood interest in collecting bugs and the underlying appeal of Pinterest still comes from users satisfaction in collecting or pinning things they uniquely love in a way that suits their own artistic vision. As their blog says "we want to inspire you to go offline and do things that you love." Pins are collected on boards related to that customized theme and tap into people's creative outlets and as Steve Jobs recognized when you can do that, possibilities are limitless.

Challenges and Opportunities: The biggest challenge for Pinterest as well as Facebook or any other website has always been to seamlessly turn advertisements into actual purchases. In the case of Pinterest, for users to purchase products related to what they're pinning.  Much like the difference between low end Walmart and upscale shopping like Nordstrom, on the internet there seems to be a trade-off between attracting a large amount of  low spending users and those who will actually purchase something if it meets what they're looking for. While it may initially appear that its 1.2 billion users give Facebook an upper hand, the quality of traffic may be just as important. Pinterest's  greatest strength is that its user-base is a step up from the general internet mass and using Pinterest in a way directly related to what they purchase. Users willingness to purchase can be shown by a few different indicators, but Average order value (AOV)  for Pinterest is $58.95 or as much as $78 on an average order over $55 from facebook. To put this trade-off in context there are even higher end websites like Polyvore and Wanelo that have much less traffic than Pinterest yet the traffic they do have generates much more actual shopping than the general clientele of Facebook or Pinterest. Polyvore alone produces as much as 20% of all social shopping. Such smaller crowd-sourced fashion websites might not pose any real threat to Pinterest but they do suggest the opportunities Pinterest has yet to completely tap.

Paul Sciarra, Ben Silbermann and Evan Sharp
portal.rism.ac.th/kanruetaiy16/

One step towards doing this, recently, Pinterest has started using promoted pins which allows outside advertisers within guidelines to create their own pins. Joanne Bradford head of partnerships at Pinterest says that better targeting is among the wish-list of items she often hears from clients, along with better conversion-tracking and showing how online exposure led to offline sales.  The challenge is to try and keep ads transparent, tasteful, relevant and in line with what users want to experience. In keeping with those aims, they have also acquired Kosei. a Stanford start-up that created that was able to decipher and map the relationships between different products in a catalog, enabling it to make smarter recommendations to consumers.

Pinterest was initially designed as a platform that appeals to users visually that worked best with a monitor. They have had to re-adapt their platform to take advantage of mobile and incidentally took it a step further with guided search which basically suggests search terms that others find interesting. Guided search has had surprisingly serendipitous outcomes because although Pinterest had dominated its native demographic it has also pigeonholed itself and had difficulties gaining much of a male following. Guided search has helped boost queries by men in addition to boosting overall queries by 30 percent and gained attention by other tech giants as a tentative step towards the internet of things. It also led to one of the most promising partnerships, prompting Apple to team up with Pinterest to allow them to suggest apps that relate to a users style and pinning preferences.

Pinterest.com

Rather than try to expand to different demographics Pinterest has also tried moving horizontally to reach an international audience. Back in February 2013 Pinterest during Series D funding Pinterest listed “international growth” as one of the initiatives that the money would be used for. During that time it also received a $100 million investment from Japanese e-commerce giant Rakuten — another sign of its international ambitions. Pinterest started off its international "localization" strategy in the U.K. by tweaking the site so that it highlights U.K. content to U.K. users and also adding a British English language settings to suite British users. It has since announced it will open offices in Spain, Italy, Netherlands and Sweden. Whether it will be able to completely bridge cultural gaps in such a style sensitive platform and gain the same kind of following and make good on promises still remains an unknown.

Polyvore co-founders Jess Lee and Pasha Sadri
http://venturebeat.com/2012/11/27/polyvore-launch/

Valuation and Risk  In 2013 Pinterest raised $200 million at a valuation of $2.5 billion. and in 2014 the tag had gone up to 3.8 Billion. 5 months later in May 2014 it was valued at $5 billion and then in a funding round in March this year it had more than doubled to a price of $11 billion thanks partly to guided search. While its hard to access reliable financial data, considering that Facebook is valued at $200 Billion multiplying number of user with a slightly higher AOV value that facebook by its total number of users very rough estimate agrees that Pinterest is potentially worth $10 billion at current market valuation. I question whether Facebook and other social media could over-valued with a P/E ratio of 80, but the general attitude seems that their potential future earnings justify the price. As Benjamin Graham wisely points out, “One fairly dependable sign of the approaching end of a bull swing is the fact that new common stocks are offered at prices somewhat higher than the current level for many medium sized companies with a long market history.”  Considering their lack of history the market may be over anxious to place a high value on their future earnings because it is at the center of a particularly popular industry. That being said of the companies in this space Pinterest seems to be one of the more prominent and their growth appears real.

Flash in the pan? hedgeconnection.com/blog/?p=2147

Another question that investors might ask is whether these social sites which have come into popularity so quickly and are so subject to user tastes might fade from favor as quickly as the fashions they convey. I suggest this is a major lasting shift and Millenials and those growing up using social media will be as at home using this medium as much or more than a catalog. The fact that other sites like Polyvore etc are doing similar work indicates that Pinterest is the natural and obvious application of technology to already set habits, a logical progression of how things are done rather than a short lived trend. There will undoubtedly be more opportunities as technology progresses so Pinterest's competitive advantage will partly depend on them staying on top of emerging consumer technology like they have done with mobile. Other deeper questions like whether Millennials will prefer buying products online over in-store and what types of items are people okay buying online rather than needing to see it in person continue to be answered individually and collectively. In a downed economy as with TV, during recession there were more internet users because they use the internet for outside idea resources and the wealthy if they have are shopping online now, wouldn't change.

Going Public- In the past Silberman has specifically said they are not eager to go public. Although it's not obvious when, they are preparing, allowing employees to leave when they like without losing their stock options. Since there is no official statement all is still speculation, but they do have over 500 employees and at a 10 Billion valuation they are getting to be a larger private companies which might produce some kind of pressure to do so. If all of their employees are issued shares there will be a need to publish their financial data.  As with their user growth they may lag behind what other social media companies have done for a short while because they are more custom made but as Etsy even the most hand crafted companies will not avoid it for too long and when they do I would expect a lot of buying interest. If interested in buying Pinterest stock, you will probably have to wait until well after 2016 before it actually goes public. 


https://www.youtube.com/watch?v=B8crbW0q-_s Interview with Jess 2012

http://www.logicspot.com/ecommerce/polyvore-social-commerce-done-well/

http://en.wikipedia.org/wiki/Pinterest

http://www.forbes.com/sites/jeffbercovici/2014/10/15/inside-pinterest-the-coming-ad-colossus-that-could-dwarf-twitter-and-facebook/

http://www.investopedia.com/financial-edge/0612/pinterest-the-next-social-media-giant.aspx
http://www.zacks.com/stock/news/160435/is-pinterest-a-top-ipo-candidate-for-2015

Value Investing in Start-Ups

Summary:
What to look for in a start-up:
-A committed group (could Polyvore be an acquisition target for Pinterest?)
-A monopoly ( can Tesla find a monopoly? )
-Growth ( does Domo fit Benchmark's standard?)

Especially near Silicon Valley, it seems almost weekly start-up are making huge amounts of money going public or becoming Google's next acquisition.  It seems with that much upside it should be easy to make a major gain, just pick your favorite start-up, get in and wait for them to make it big? Well things might not be quite that easy as a quick sampling of the start-ups or number of applicants to start up incubators or Y Combinator will show. There are nearly infinite start-up ideas and almost as many dollars willing to bet on them, so is there a way to know which one will succeed and perhaps more importantly which will be most profitable?

Pierre Omidyar Left with Robert Kagle right
doanhnhansaigon.vn/khoi-nghiep/ebay-cua-pierre-omidyar/1039849/

Venture capitalists devote their lives to spotting potential in start-ups and Robert Kagle who holds the record for the most successful venture investment ever is quick to warn that venture capital is an extremely high risk business. "In venture capital you lose all of your money over half of the time. In fact 10% of your investments deliver 90% of your returns." He goes on, "failure is the norm in venture capital, if you're not striking out you're not swinging for the fences." For Kagle and other venture capitalists, a healthy recognition of failure is a good idea so that when company looks like its going down they aren't freaking out about the lost investment. Accepting possible failure has allowed Kagle to get on early with Twitter, Uber, Snapchat, Instagram among others but it is probably his treatment of entrepreneurs has been more important. Before him entrepreneurs were considered employees to the investor, but he recognized Venture Capitalist's role not as one of superiority, but as "a privilege to invest in someone else's dreams." "We would be the stage hands and they would be the stars." he says.

Still, Kagle never claimed be able to consistently identify start-up successes, he knew the risks and took a swing, which kind of flies in the face of Warren Buffet's timeless wisdom that "You don’t need to swing for the fences in order to achieve satisfactory investment returns...”  But Buffet also says "risk comes from not knowing what you're doing." Implying that if you know enough of what you're doing you can avoid the risk, so you have to wonder, can anyone know enough to consistently recognize and invest in start-up successes? Building on Kagle's fundamental approach, I would argue one of his partners has done just that.

Peter Fenton at Benchmark Capital TechCrunch.com/ Flickr Creative Commons

Peter Fenton was likely drawn towards Kagle's team because of his history of seeing his dad's negative experiences dealing with Venture Capitalists, who to his young mind were like monsters, out of touch with the realities of running a business, abstract, with a false sense of their ability to predict the future. In his undergrad at Stanford and learning from his own experience Peter already had come to similar conclusions "If you can be in service to extraordinary people who are changing the world for the better, that’s a noble calling." Later after Kagle managed to bring Fenton onto his team, Fenton further refined Kagle's approach and avoided some of  his mentor's lost investments. He has gone on to be one of the most consistent, professional, successful, recognized, and awarded venture capitalists alive setting a high mark for others to follow.

How does he does it?  Although many would like to chalk Fenton's and others like Peter Thiel's ( who is a little more vocal and accesible that Fenton) success up to luck, their succesful exits seems to indicate otherwise. Calling their innate mental abilities, upbringing and graduate programs at Stanford luck is a different discussion, but as far as their ability to repeat their performance and make consistent investment in high growth start-ups, as Thiel says, attributing their results to luck is just an excuse for not thinking. And while their background no doubt plays a big part in their success, even for those who don't have their opportunities, there are still a number of basic lessons that all investors can apply.

https://www.etsy.com/market/wedding_silhouette

The first and foremost of these is long term commitment. Peter Fenton is a triathlete and that attitude of endurance is similar to his approach to business. Polyvore is a good example, Fenton has stuck with Polyvore through an initial change of CEO, slow growth over an 8 year period a major recent pivot as Pinterest has gained some major traction Polyvore seems to be finally picking up along with Pinterest and making it a possible acquisition target for Pinterest. Even with companies that have gone public, Fenton continues to sit on their board looking out for the long term welfare of the companies he's invested in. Although there might seemingly be a lot of differences between venture capital and more established business, long term commitment is a theme that is consistent throughout.  It is applicable in start-ups and established public companies.  As Buffet says,"you should invest like Catholics marry: for life." When you plan on investing long term you think more deeply about what you are investing in. As Peter Thiel likes to ask, has the team been working together for awhile and are they going to give up at the first sign of trouble? Will they enjoy working together or are they just sticking it out for work's sake?  Long term relationships between great people are both emotionally and in business is a lasting source of wealth.

Elon Musk and the First Tesla
http://www.businessinsider.com/tesla-co-founder-sues-elon-musk-2009-6

Monopoly-Genuinely useful, original and new ideas are interesting, beautiful and rare and when effectively made reality are one the most valuable phenomena on the planet. For Warren Buffet, he's happy with just one a year. Such ideas tend to be closely tied to their owners life experience and be protected like a child. To discover them you often have to go where others are uncomfortable going. This is another way in which traditional value investors are actually similar to VC's. They both must look from a contrarian point of view because when everyone is thinking about it, it is likely over-valued. Where traditional value investors find value in macro fears or over-reaction to bad news, venture capitalists tend to find it in novelty and being technologically advanced.  As one of the central ideas in Peter Thiels book Zero to One suggests a successful company really needs a monopoly because competition in fact kills business. This can be a problem where new ideas are seemingly obvious applications of current technology which can then be duplicated.  At the time of Elon Musk's first Tesla, it was effectively a monopoly but as companies like BMW, Audi, Chevy, Toyota Musk will have to remain committed to keep Tesla afloat.

Josh James Domo
http://www.deseretnews.com/article/865575453/

Growth-The widely recognized number one reason that start-ups fail is that they are building something people don't actually want. As Benjamin Graham observed, "obvious prospects in a business do not translate into obvious profits for investors."  Benchmark handles this by focusing on  products that delight the user and  favoring open source and consumer market. This has been essential to their success because the business to customer (B2C) market will always have more growth potential than business to business (B2B). Sometimes in looking for growth, investors want to see revenue, but as with value investing getting caught up in the immediate returns isn't as important user growth. In a sense it is odd than that Benchmark funded Domo as it seems to diverge from these characteristics. DOMO is sales driven over product driven as their CEO openly states: sales is number one. Also, Domo is focused solely on products for CEO's which is not at all consumer market. But even though Domo is well outside of Benchmark's usual sweet spot, as with Tesla, as long as they have the eccentric CEO Josh James, he'll find a way to make it work.

Obviously this is not the longest list start up rules but a place to start when weeding out potentials either as investments or job opportunities. As the examples show, it is nearly impossible to come up with absolute rules because the genius, renegade CEO will always break them. But since Silicon Valley seems to only become more and more relevant as technology progresses, understanding how to find value in the world of tech start-ups seems to be worth the effort.

Benchmark group interview forbes-https://www.youtube.com/watch?v=b_nChmdMOgs

https://www.youtube.com/watch?v=ipmfg-A1LQw    How do we find new companies?

Evaluating the Paypal Spinoff

• Paypal holds more growth potential than marketplace side of E-bay  
• Paypal could see major growth if it gets access to upward trends in mobile payments and other emerging markets 
• Paypal will be challenged by Apple Pay and Google Wallet in mobile and other regulatory and legal barriers
• Paypal should be fairly valuated at around $40-45 billion when it spins off  

     As I've suggested in another article technology has systematically disrupted information based industries and potentially the next industry that's in line is the more entrenched world of finance. One company that is uniquely poised in that disruption is Paypal. According to Paypal's next CEO Dan Schulman "There is no question that change is going to sweep through the financial industry. The financial industry is no different from other industries where technology has touched down."

Background: In late 1998 at Stanford, Peter Thiel introduced the idea of a digital wallet to Max Levchin and Luke Nosek. The three began working on the concept which later turned into the company they founded Confinity.  That service (after a brief stint with Elon Musk as CEO) evolved into PayPal in 1999 and was acquired by E-bay back in 2002. Although integrated with E-bay at this point it was still an unsustainable jumble of ideas kept alive by future Silicon Valley influentials. Its payment volumes mostly came from the E-Bay which made it a natural acquisition target for the E-bay. Paypal survived mainly because most of E-bay users were individuals or small businesses that were unable to accept credit cards. After struggling to find place within E-bay's growing user-base, in the second half of 2004, PayPal Merchant Services began to enroll other online merchants outside eBay as well as reducing fees for online purchases and launching PayPal mobile.

     Since then Paypal's contribution to E-bay's earnings has continued to outpace the growth of its parent company and E-bay may have even slowed Paypal's ability to expand its reach, specifically in hindering the launch of PayPal App. Along the Paypal has been able to acquire other related startups like Braintree, Venmo, card.io, fig, bill safe, and Bill me Later that have roughly fit into its lofty although vague mission statement being the "Web’s most convenient, secure, cost-effective payment solution," in some cases doing it better than Paypal itself.  Still after the spin off, will Paypal still thrive without Ebay's backing? At this point Paypal seems to have more potential and more opportunity for growth than its parent and with its spin-off coming in early 2015 it's worth taking a look where its potential lies, what lurking obstacles might hinder that potential and what a good price for the company would be when it does break away.

http://www.businessinsider.com/the-mobile-payments-industry-update-2014-10

Upside-The biggest immediate challenge and opportunity for PayPal is racing against tech giants like Google and Apple in the sphere of mobile in store payments. Mobile payments alone are predicted to have a 90 billion market by 2017.  Along with these grandiose tech companies, major credit card companies will also vying for this space. Paypal has already preemptively produced an app although it has still fallen short of anything that is as efficient and easy to use as traditional credit cards. Google wallet and Apple pay have the huge advantages in this area because they are backed by large established databases and services customers already trust. At the same time the size and scope that these companies work under could slow down their ability and motivation to profit from this area of tranformative growth.

In Paypal's favor, its future CEO Dan Schulman seems to be suited almost specifically for this task. His experience came from telecom starting out as an AT&T executive then in 2001 growing Virgin mobile USA to be acquired by Sprint in 2009. Most recently he has been trying to expand the reach of American Express to people without access to traditional banking by using digital alternatives like mobile. While in this endeavor, he caught the vision of a tech driven sea change in how banking can be done.  Driven by a desire to give banking access to under-served populations, and undo the convention that "its expensive to be poor" he says: "I believe that we are entering into the era of the non bank. An era where consumers have all the power of a bank branch in the palm of their hand. Its not hard to imagine that technology is going to redefine the world of consumer retail banking.  Digital wallets are morphing into tools that can serve as a real alternative to bank branches." And while I don't think we will see traditional banks disappear altogether I do think he is on the right track for growth and how to reach youth and lower income segments.  It also suggests that Schulman will do whatever is necessary to cut costs to the user while working to make the Paypal app more intuitive user-friendly. I also think he may also try to make other relevant banking services accessible to Paypal users through the Paypal app. While he has the right direction and motivation I could see him struggling to adapt to a more startup, innovative minded environment and pulling together the right team and working to get the technology right as his background is more from an executive and finance mindset.

In addition to a CEO who will pursue his vision of bank alternatives, Paypal has already established agreements with retailers that it will could try to expand into in store purchases. Most likely Apple, Google and Paypal grow with this trend with Paypal getting the most movement if it is able to make a compelling app and partner effectively with banks or credit card companies in the process.
 
   In addition to replacing credit cards there is also a  growing market of peer to peer digital payments, Mobile peer to peer and Paypal at this point is by far the most recognized and trusted service positioned for growth in this field.  Along with direct peer to peer payments using Venmo, growth could come in this segment as services like Uber, Lyft, AirBNB, and other mobile transactions rely on its service to make their businesses work.

http://www.cardfellow.com/blog/paypal-here-vs-square/

     In a related application Square has enabled transactions for small business and opened up a new market which can work with Paypal and which  Paypal has countered with its own mobile transaction device to compete with square.
As other small businesses and store fronts convert to using a computer checkout they often favor this convenient device for credit card transactions. Although insert will  become obsolete with implementation of mobile payments, it will likely continue to fill a necessary niche for a long while before payments go completely to smart phones.

Risks-Some obstacles that Paypal will continue to face are similar to ones that it has faced since it began:
-Continuing to gain the trust willingness of customers to use Paypal without direct support from E-bay
- Still being unproven method of handling money and continuing to get access to more retailers and users to give it a chance despite many drawbacks
-Pressure from Visa and Mastercard older, established systems that have huge experience and databases that are not going to give up their position willingly. For Paypal to compete with the credit card system they would need instant transactions rather than waiting for days for orders to process as they currently do with E-Bay
- Paypal has many of the safety issues of a bank, hackers and fraud that have used its open nature to take advantage of Paypal users. As Paypal grows it will continue to have to deal with regulation and how to interface with purchases in other countries etc.
    Along these lines my own experience has been that when selling larger priced items on E-bay there are offers from scammers in questionable locations like Nigeria offering to buy the item. I can only guess, but I imagine once they see the item being shipped they cancel the payment and take advantage of the time lapse in payment to take the merchandise and run. Luckily I'm not naive enough to send a $500 camera to Nigeria but this is just one anecdotal sample of likely countless other instances where users have hacked accounts and found other fraud angles to take advantage of the weaknesses in this new type of transaction. As with many types of new technology and the sharing economy, it assumes a certain level of intelligence and self reliance in its customers which is wonderful but only works if people actually live up to these ideals. If customers act like users in the old banking system and care more about fraud than getting things done better the system will not move forward.

Conclusion- While about a third of Paypal's payment volume still comes from E-Bay, there seems to be little doubt that the more profitable of the two companies will ultimately be PayPal. Current E-bay CEO John Donahoe has indicated that "While eBay’s marketplace, the company’s core business, accounts for over 30% of PayPal’s annual revenues, that figure will dwindle to just 15% within three years. And while the Ebay's $9.9 billion in revenues last year eclipsed PayPal’s $7.2 billion, PayPal’s 19% annual revenue growth outpaced Marketplaces’ 10%."  As seen in the chart below Paypal has grown consistently along with E-Bay since 2002 and went from making up 18% of its revenue to 38% in 2011.

http://vator.tv/news/2012-07-08-now-10-years-after-being-acquired-paypal-going-strong 

         So there's a lot of  room to grow and a lot of potential, but what it actually worth? Both E-bay and Paypal have about 150 Million users. In E-bay's 2012 Revenues was about $16 Billion in 2013 and  probably around $19 Billion in 2014. As Donahoe points out 40% of that is coming from Paypal so simply taking 40% of E-bay's current would give a rough valuation of  $40-45 Billion not factoring in Paypal's more optimistic future. For me anything below $40 Billion divided by the proposed number of shares would be enough margin of safety to get a stake in Paypal growth. The growth will likely be a very bumpy ride but if you stick it out, there will quite possibly be solid upside that will continue to compound as it plays an integral part in financial transactions for a long time to come.

Bhutan House

A quick colored pencil of some traditional Buthan architecture I have been looking at lately. I like the low, slightly sloping, horizontal lines and wide intricately decorated roofs that flow seamlessly into the landscape. Their landscape actually reminds me a little of the hills of Northern California (maybe that's just me) but I feel like the style would be fitting for the Asian influence there. It does slightly remind me of some architecture is Berkeley but apparently University of Texas El Paso campus has a heavy Bhutanese influence.  

A Grocer's approach to health insurance- Rewarding health with wealth

If you work for Whole Foods or Safeway, staying healthy is more than just good advice, it also means better benefits. As of 2010 John Mackey the CEO of Whole Foods released a letter that proposed an interesting new method to giving employees discounts. As seen below, this letter offers employees a better discount as they perform better on tests of smoking, cholesterol and BMI. John Mackey has the right idea as there may be few other individuals who can better combine a better understanding of health and free market enterprise for the benefit of the general populace and really, if you're thinking about working at Whole Foods you should expect something like this. Along with the discounts, Whole Foods offers a custom insurance plan for its team members as well as a total health immersion for members that are especially sick or struggling with weight. While for most team members the discount they can receive may not have much impact on them financially its is a small start and may be just enough incentive to nudge them in the right direction.

http://lol-rofl.com/treadmill-cartoon/

This attitude that Whole Foods is presenting seems not to be that far ahead of  other organizations to encouraging workers and citizens to take their health and finances into their own hands.  The former CEO of Safeway Steve Burd, was an early adopter of financial incentives to help employees cut tobacco use and reduce blood pressure and cholesterol levels. Burd has said that obesity and smoking rates among employees in the voluntary program are roughly 70 percent of the national average. Like their employees' bellies, Burd testified before congress that his company’s health care costs have been flat “while most American companies’ costs have increased 38 percent over the same four years.” This topic of how much employers can encourage their workers to stay healthy is one that has been debated and addressed initially by the US government under HIPAA and then expanded through Obamacare.

Currently companies like Scott's Miracle Grow, IBM and even the state of Alabama are thinking along the same lines and have already applied policies that will reward healthy living. Along with state and businesses adoption of health promoting incentives, health insurance companies and hospital groups are beginning to adopt programs with similar incentives. So these wellness programs designed to motivate workers to adopt healthy lifestyles aren't going away, and if anything are part of a trend that will likely continue to grow.

The bulk of the US's health care costs come from preventable diseases. Obviously these incentives wont completely change attitudes or the world, but could be enough to give an extra push to people that just need an excuse to eat right or do things better. Of course there are a lot of genetic and otherwise currently un-treatable diseases, but the since its the preventable ones that are hurting us the most they are a good place to start. One objection against this incentive based approach brought up by AARP is that if you give one person a reward that someone else will end up having to pay for it. This shortsighted thinking fails to see that any immediate cost difference will soon be outweighed by the benefits as long term costs are severely reduced because the program is based on preventative steps shown conclusively to prevent disease. Giving people incentives to stay healthy is an obvious application of an ounce of prevention to avoid having to pay for a pound of expensive cure.

http://www.brit.co/stars-stripes-in-fruit-form/

In reality one of the greatest downsides to this approach may to those who are not working and continually punished by a system that only rewards people that only share its attitude. This could cause people who are already struggling in other areas of their life along with their health not be able to find employment. So then, the challenge is to keep it a positive non-exclusive incentive. Rather than punishing or excluding people through hiring, companies would need to design incentives that will take current workers and subtly encourage any step they take to pursue better health as Whole Foods does. Another potential downside I see is where government or companies use this as an excuse to intrude on people's personal lives. Tests about depression and other more personal matters may not be desired, but I think as long the the checks are moderate and left to the private sector this could be a very helpful tool to urge the working American public in the right direction. It will work best for those who just need a small excuse to change things. As people actually change their habits they create less costs because in theory, the illness will be prevented. As long based on clearly demonstrated data everyone can potentially benefit from incentives that motivate people to take better care of their health.

http://jezebel.com/5456561/weigh-less-pay-less-whole-foods-offers-discount-based-on-bmi

Americans Support Health Insurance Discounts for Healthy Lifestyles
http://www.rasmussenreports.com/public_content/lifestyle/general_lifestyle/may_2012/americans_support_health_insurance_discounts_for_healthy_lifestyles

http://newsroom.intel.com/community/news/blog/2012/5/16
Future Food Service-John Dickman

7 Reasons to Like Wes Anderson

Wes Anderson's movies are the indie music of film. Like the folk, indie music, Anderson will never be on the same level mass distributed franchise media because he doesn't excel with hi-tech, digital, special effects laden, eye-catching work. He will stay in a hallowed realm in the entertainment industry; as he consistently produces films and also draws in an increasingly interesting troupe of actors. Unlike high-budget digital films, if you are not tuned in to the subtleties that make his films appealing, you might call them dry, slow or pretentious. Still, I think there's a level on which most people are entertained by Anderson's work because despite their niche appeal, they are still very successful at conveying stories that capture human quirks and idiosyncrasies in a humorous (and highly-stylized way). My feeling is that he will continue to make films and although they may not be as fiercely original what the ones he first wrote Owen Wilson, he will further explore his storytelling ability and artistry further.

1.The Kids of Rushmore  To get to get to know where Wes Anderson comes from you don't have to go much further than his second film, Rushmore. Like the protagonist played by Jason Schwartzman, Anderson attended a private school (St. Johns in Houston, TX) when he was young. He projects himself onto Schwartzman's character, whose picture might be found in the dictionary under "precocious." He is a natural organizer and leader, and is in his element as he confidently strides around looking over his busy productions and discussing the details of some loose end. Underneath Max's accomplished exterior (and similar to Anderson's own school years), there is rebellious adolescence, dissatisfaction with his own father and contempt for other authority figures.  This growing conflict eventually climaxes and Max is defeated and crushed, giving up all pretense of greatness. As Schwartzman's character accepts his dad's own humble circumstances, I think Anderson also expresses (through this film) acceptance of his own background with its shortcomings and humble situation. This is one of his better films because rather than a soul-less upper class searching for meaning, it shows a dissatisfied middle-class striving for recognition, and learning self-respect among-privileged peers. I enjoy films where we see the development and growth of Anderson through his characters. I love the conflict, competition and hilarious pranks that the struggle produces.  As Anderson projects himself onto the young protagonist, it shows another theme repeated in his films of respect and recognition of children as worthy peers.

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2. Lasting friendships When asked what the defining characteristic of his fans is Anderson said that his films appeal to outsiders. Individuals that don't belong find identify with Anderson's films. It might sound cheesy, but friendship is a theme at the heart of Anderson's movies and it is a theme that has lent warmth and timelessness to Anderson's films and is true to Anderson's own experience. The idea for Rushmore was conceived by Owen Wilson and his college roommate in Austin, Texas as the two together plotted ways to get back at their landlord.  Like Owen Wilson's character in the Royal Tenenbaums, Anderson seems to fit in well with the Wilson family and included Owen's other brothers Luke and who are all present in both films and the main characters in his first film Bottle Rocket and Anderson has continued to remain friends with Owen to this day. So while Anderson continues to collaborate on films with many others, his most successful and memorable films were written teaming up with his old pal Owen.

3. Bill Murray and the Gang. The same goes true for the other members of Anderson's acting troupe. After he somehow managed to recruit Bill Murray and Schwartzman for Rushmore he has continued to develop these working friendships and has never felt a need to replace them for newer faces over the years even as he recruits more respected actors to his films. Along with Bill Murray, Anderson seems to recycle other sidelined actors like Jeff Goldblum and Adrien Brody that otherwise may have faded slightly  further into obscurity. They still have an appeal and juice, just not enough to dominate the limelight and Anderson, is more than willing to use his films as an excuse to continue hanging out with this amazing group. If nothing else Anderson's movies have become a fitting museum for Bill Murray's comedic legacy.
   
Many people are surprised when they see Royal Tenenbaums for the first time with its A-list actors like Ben Stiller, Gene Hackman, Gwyneth Paltrow, Bill Murray, Danny Glover and Alec Baldwin, but in this film more than any other Anderson demonstrated mastery at weaving so many unique personalities into a cohesive and entertaining story. Anderson is completely competent with high level actors, using  his classy, not confrontational approach yet still keeping a very clear vision of how he intends his movies to look . He allows actors to work without in a straightforward less demanding production. They might not gain any major attention, but they don't need it and are okay with the lower stress and easier pace of these more marginal films. This is Anderson's circle and in fact, at any point where Anderson has tried to edge into large productions with heavy action or special effects like the Life Aquatic or Fantastic Mr. Fox, it has ended in box office disappointment.

4.  Nostalgic Musical Selection
 Even in Anderson's least successful films, the music selection for are a masterpiece unto themselves but even more amazing is how he brings the music to life through the movies. For some of the songs its as if this was the music video they never had but needed. As with his actors, Anderson has a continuing working relationship with Mark Mothersbaugh who has contributed theme music and filler music for Bottle Rocket, Rushmore, The Royal Tenenbaums, the Life Aquatic, The Fantastic Mr. Fox and Moonrise Kingdom. The other most common songs and bands from the 70's resurrected through Anderson's signature slow motion or underwater shots. Bands like the Beatles with singles by Nick Drake and less heard tracks by Rolling Stones stones sprinkled with a collection of tastefully selected classical music. Even though Anderson's vacation to India excused by the productions of Darjeeling Limited (I would have preferred somewhere closer to home like central America) fell short with limited viewers and a hollow plot, his music selection showed through unforgettable.

5. Deliberate Dialogue. His dialogue makes little pretense at being natural or reflecting real life which actually makes it even more memorable.  Like many of the shots in his films, it is so obviously crafted that while it can't be mistaken for a casual conversation that same awkwardness gives it a human touch.  The characters are direct yet polite, not violating and social norms until the the situation has become so extreme that they are forced to. In some ways it reminds of the slow moving, hand crafted dialogue from classic films that expresses itself succinctly if not poetically. Anderson's phrases seep into one's memory and come out often and they could make for an meta type play. Clever comebacks are constant because the characters are quick-witted and the humor is woven into the events themselves. The characters are not trying to be funny and their humor comes out as an extension of their already developed personality. Along with the subtlety in the characters, anyone with an eye for detail will notice the shots are minutely managed and color and symmetry are closely calculated.  Along with the dialogue almost every shot in Anderson's films  are deliberate but I think the tightly written dialogue is something rarely seen anymore and what I enjoy most. 

6. Family. Movie themes of family failure and conflict and reconciliation are at the center of almost all his films along with character introspection and subsequent development. In particular The Royal Tenenbaums came out before Arrested Development or Modern Family but I would trace the cultural roots of both back to this, Anderson's finest film. Both Tenenbaums and Arrested Development include formerly successful families having to come to terms with what really holds them together after their fortune and fame have been stripped away. The more you compare the two, the more similarities can be drawn; one of the most obvious is that both include something resembling incest between two family members which is source of comedic material and drama.  In fact Arrested Development creator and head writer Mitchell Hurwitz said that when he saw The Royal Tenenbaums, he already had the idea for Arrested Development in mind and thought, “Well, I guess I won’t be doing that,” but subsequently changed his mind. Again, Children are also a consistent and prominent presence in Anderson films and they are presented in as real characters who demand respect, not mere tolerance. He does his best when working with intensely felt emotions buried under social conventions which makes for forced understated and awkward interactions. 

7. Low Budget. Overall watching Anderson's movies is like eating a meal that is full of organic eclectic ingredients, flavorful yet not overtly appealing. There is a methodical feeling to his films and unlike other mass produced movies that leave you feeling gross, lazy and overwhelmed at the end you feel more like you have been out with old friends in  the clean, calm, organized (though quirky) world of someone who thinks clearly and deliberately about what they're doing. Anderson may not do as well channeling huge amounts of  cash into higher budget action productions that will leave you reeling yet you will still laugh, wonder and be drawn in by unique characters and their struggles. I tend to think that Anderson will continue for many years ahead to make films and I would really like to seem him write another film with Owen Wilson. I think Wilson's foray into historical fiction like Night at the Museum and Midnight in Paris type would be a perfect fit for Anderson with just the right amount of fiction to take the audience beyond reality but not so much that its totally reliant on digital, high tech special effects and could bring Anderson further into mainstream. Either way Anderson will never have the raw violent emotional appeal that captivates the masses and for those of us who do appreciate him, we wouldn't want it any other way.

Lazin' on the bay

I was interested in the reflecting light on the sea lions so I decided to paint a group of them. As usual the painting doesn't really do justice to the real thing, but its more about the process
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