Science and Technology: Some thoughts on the ado about crowdfunding fails

Or, caveat emptor always applies.

If you’re at all like me and follow the crowdfunding world with a sense of excited curiosity, then you can’t help but to have noticed the crop of “how not to get scammed” articles littering the tech writing world in the wake of the FTC ruling over a known Kickstarter based fraud. I think the thing that surprises me the most about all of this is the apparent naivety it seems to reveal about the crowdfunding world.

Don’t get me wrong, because I don’t think even most crowdfunders are naive. Rather, I think enough of them are that their collective outcry when a campaign fails or turns out to be a scam gets a lot of attention. And that attention seems to come from the fact that not a small number of people think the crowdfunding world is somehow immune from the risks that have attended all ventures since the beginning of mankind.

Quite to the contrary, crowdfunding is its own unique kind of risky venture because it lets anyone who wants to help incubate ideas that other forms of venture would never would probably never let see the light of day. It democratizes the incubation of ideas, and as anyone who has paid attention to democracy will note, it’s a messy, error-prone process.

So, yes, crowdfunding efforts are going to fail. Even ones for great ideas. Scamsters are going to succeed in separating people from their cash. Even seasoned venture capitalists fall for that (Dot.com bubble or Enron anyone?). Neither of those facts make the process bad. Rather, they reveal crowdfunding has risk. If that bothers you, don’t participate.

As for me, I take the risk because I enjoy the potential outcome. That’s worth losing some money once or twice, because the potential reward so often outstrips the risk.

DLH

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Worldview: Thanksgiving, Black Friday, Liberty, and Choices

Over the past several weeks, I’ve seen a lot of posts from a lot of people on the idea of shopping on Thanksgiving, Black Friday, Small Business Saturday, Online Monday, all all the other money spending days before Christmas that have come to represent our holiday season.

I respect the sentiments of the people who want to salvage holidays and redirect the money spent on those days to other things. I also respect the liberty people exercise when they choose to work and shop on those days. Whether or not I choose to participate is irrelevant to what anyone else decides to do, and everyone should be at liberty to make their own choice.

But understand, that whatever you decide to do, you are making choices. Powerful choices.

You see, the most democratic action any person in the world engages in is how he or she spends money. In spending money, each person decides what, how much, and to whom his or her money should go. That choice reverberates with every person who touches every dollar someone spends and echoes around the world.

I could selfishly try to persuade people to spend money the way I think it should be spent, but the fact is that persuasion is just my opinion. Sure, I think people should shop as locally as possible, select merchants that treat their employees fairly and their customers honestly, and use their money to help their neighborhoods, communities, and states before anything else. But, I realize that opinion is just one among many.

I don’t care all that much if someone does or does not decide to shop on a certain day or a certain place so much as I care whether that person thought through what they were doing before they did it. What I want during this holiday shopping season–and during every other time anyone spends money–is for people to be aware of what their money is doing. As surely as I want people to vote with a full view of the consequences in mind, I want them to spend with the same way of thinking.

I suspect that, if people thought more about how they spent their money before they spent it, the world would look quite a bit different than it does. So, I challenge you: prove me right or prove me wrong. Think about it and be content with your choice.

DLH

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Thoughts from Innisfree on the Stillwater: Taking the plunge!

While my wife and I have been living and working on Innisfree for the last three and a half years, it has always been something of a part-time job until now. Late last year, we paid off the last of our outstanding debt and as a result, we have decided to have both of us working on the farm as our primary occupation.

While this may sound idyllic, the fact is that it is a leap of faith and a huge risk. Even in the best of circumstances, farming is not a high paying occupation, and the cost of living modern life is higher than most people realize. Nevertheless, it is a risk we are willing and able to take.

Here’s to hoping and to the future!

DLH

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Science and Technology: Some thoughts on Gingrich’s moon base idea and on why America is losing the technology race

My first thought on reading the predictable backlash against Newt Gingrich’s moon base idea was, “Americans suck.”

I thought that because the backlash is so short-sighted of all the positive things building a moon base would bring to the table. It’s not like the money and effort to build a moon base would be poured into a hole. It’s not like the science and technology needed to make a moon base happen would not spin off into all sorts of other applications. It’s not like a moon base would go unnoticed, failing to fire imaginations and motivations.

One of America’s great historical strengths has been its capacity for embracing and solving hard problems in ways that benefit all of humanity in some way. Yes, that is a grandiose claim, but it is also true. Time and time again, Americans have done things that have boggled the minds of the rest of the world. Look at our industrial prowess during World War II. Look at what we accomplished with the Apollo Program. Look at what we did by inventing the Internet.

Yet, I think most Americans think those efforts and the idea of a moon base are a waste of time not because those ideas are not worthwhile but because they imagine the money better spent on themselves.

You see, the reason there has been such a backlash against a moon base is because people want to use that money to pay for their non-production. Sure, we call it Social Security and Medicare, universal healthcare and unemployment, but I call it not doing anything except consuming more. Harsh? Yes. True? To a great extent.

Let’s say, for example, that putting a permanent base on the moon would cost  $1 trillion. That’s $1 trillion of scientists and engineers developing the technology. That’s $1 trillion of factories building the parts. That’s $1 trillion of an army of technicians building and launching things.

Further, that’s $1 trillion of houses being built for the people doing those things. That’s $1 trillion in tax revenues for localities and school districts. That’s $1 trillion in groceries and restaurants feeding people. That’s $1 trillion in shopping malls, gas stations, and hair salons.

Besides the fact that $1 trillion opens the door to all kinds of possibilities we can’t even imagine right now simply because we don’t have a base on the moon.

Nope, instead we’d rather retire and hang out on the taxpayer’s dime.

Meanwhile, the Chinese, Indians, and Russians don’t feel that way at all. One of those nations is going to build a moon base even if we don’t. Then, suddenly, nobody will be talking about the amazing things America once did. They’ll be talking about the amazing things the Chinese or Indians or Russians are doing wile the Americans were all retired and hung out.

Yeah, Americans suck.

DLH

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Farming: MENF 2011: Show me the money

Sometimes its easy to get lost in encouraging people to grow their own food and forget that this stuff still costs money. As idealistic as we may all want to be, at some point we have to pay the bills. It turns out paying the bills may not be as hard as you might think.

There are as many ways to make raising your own food pay for itself as there are people trying to do it, but I’ve noticed that most of the cash efforts seem to center around two kinds of things: greens and chickens.

First, the greens. Greens, sprouts, and salads have become the most common acknowledgement most people pay to trying to eat healthy. If you’ve noticed the lettuce display at your local grocer, you will have noticed people seem to be eating a lot of the stuff, and they seem to be willing to pay quite a bit for what they get. As an aspiring food grower, you can tap into that market, especially in the off-season.

The simplest way to grow such greens is to set up a simple greenhouse, hoop house, cold frame, or low hoop over a row of greens. One speaker I heard recently grows sprouts and microgreens on an Ikea bookcase fitted with cheap florescent lights from Lowes. While it is important to do your research and make sure you’re doing it right, growing greens can be simple and produce a good crop year around.

Of course, marketing such a product can be its own challenge, but that’s where due diligence comes in. Let’s face it, family and friends and word of mouth is the best way to sell your product. Local year around farmers markets and greenhouses are often looking for new sources of the products they sell, or you could sell them there yourself. Try getting your product into a local restaurant by giving them a sample of what you produce.

Second, we have chickens, and really poultry of just about any kind. Poultry flocks give food growers multiple benefits, but the one we’ll concentrate on here is the income from eggs and meat. Depending on your market, pastured chicken eggs can go for as much as $6 a dozen, and a flock of 12 birds can produce as much as 4 dozen eggs a week, though it’s sometimes a less. In addition, laying hens can pay for themselves twice, once in the eggs they produce and once again in the meat they produce later. Keeping a few roosters on hand can guarantee meat chickens as often as every 16 weeks depending on the variety you raise.

Granted, poultry has a higher start-up cost, and you may incur ongoing costs as a result of needing to buy feed, but I think in the long-run chickens are one of the simplest and most profitable undertakings any food grower can invest in.

There are many other ways you can make money from your food growing operation, limited only by your creativity and willingness to put out the effort. The key to these undertakings is to keep them as simple as possible and to remember that small steps are better than no steps at all. Don’t get impatient if things don’t happen right away and keep focused on the result instead of the work.

DLH

Read more at my Farming site...

Worldview: More on the cost of reality

I love that the debate over stripping public unions of the collective bargaining rights has degenerated into an argument, essentially, about protecting union negotiated entitlements. In embracing this debate, both sides have distracted themselves from reality again–that is, the thing that is going to happen whether unions can bargain for entitlements or not.

I will focus on Ohio because I am far more familiar with its finances than I am with Wisconsin’s, but I believe the problems are similar in each state.

Various researchers, including the states own Office of Budget and Management, project that Ohio budgeted to spend somewhere between $5 and $10 billion more than it will collect in tax revenue in 2011. This reality is part of a general trend around the country that has states spending more than they tax even as they find their ability to borrow more and more limited by declining credit ratings due to the immense amount of money they have already borrowed.

This state of affairs threatens to become a crisis for Ohio because the state could have no capacity to fund the programs and services it has obligated itself to fund at the levels it promised to fund them as soon as this year. Nowhere is this potential crisis more evident than in public schools.

There is also a hard place for this state financial crisis to land: many school districts are already broke or are so close to being broke that the difference is irrelevant if funding gets cut by the state. According to the Ohio Auditor of State (.pdf), 15 districts are currently under fiscal watch or emergency, while 60 more just emerged from such a status on 1 January 2011. Around the state, districts are warning that, even if new levies pass this year, the districts will be forced to make cuts and lay off teachers.

So, while so many people seem to be focusing on the question of whether teachers–and other public workers–have the right to bargain contracts, most people seem to be ignoring the fact there may be nothing for them to bargain those contracts with.

This reality is because of the fact that Ohio is broke. It’s not just in 2011 either. Some budget estimates show Ohio running deficits of $5 to $8 billion for the next 10 years, deficits the state has no funds to cover and which it may not be able to borrow to make up for.

It is from these conditions that the anti-bargaining law originated. Republican lawmakers in Ohio–and Wisconsin, Indiana, and Tennessee–see public unions as a target of opportunity in what is going to prove to be a decade long budget battle to somehow preserve the financial sovereignty of their state. There are, in my opinion, all kinds of problems with the law and with the approach the Republicans have used, yet no one can deny that part of the problem faced by states, municipalities, and school districts right now is the cost of union negotiated compensation packages those entities simply do not have the capacity to pay.

If these entities do not have the capacity to pay, it does not matter if the unions have the right to collectively bargain or not. I suspect that, within the next few years, entire school districts and smaller municipalities are simply going to fold–disincorporate, which is essentially bankruptcy–because they no longer have the capacity to maintain even a fundamental level of the services they are supposed to provide. At that point, even if teachers, police, and firefighters have contracts, it will not matter because the entity they have a contract with has ceased to exist.

From my point of view, if legislators and unions alike want to prove they have their constituents best interests in mind, it is a resolution to this disastrous state of affairs that they would be debating instead of whether unions can collectively bargain contracts with failing entities. Yet, instead they debate about the fringes while the core is collapsing, and when it is done, all of their effort will have been expended for nothing.

DLH

Read more at my Worldview site...

Worldview: The cost of reality

I’ve been watching the progress of the collective bargaining revocation bills in Wisconsin and Ohio with great curiosity and not a small amount of amusement. What I see on all sides of this debate is a failure to deal with reality.

Teacher’s unions fail to understand that there is no more money. Wisconsin is in the hole $2.2 billion. Ohio is in the hole $7 billion. Those deficits are only the ones for 2011. Sure, they are just trying to protect their own, but at what cost? What else has to get cut to protect them? Who else has to pay?

On the other hand, you have the conservative law makers and those who elected them. They claim union busting–because that’s what revoking state collective bargaining agreements really is–will save the tax payers millions. That’s true, but so would cutting state programs, especially the costly social welfare programs even conservatives are addicted to.

The problem, as I see it, is that nobody wants to admit the truth: we’re not going to get out of these problems with selective, politically motivated cuts. Instead, we’re going to have to make far-reaching, across the board cuts at all levels of government that will last decades, and those cuts will only serve to allow us to tread water.

Unfortunately, no one is listening. Liberals and progressives want to tax more and spend more. Conservatives want to attack their political opponents’ pet programs without doing anything real to face the problems. Libertarians are too wild-eyed and disorganized to do anything other than make incoherent noises.

In the midst of all of this, our nation is failing. Our currency is devaluing. Our economy is not creating jobs. More than half our citizens effectively do not pay taxes, and the other half are paying so much they can’t make anything happen. Our tax system penalizes success. Our laws make starting and maintaining businesses unnecessarily complex. This year, local, state, and federal governments will spend between $2.5 and $3 trillion more dollars than they collect in taxes. The total US debt burden carried by all levels of governments could exceed $25 trillion–or twice the entire GDP of the US in 2011.

If we really want to fix the problems that got us here, we have to end–no, destroy–the disincentive to perform, succeed, and innovate on the strengths of our own merits. We have to wipe out the notion that we can somehow treat every individual and situation as some kind of an average and deal with reality in all its uniqueness and complexity. For the first time in decades, we have to think, act, and react in accordance with the situation we have, not the one we are convinced we should have. We have to return the bulk of control to the individual and stop expecting governments to take care of us.

And all of these solutions are going to happen whether we want them to or not. We cannot continue what we are doing because what we are doing is failing. The question that remains is whether we participate in the process by which the next thing comes into being or whether we stand and watch as the terms are dictated to us.

I suspect most will do the latter, which is why I’m pretty sure you should be getting ready for some really tough times ahead.

DLH

Read more at my Worldview site...

Worldview: Learning from my mistakes

One of the advantages of reading weblogs written by honest people is that they tend to share their experiences, even when they happen to be negative or embarrassing. I try to do that very thing with my weblog, and I do so because I hope that other people can learn from my experiences without having to go through them themselves.

As it turns out, I committed one of the cardinal sins of online business in using my debit card as a means of conducting transactions instead of using a traditional credit card. Why is this a sin? Because, unlike credit cards, which have very developed fraud and dispute resolution protections as part of their terms of service, debit cards function just like cash, even when they have the Mastercard or Visa logo on them, and most banks are not as willing to help you solve fraud or dispute problems the way the credit card companies might. Further, debit cards take the money directly from your account while credit cards hold those transactions in a buffer account.

Having made this mistake, I joined the nearly 20 percent of Americans who have had their identities stolen since the government first started keeping records of such things. I will probably be able to resolve the problem because I caught it soon and took aggressive steps to stop further theft, but the fact of the matter is that it never needed to happen. Sure, someone might have compromised a credit card, but the damage would have been less and less enduring.

So, the lesson I want you to learn here is that, if you are using your debit card to conduct online business, stop. Use a credit card instead, or if you don’t have a credit card, look into using cash proxy services like PayPal or bank payment services. Do not use your debit card because you cannot protect your money if you do.

Further, make sure you are using strong passwords online. Do not use the same passwords for every site. If you need to write your passwords down, use a program that can encrypt them like KeyPass. Never, ever use personally identifiable information in your passwords–that includes names, dates, phone numbers, or anything that might be able to be found publicly.

Learn from my mistake and avoid letting it happen to you.

DLH

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Worldview: The razor’s edge

Last January, I started an experiment to see how many times I could use a single disposable razor blade before it was unusable. I discovered several years ago that the thing most likely to cause the blade to become dull was the moisture, oils, and salts left over from the shaving process instead of regular use. Critical to this experiment was the fact that I dried the blade after each shave and stored the blade face down on a tissue to wick away residual moisture.

A year later, I can report that I used the same blade to shave 85 times over twelve months, an average of 7 shaves per month. Granted, I do not shave everyday as some people do, but using this evidence, this blade would have lasted a daily shaver as many as 12 weeks. For a daily shaver, this would be a savings of around $50 over 12 weeks if you used the blades I use and replaced them weekly, or about $215 per year.

Further, even after 85 shaves, the blade I am using now is still usable and probably will be for some time to come. I expect that I may get as many as six more months before it has to be replaced, and it could last another year with proper care.

Now, I grant that I do not shave everyday, so daily shavers may get less performance, but the evidence so far is clear: it is possible to save hundreds of dollars a year on replacing razor blades by simply drying them before you put them away.

Why go to all this trouble to prove something like this? Because I believe frugality is one of the ways we are going to dig ourselves out of the mess we face as individuals and as a nation in the years ahead. I believe spending less, saving more, throwing less away, and reusing whatever we can are critical parts of making our way of life better.

Do you have other frugality tips? Let me know, and I will post them here.

DLH

Read more at my Worldview site...