The primary reason I stopped posting on The Strategy Blog two years ago was that the posts that were the most popular were the least fun to write. In all the excitement of launching the Blog in July 2009, I wrote my friend Taylor:

I intend to use the comprehensive financial modeling tutorial as Chris Guillebeau’s idea of “flagship content” and then relate many of the business strategies I discuss back to a module or modification that can be made to the financial model made in the tutorial. For example a discussion of search engine marketing would include a section on how you would create a module for the financial model to model revenue growth if you were only using CPC marketing. My primary goal with TSB in general is to develop a community that will drive name recognition, which may then lead to profitable opportunities.

[. . .]

Considering all of the people searching for financial modeling, I think very few will actually complete a six hour tutorial on completing a linked financial model, those that do probably would not make good customers because they have the patience to look for a free alternative elsewhere or would bargain you to death. Of the majority that skip to the end, I will have several niches (1) those that get it and can make use of it as is, (2) those that need help but are not willing to pay for it, and (3) those that need help and might be willing to pay for it. I think group three is a viable business segment that merits focus.

Given the psychological theory of reciprocity and that they have probably already invested some time in the modeling method I use, they are likely to pay me market value or higher to help me solve their specific problem that they cannot themselves.

I still believe the plan was solid, but I didn’t count on my own wavering interest (well documented Excel posts are time consuming and boring to compose, which leads to a lack of self-motivation), going back to a job in banking (live in Excel all day, why would I voluntarily spend all night too), and the limited overall demand for technical posts (Google Trends). I did attempt non-technical strategy posts, but they were less successful (see 2011 Top Posts as evidence). Regardless, both types of posts led to quite a few interesting public and non-public conversations, however as I was no longer consulting they were of limited benefit. Unintentionally, they also left me feeling embarrassed and demoralized that I hadn’t finished the promised tutorials and lacked the motivation to do so. On a positive note however, I found that while there wasn’t a great quantity of demand for technical financial modeling tutorials, the demand for financial modeling knowledge in developing markets (Southeast Asia and Africa) was acute. [Side note: this only reinforced the strong demand I saw when teaching an M&A course in Malaysia and (unsuccessfully) bidding to teach a credit risk management course in Africa, both prior to the start of this blog.]

What now?

As I’m back to posting, does that mean I have overcome the self-imposed demoralizing embarrassment? I mostly have, but you shouldn’t expect any technical financial modeling posts to appear on The Strategy Blog for the foreseeable future. I’m falling back on content I can reliably and consistently create: a reporting of what I genuinely find interesting in business and strategy. It will be closely related to what you see in my Twitter account. I also anticipate largely adopting the Project Argo blogging format:

At some point during our planning discussions for Argo, our project director Joel Sucherman borrowed the metaphor of the three-legged stool to describe the three elements we felt were essential to each site:

Strong original content. One surefire for a site to become a destination is to consistently provide distinctive, informative, enjoyable stuff. We encouraged the Argo editors to put most of their effort into reporting and writing enterprise posts on their beats. I’ve been particularly vocal about the power of the quest narrative as a wellspring for compelling reporting and storytelling, and about the importance of developing deep understanding of a topic to find the most important stories within it.

Community and conversation. In the age of social media, we all know that conversation is a powerful draw for people. Sparking conversation – being the subject of watercooler chatter – has long been seen as a primary goal of journalism. In developing Argo, however, we stressed the role of community and conversation not just as an outcome of the journalism, but as an aspect of it. We encouraged the bloggers to treat comments as content, to turn their sources into commenters, and to take feedback – both praise and criticism – seriously.

Smart curation and aggregation. As everyone becomes more and more flooded with information, people increasingly look to journalists not just as discoverers of new information, but as filters for all the stuff that’s already out there. Every good journalist is an avid consumer of information on her beat; the best digital journalists are just as ardent about sharing the best of what they find. We stressed the value of informative, well-synthesized aggregation to all the Argo bloggers throughout the project.

Each site placed a different emphasis on these three components, but they were all present.

[Note: fascinating detail on the Argo Project can be found here and here]

While I’m largely reporting or curating what can be found elsewhere (and adding a small amount of unique content), in the larger context I’m seeking to tell a story about the world we live in. I’ve often been told that I have a unique or interesting way of looking at the world, weaving disparate events and ideas into a single narrative, and that is what I want is best served in this blog format. The greatest value I can provide to others through this blog is by analysis and brining disparate ideas together, and see where that takes me. To quote Nieman Lab’s David Skok “The aggregators of today will be the original reporters of tomorrow.”

I can honestly say that I don’t know what direction the blog will take, or if the content of my new posts will be worth reading. But that is my drive – only by taking some personal risk will I continue to grow my own knowledge. Without the potential for personal development, there would be no real motivation for me to blog.

Okay… so what about financial modeling

I know there is an acute need for a clear, concise, straightforward how-to for financial modeling, and I haven’t given up on one day being that resource. However, I don’t think blog posts are the best format for teaching financial modeling. The modeling posts end up being too long, and the series of posts are incoherent. The benefit, however, is immediate feedback via comments.

In order to meet the demand for casual financial modeling, I have begun drafting a book on the topic. It is more detailed than the blog posts, and I hope to eventually have it peer reviewed. Realistically, I don’t know if I will ever complete the book, but it is a solid start. If anything I did not want my inability to opine about financial modeling to stop me from blogging altogether.

Conclusion

To sum up this overly-long, rambling post:

• Future posts will be shorter;
• Future posts will be more topical, rather than instructional;
• Financial modeling will no longer be covered here, but there may one day be a book.

As always, I do appreciate and value those of you that read The Strategy Blog. Don’t ever hesitate to reach out in comments the comments or email me directly.

• The aggregators of today will be the original reporters of tomorrow — it’s how disruption happens (Nieman Journalism Lab)
• Pinterest’s awesome signup process (Business Insider)
• BBVA Pursues Profits Among The Unbanked Using Nontraditional Data (Forbes)
• Launch and Experiment, Not a Startup (Vinicius Vacanti)

The top Google search queries that brought people to the site are:

Nothing too surprising in the top searches, but the award for the most unusual search query arriving at The Strategy Blog is a tie between:

While it is better known as a bar tool, “corkscrew” is a financial modeling term though one I have not discussed before. A “corkscrew,” in a financial model, is where the opening balance is equal to the previous period’s closing balance. Also, while I do not know, nor have I interviewed any professional singers, I did interview Thom Singer back in 2009 here.

Exit Interview: The creators of no-longer-with-us products explain what went wrong (37 Signals)

Role of Genes in Life-Long Intelligence Pinned Down a Bit (Scientific American)

Apple’s mind-bogglingly greedy and evil license agreement (ZD Net, via Clay Shirky)

Online privacy: Do we have a right to be forgotten? (TNW)

If enough people who have money in one of the Big Six banks (the four we mentioned earlier, plus Goldman Sachs and Morgan Stanley) move it into smaller, more local, more traditional community banks, then collectively we, the people, will have taken a big step toward re-rigging the financial system so it becomes again the productive, stable engine for growth it’s meant to be.

Martha White concludes “This is a great example of populist indignation made practical” and Yvette Kantrow feels that Huffington is “turning the decision on where to bank into a moral choice, like being green or buying organic.” She further adds “Banks make their money in a lot of ways, such as by collecting fees. For instance, banks are projected to collect $38.5 billion in overdraft fees this year, some 90 percent of which is paid by only 10 percent of the customer base.”

Mike Konczal shows us mathematically how a few poorer customers subsidize the costs of the non-revolving ‘prime’ customers in credit cards, and the same can generally be said for deposit and savings account as the “non-revolving ‘prime’ customers” also antidotal pay fewer overdraft fees.

Assume three things for a moment: (1) that you are a subsidized customer, (2) you feel the need to support a non-“Too Big to Fail” institution, and (3) like organic foods you are only willing to ‘pay’ 20% more (or receive 20% less) than the generic product. What is the moral, financially savvy customer to do? Is it wrong to continue to benefit from a system you believe is morally bankrupt?

If you are legitimately a subsidized customer paying less than fifty dollars in fees and interest, keeping low cash balances and paying your credit card in full every month, moving to a smaller institution may have a negative net benefit for that institution as the costs to service your account outweigh the benefit to the institution. But if you remain at a “Too Big to Fail” institution you are enabling a way of business that you don’t morally agree with.

I only see one strategy for dealing with this scenario; stop viewing it as a zero sum game. Here’s how:

1. Move your profitable (for the bank) accounts to the smaller institutions – generally your CDs, your term loans and your business accounts. Long term money such as CDs give the smaller institution money to make good loans to the local community. Term loans are typically profitable – it is the other side of the equation for how banks make money. Business accounts are also typically more profitable for the institution and you are more likely to be willing to pay fees for essential services on these accounts and not receive interest.
   • This also saves you the big hassle of “changing banks” for your most frequently used accounts, which is arguably the biggest hurdle
   • Also, don’t use brokered deposits (i.e. CDs you would buy through your stock broker) as they are unhealthy for the system and promote inorganic growth and/or bubbles.
2. Support legislation that levels the playing field between large and small institutions. Right now “Too Big To Fail” institutions enjoy a significantly lower cost of funds that smaller institutions, even adjusting for risk of failure, because of the implicit government guarantee. There isn’t any up for a vote now, and any movement for reform is quickly losing steam, but Megan McArdle and I agree how it should be done.

What is your view?

I initially encountered Thom through mutual connections on  Twitter and then ran into him several times at SXSW Interactive 2009. He is the only business development-type person I have ever encountered that seems to understand online social networks and uses them incredibly effectively. In preparation for the interview I read his book Some Assembly Required, and it really changed the way I look at networking.

The entire interview is worth a watch if you have half an hour, but if you don’t, be sure to catch Thom’s segment on Social Media Strategy (8:14) and The Art of Follow Up (16:40).

Without further adieu, here is an index of what the video includes:

• 0:16 Thom’s Introduction
• 0:36 Thom’s Inspirations
  • Harvey McKay: How to Swim with the Sharks without Being Eaten Alive
• 1:35 Thom’s Philosophy of Giving Back
  • This philosophy really permeates all areas of his advice and is worth listening to
  • “You can have anything you want in this world if you help other people get what they want” – Zig Ziglar
  • Ask people you meet what their biggest challenge is and try to help if you can
  • You don’t have to be rich to be a philanthropist
• 8:14 Thom’s Social Media Strategy
  • 9:38 LinkedIn
  • 10:33 Which is the best social network?
    • “If you just jump in and start splashing around you will drown, and not find anyone there to help y0u, but if you really have a philosophy of how to use it that matches up with how other people use it you are going to find a lot of opportunity”
  • 11:24 Thom’s Linking Philosophy for LinkedIn and Facebook
  • 13:46 How Thom Uses Twitter
• 16:40 The Art of Follow Up
  • Seek people out where there could be a mutually beneficial relationship
  • You don’t have to follow up with everyone in order to be a good networker. Only for people where you feel there might be the possibility of a real relationship, follow up
  • Hand written notes are not “old school”
  • Strategize your follow up differently for every single person you meet
• 19:43 Mentors and Peer Groups
  • Thom got a great value out of his peer group of ten years
• 21:36 Marketing Yourself
  • “If you are going to network and build a brand, it is about consistency”
• 22:57 Advice for Startups
  • Look for networking groups: ask you vendors, advisers, competitors
  • Don’t be afraid of networking where your competitors network
  • Go where the people are
  • If you don’t find what you are looking for, form your own group
  • If you provide value, people will come
• 24:58 Thom on Self Reliance
  • Believe in yourself and you will do well
  • Think about where your path will take you
  • All opportunities come from people
  • Networking is an important topic for strategy

How do you increase your networking velocity?

Disclaimer: This post contains affiliate links for the books mentioned. If you make a purchase through the affiliate links above, this blog receives a small commission. No compensation, monetary or otherwise, was received for mentioning the books above. No compensation was received for producing the video. Additionally, Thom Singer received no compensation for appearing in the video. The content of this post is absolutely authentic and was not influenced in any way by the availability of commissions! Video is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License. All rights reserved on other content.

Daniel, I think you may have missed the mark on JetBlue’s intention with the “All You Can Jet” program. It is a publicity stunt designed to fill excess capacity without cutting into holiday revenues, but far from something designed for business travelers. It has consumer virtually written all over it. As it is designed, it offers little value to business travelers, but a great incentive for consumers to try out a ‘new’ airline.

1) While Jet Blue has been around for ten years now, I suspect that most leisure travelers have not tried them. This is for a variety of reasons including: i) Jetblue’s limited coverage, ii) consumers’ unwillingness to try an airline they have not flown before given an equally priced traditional option, iii) lack of transferable frequent flier points.

2) The three day advance booking does prevent it from being a cost saving device for last minute business travel, which is entirely fair. While large corporates are accustomed to lower costs for last minute travel than consumers, this policy sidelines them (another hint it is designed with consumers, not business travelers in mind). Consumers, on the other hand, are accustomed to low pricing power and being stuck with either astronomical last minute fares or a 21-day advance booking, replete with an expensive change fee for any modifications. The ability to change plans up to three days before seems like a godsend.

3) It was announced on Twitter before all other forums of media. In that ecosystem, the “All You Can Jet” pass (see #AYCJ ) has carefully been coaxed into a life of its own by the Jet Blue PR team. They are presently running an informal contest to see who can book the most extensive itinerary.

If this were designed for business travelers, there would have been some frontrunning by their PR department to work with corporate travel departments. That is clearly not the case.

4) Jet Blue has always been a consumer airline. When I worked for a Fortune 100 company three years ago, JetBlue was not even a corporate travel option regardless of the fair. Assuming they are ‘in the system’ now, you would have to go through many challenges to get the purchase of this pass approved even if you were saving 3x the cost.

Looking at their marketing like http://www.jetblue.com/about/whyyoulllike/ you can clearly tell that they are consumer oriented, and it suits them.

5) Purchasing the “All You Can Jet” pass requires that you sign up for Jet Blue’s frequent flier program. This essentially gives the company permission to market to you after the conclusion of your itinerary. If it were oriented towards business travelers, it seems like the loyalty program would be oriented towards becoming the business’s preferred airline rather then focusing on the actual passenger.

==

If Jet Blue’s goal is, as I believe, to generate publicity and to get more people to try out the airline, I think it will be very successful. The amount of press that this has generated is truly impressive; it is hard to put a dollar value on that.

I’ve been a content Jet Blue passenger for several years flying the AUS -> JFK route a number of times, but this promotion honestly changed my perception of the airline. It motivated me to actually spend hours analyzing their flight schedules to find interesting destinations. Even if I hadn’t booked the pass, the promotion created value for Jet Blue. I now know that they fly to Bogotá, Colombia among many other exciting destinations on Jet Blue. Can you realistically put a price on marketing that good?

This post is specific to JetBlue’s flight schedule, but it is applicable to any airline pass where you have a fixed amount of time, but an unlimited number of segments. You would want to modify this strategy somewhat if you purchase an around the world plane ticket that allows a fixed number of segments of the period of a year. Your goal in both cases, however, is to maximize the number of places that you want to go to that would normally be very expensive.

Step 1: Figure Out What Your Options Are

I first downloaded the PDF of JetBlue’s electronic timetable (see this page for all of the formats). I read all the destinations and thought about which might be interesting to go to. It is okay if this list is pretty long. For me this list was:

How did I come up with these options? If I either didn’t know anything about the city, or if I knew of a landmark in the city it made the list. It is better to be inclusive rather than exclusive at this point.

Step 2: List the Potential Origins

With your list of exciting destinations (okay, so Nantucket probably isn’t too exciting) you now need to figure out what cities get you there. List all of the airports that have connecting flights to your destination. You will find the information in the timetable:

Add this to another column in your list:

Step 3: Create Segments

You will notice that many of these destinations go back to the same city. This is because airlines use a hub and spoke model. Hub and spoke makes this step easier to figure out, but it means more flight segments since you cannot fly from one destination to another without going back to the hub.

For JetBlue, it appears that the primary hubs (where most flights originate) for the destinations I am interested in are: New York (JFK), Orlando (MCO) and Long Beach (LGB). This means I have to come back to these cities before moving on to the next destination. Because of JetBlue’s one day rule for the pass (one flight per city per day), you want to minimize the moves between the hub cities, otherwise you would lose an extra day.

So, to create segments, group the cities that have potentially the same hub city:

… and the list goes on. It is also helpful to note if the flights are daily (most on JetBlue are).

Several places where I am able to take advantage of connections, without going back to the hub city are Washington, DC (IAD) to San Juan (SJU) [Saturdays only] and San Juan (SJU) to Santo Domingo (SDQ). Also, I can fit Las Vegas in by adding it on the way back from Long Beach (a hub) to New York (another hub)

Step 4: Combine your segments into a list

Now that you have your list of connections, you need to put them in a logical order where the hubs match up. For me this was:

We hoped to come back to Houston to visit family and friends in the middle of the month, which is why you notice that unusual excursion.

This is a perfectly valid itinerary that you could accomplish with the All You Can Jet pass. It would mean 23 consecutive days of travel, but you could do it.

Step 5: Decide what you really want

If your goal is to make it to as many cities as possible, by all means stop here and book. However we decided that we wanted to spend some real time in some of our more exotic destinations. I am working on a video project for TheStrategyBlog, conducting video interviews entrepreneurs and business owners around the world to gain strategy insights, and this would allow me more time for interviews.

If we spend three to four non-travel days in some destinations, we go way over the 30 days of the pass, so some destinations have to go (no pun intended). The strategy here is to eliminate destinations that you would be able to affordably visit without the pass and other destinations that don’t interest you as much.

With that in mind, I eliminated the entire west coast portion of the itinerary, plus the side trip back to Houston and also Burlington and San Juan.

This leaves:

Finally, considering the pace of the trip I decided that Bermuda would be a better fit to provide some R&R at the end of the trip, so I just reversed the itinerary.

Step 6: Pick Your Flights

For this step I moved from the PDF timetable to the desktop application. I did this because you can put in the date of your travel and it shows exactly what flights are available, rather than having to translate numbers on the timetable.

This step is technically not necessary, but your booking agent will thank you and you will be sure to get the more desirable flight times.

Step 7: Book It

Call 1-800-JETBLUE (538-2583), prompt 4 and book your itinerary! Right now! Don’t hesitate!!

The Definitive Book of Body Language
Allan and Barbara Pease

• There are many other body language books out there about “how to tell if someone is lying” or “how to appear more confident,” but I wanted a book that would teach me a broad spectrum of signals to analyze. In addition to teaching the signals I was looking for, the book has both illustrations and photos to illustrate their points.
• This follows my fascination with interpersonal communication. Over the past four years I have created a number of experiences that have improved upon my natural skills (or lack thereof), but I am curious about adding more of an analytical tool; this book did not disappoint.

The Craft of Intelligence
Allen Dulles

• Allen Dulles was Director of the CIA from 1953 to 1961, which was some of the most eventful years for the agency. In this book he discusses some of the history of the agency, but primarily focuses on how intelligence is collected, processed and used to formulate national policy.
• This follows my fascination with intelligence, espionage and foreign policy. You may also want to read Book of Honor to gain a personal perspective and Game as Old as Empire for a different perspective.

Within the Frame: The Journey of Photographic Vision
David duChemin

• Within the Frame comes at the recommendation of my friend Taylor Davidson, who among many other talents is a great photographer.
• Rather than focusing on the technical aspects, the book focuses on the inspirations behind truly inspiring photographs. duChemin does an incredibly good job of reigniting my lost inspiration.
• During college I spent four semesters studying photography and fell in love with the art. After college it fell off my radar

Emergency: This Book Will Save Your Life
Neil Strauss

• I’m not an extremist that believes we need to put all of our money in gold and hide it under out mattress, but that doesn’t keep me from enjoying reading about those that do hold such views.
• This is my purely-for-leisure reading, but it follows my curiosity related to offshore banking and tax policies worldwide.

Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life
Avinash Bixit and Barry Nalebuff

• Admittedly I have not started reading this one yet, but I am excited about starting it. It comes recommended by Presh Talwalkar on his blog Mind Your Decisions. He describes it as “[his] favorite book about game theory, suitable for beginners to experts.” I’m sold.
• Given the topic of this blog, I think it is apparent why I am reading this one. Game Theory is an important strategic tool that I just don’t have a solid basis in. I am looking forward to this book improving my understanding.

You should expect that at least some of the topics from these books will seep into my posts soon. Be sure to watch for it!

A fully functional financial model needs to be modular so you can later adapt it to more detailed schedules if necessary. For example, we will initially project revenue by making a percentage growth assumption, however in the future you can (or arguably should) make a detailed revenue schedule based on they key factors (macroeconomic, microeconomic or both) that drive revenue growth. Many of the To accomplish this, you need:

1. Consistency – Is the value in thousands, millions, or ..? What does this color mean?
2. Clarity – Where is this cell getting its data? What does this cell do?
3. Repetition – Only enter any assumption once, and then reference it from other parts of the model.

Color Conversions

• Blue – These are assumptions you enter
• Green – These are direct references to one or more sheets
• Black – These are calculations that occur on the active page or references within the active page

Turn Iterations ON – The circular model will not calculate if iterations are turned off

1. Press ALT, T, O (in sequence, not at the same time)
2. Click on the tab titled Formulas (in Excel 2007 and later only) or Calculation (in Excel 2003 and prior)
3. Check the box for Enable Iterative Calculations (Excel 2007 and later only) or Iteration (in Excel 2003 and prior)
4. Set the “Maximum Iterations” field to 100 and the “Minimum Change” to 0.001 (both of these are the default values)

Don’t hard code values into formulas – always reference the inputs you entered.

• 
  For example, in cell B3 (shown above) you reference the 8% growth rate in cell B1 rather than entering 8% directly into the formula
• This ensures that you model remains accurate when you update these values later

Adjust page formatting at the beginning of this process to ensure it is duplicated consistently.

• I recommend:
  • Page
    • Landscape orientation
    • Fit to 1 page by 1 page (for short projections) or 50% normal size for longer projections
      
  • Margins
    • Top Margin: 1 inch
    • Bottom Margin: 0.5”
    • Left and Right Margins: 0.5”
    • Center Horizontally on Page
      
  • Header/Footer
    • No Header
    • Footer containing the file path and name, time and date
      
    • Footer contents should be in 9 point font and not be scaled with page
      

Some final tips:

• Use “Center Across Selection” instead of “Merge Cells” when formatting
• Never “Hide” cells. If you don’t want them displayed, group them by pressing CTRL + Shift + Right Arrow, or Shift + F2)
• Make extensive use of Cell Comments (right click on cell and “Insert Comment”) to note where the input or formula came from. This prevents “What was I thinking syndrome” the day after.
• Utilize Custom Number Types for the type of number that will be in the cell. This format ensures that the numbers and percents will all line up nicely:
  • For numbers: #,##0.0_);(#,##0.0)
  • For percents: 0.0%_);(0.0%)
    
  • In Excel 2007 and later, you may want to define this as a custom style and also include the color, so you would have:
    • Input – Number
    • Input – Percent
    • Referenced – Number
    • Referenced – Percent
    • Calculated – Number
    • Calculated – Percent
      – Select New Style:
  • When you need to hide a calculation for presentation purposes, use the custom number format ;;;
    • Don’t forget to leave a comment, so you don’t accidentally delete the cell in the future
    • This is better than setting the font color to be white because, when printed, white colored fonts print as black

I cannot urge you enough to keep up with the above recommendations. The time it will save you in the long run is incalculable.

Next: The Core Statements [not yet completed] (or go back to the beginning)