Super, Sad, True Love Story

It’s 10˚F in Seoul and I’m freezing my balls off. Thank you Gary Shteyngart.

I read Shteyngart’s Super, Sad, True Love Story back in July when Seoul was an uncomfortably humid 85˚F. By the time I’d fully digested the book, it had become a pleasant Autumn. In the midst of Korea’s finest season and under the influence of Love Story‘s pessimistic vision for the US, I upgraded my short-term visit to a long-term relocation.

As we wait for my bits and pieces to thaw, allow me to reflect on that decision.

Love Story is the tale of overweight Russian-Jewish American protagonist Lenny Abramov and his tragic courtship of the much younger, more attractive, Korean-American, Eunice Kim, set against the backdrop of a dystopian Manhattan sometime in the near future.

My dad gave me the book based on the superficial similarity of my wife and I to the book’s main characters. The book’s accounts of Lenny and Eunice’s sex life makes it an extra-creepy present. Creepier still are the far closer similarities of Lenny/Eunice to Shteyngart and his real-life girlfriend. TMI. But I digress.

The character setup, however unsettling, got my attention but didn’t hold it for long. The characters are awful and impossible to sympathize with. Fortunately Love Story‘s characters are simply instruments with which to paint a horrifying portrait of the US in free fall and the lengths that people will go to survive as society around them crumbles. In this, the author succeeds brilliantly.

Written in 2006, Shteyngart is a sort of Nostradamus of the near future, picking up on trends and bringing them into cartoon-like focus.

Privacy, Scores. Lenny’s life is reduced to a set of scores based on his actions and the actions of those of his social network. Credit score, personality score, “fuckability”. Sound… familiar? These scores are overlayed on the real world through ubiquitous äpäräti, de rigeur digital pendants that hang around your neck. And if you don’t happen to have an äpärät, never fear: your scores are also displayed on “credit poles” that light up when you walk under them. Creepy, but for those who followed Facebook’s Open Graph announcement yesterday, this is where we’re heading.

National Debt, Division of Wealth, Camping on Wall Street. The US is fighting another war in Venezuela and finally buckling under its national debt. The rich are above it all. The government and armed forces are revealed as tools of the wealthy, while the riff-raff are sleeping in tents on the streets. China and Norway are divvying up Manhattan as the US becomes insolvent, and all hell is breaking loose.

And So On. Industry has been reduced to credit, media, and retail, and those sectors have morphed into gross caricatures of their current forms. The written language has decayed, taking a page from another classic, Idiocracy. Women wear onion-skin jeans. The rich fixate on life extension. The book contains many other predictions on top of all this, most of which are in some stage of realization today.

But despite Shteyngart’s uncanny ability to see where the puck is going, my move to Seoul had little to do with his predictions. I am hopeful that events like S&P’s US credit downgrade and movements like Occupy Wall Street are wake-up calls to the system, and that it bodes well for our ability to turn things around that these shocks are occurring while the economy is still holding together.

Of course my primary motivations for the move lie elsewhere, mostly around family and career. But every difficult decision needs an extra psychological push, and Love Story was mine. I stumbled through the story and was struck by a feeling of claustrophobia. The book’s characters are caught up in a bubble, and as the bubble collapses, the characters collapse with it. I couldn’t stop thinking about it for weeks and I slowly realized that back home I was operating in my own bubble, albeit a healthy one. From there, the pieces quickly fell into place. The best time to break free of a bubble is when everything’s rosy, and the easiest way to break free is a change of environment. Thus my move to Seoul is about shaking things up, stepping out of my comfort zone, building bridges, creating options, and opening my eyes to another way of living.

To wrap up my review, I invoke the old Remington electric shaver commercials with the slogan “I liked it so much, I bought the company.” Super Sad True Love Story: I was so disturbed by it, I moved to Seoul. I only wish I’d brought warmer clothes.

A Tale of Two Attitudes

I have been eagerly watching the Occupy Wall Street movement from Seoul. At this distance, I am insulated from the action and much of the media coverage, yet I am dismayed and disgusted by the conservative response to the protestors and events. Specifically, the message that if you don’t know exactly what you’re asking for, then you should shut up and go home. This is a message of complacence and denial, and the wrong way to think about what’s going on. It reminds me of the attitude I saw at Microsoft in 2006, back when Microsoft was still the undisputed top dog of technology. I contrast this with the attitude of personal accountability that Steve Jobs took when he returned as Apple CEO in 1997, beginning the turnaround that would lead Apple from the brink of destruction to the most valuable company on the planet.

Microsoft: Complacence and Denial

In 2006, Microsoft was at a crucial point in its history. It was the most profitable technology company on the planet, with its two cash cows, Windows and Office, enjoying a monopoly firm grip on their respective markets. Yet the company was in danger, with minor competitive threats coming from every direction – Apple OS X, Linux, Google Apps, etc. Moreover, in addition to these external threats, Microsoft’s own worst enemy was itself. The company was filled with politics, infighting, and bureaucracy. The successful products were stagnating, with minimal improvements rolling out at long, multi-year intervals. New projects were under-delivering. The writing was on the wall: if things continued this way, the company would eventually get knocked off its perch.

At the time I was a research scientist at Microsoft and happened to attend a talk given by a brand/PR consultant, apparently fishing for work. The talk began with a simple experiment, which was to query Google for the phrases “love Microsoft”, “hate Microsoft”, “love Apple”, and “hate Apple”. Hardly scientific, but the results at the time indicated a striking difference between the two companies, with lots of love for Apple and lots of hate for Microsoft. The message of the talk was roughly:

You have a monopoly but your users hate you. As soon as there is a credible alternative to the monopoly, users will abandon you in droves. You need to fix your products, but there are also lots of low-hanging fruit to simply make your users like you more, independent of your products.  (So hire me to help you figure it out.)

The talk contained a lot of unproven assumptions, but it more or less matched my gut feelings about the state of the company and its market at that time.

More interesting than the talk, however, was the reaction to the talk. There were about 100 people in the room, and my sense was that the many of us were stunned, thinking “wow, that made a lot of sense”, but not really knowing what to do about it.

Most of the audience responses, however, were attacks at the speaker. Some of the attacks involved the validity of the claims – contesting the idea that a Google search was a useful proxy for anything. Many of the attacks were of a “haters gonna hate” variety – that people only hate Microsoft because of its incredible success, and despite that hate, Microsoft was still and would continue to be the best software company on earth. Both of these responses were forms of complacence and denial: “there’s nothing wrong with the status quo, and time will prove us right.”

Apple: Personal Accountability

After hitting an all-time low in the mid-1990’s, Apple began to turn around with the return of Steve Jobs. Here’s a quote from Jobs at the 1997 MacWorld Expo, after receiving a $150M lifeline from archi-rival Microsoft (full video at the end of this post):

If we want to move forward and see Apple healthy and prospering again, we have to let go of a few things here. We have to let go of this notion that for Apple to win, Microsoft has to lose. We have to embrace a notion that for Apple to win, Apple has to do a really good job. And if others are going to help us that’s great, because we need all the help we can get, and if we screw up and we don’t do a good job, it’s not somebody else’s fault, it’s our fault. So I think that is a very important perspective. If we want Microsoft Office on the Mac, we better treat the company that puts it out with a little bit of gratitude; we like their software.

So, the era of setting this up as a competition between Apple and Microsoft is over as far as I’m concerned. This is about getting Apple healthy, this is about Apple being able to make incredibly great contributions to the industry and to get healthy and prosper again.

After the history of bitter rivalry between the two companies, this must have been a tremendously difficult speech to give, and an even more difficult realization to have come to in the first place. Even after the speech was over, in the video you can see audience members shaking their heads.

But difficult or not, it was a pivotal moment for the company and one which led to a renaissance of innovation and impact that has changed the industry and the world. The following twelve years of growth were the product of massive numbers of people, and countless acts of hard work brilliance, at all levels of strategy and execution. But I believe they all came from this basic attitude of personal accountability and a quest for excellence.

Occupy Wall Street

Like the personal computing industry, the globalized world is more dynamic and ultra-competitive than ever. Like Microsoft in 2006, the USA is still the world’s dominant superpower. Over the past century, we have built up an economic and infrastructural lead over the rest of the world. Recently, the USA is squandering that lead and failing its people. If there’s ever a time to question what’s going on in our country, it’s now.

Yesterday, while I was writing this, Occupy Wall Street issued its first official declaration. It is a series of grievances about corporate forces that “place profit over people, self-interest over justice, and oppression over equality, [and] run our governments.” Each grievance is of the form “They have X” where X ranges from illegal foreclosure to privacy violation to animal torture and cruelty. It’s all over the place. I don’t agree with every statement, and I don’t believe in the use of “they”. I think that these are problems that “we” all have to address. But I think these are the right questions to be asking.

To paraphrase Steve Jobs (deceased between the time I started writing this and its completion, may he rest in peace.):

This is about getting America healthy, this is about America being able to make incredibly great contributions to the world and to get healthy and prosper again.

We should accept that there are huge problems that need to be addressed now, while, in some respects we’re still on top, rather than waiting until we hit rock bottom. Some of the people occupying Wall Street may already be at rock bottom, or feel like it. Some of them may simply be angry, or crazy, or there for a good time. But they are raising great questions.

Furthermore, in addition to questioning what’s going on, we should take a personally accountable attitude about how to address those questions. Again, paraphrasing:

We have to embrace a notion that for America to win, America has to do a really good job.

If our people are sick, oppressed, under-educated, and disenfranchised, it is a problem for all of us. And it is the responsibility of the government, the industry, the protesters, and the rest of us to do what we can to do a really good job and fix it.

Jobs’ full 1997 MacWorld speech:

 

 

 

Book Review: Boomerang

Saturday Morning Breakfast Cereal is one of my favorite comics these days, and aside from giving me a chuckle, today’s post also struck a deeper chord, reminding me of the philosophical truism: “the more you know, the less you understand.” It was the perfect cartoon to run across on the day that I read Michael Lewis’ Boomerang: Travels in the New Third World, the best of a handful of fantastic books I’ve read over the past few months.

My first “the more you know” experience was in 2003. Back in high school I was a chemistry whiz. Twelve years later, as I was finishing my Computer Science PhD dissertation and volunteering at a Seattle community college, a student asked for chemistry help understanding electron configuration.  As I helped the student, I realized that I had no idea what orbitals and spins actually were, how anybody had ever discovered them, or whether there were any alternative explanations. By attempting to create and document new knowledge myself as the product of my PhD research, my perspective on existing knowledge had changed without my realizing it.  Things that I’d once taken for granted, and which helped me breeze through the AP exam, were more mysterious than I’d ever considered. It was as if I’d just learned the truth about the Matrix, but was simultaneously baffled by all the little green characters flying everywhere I looked.

Reading Boomerang was a similar experience, eye-opening yet utterly mystifying. Each chapter in the book describes a country in the throes of financial crisis: Iceland, Greece, Ireland, Germany, and the USA, in that order.

In the first four chapters, Lewis comically describes the economic insanity perpetrated in these four European countries and how this insanity is tied to some massive cultural delusion. It was surprisingly easy to chuckle and shake my head at these silly Europeans, playing with fire and getting burned in ridiculous ways.

Then, in the final chapter, he sets his sights back in on the US, and the narrative changes. Lewis begins with the observations of banking analyst Meredith Whitney, which amount to a literal hierarchical passing of the buck. As much as possible, the US federal government will pass its financial burdens down to the states, and the states will in turn pass their burdens down to the municipalities.1 The state in the deepest trouble? California. The city? Vallejo, in my own back yard. Sound familiar? Yes, I’ve touched on that before. In a masterful zoom from macro to micro, Boomerang literally hit home for me and confirmed some of my deepest fears, but from a top-down perspective.

The storytelling, facts, figures, and opinions are spectacular and have to be read to be appreciated, but ultimately they are really just a vehicle for the Lewis’ message, which is about a culture of greed and its consequences. Culture can be made funny and interesting and at one level “easy” to understand. But as I read Boomerang, I couldn’t help but fixate on the other part of the message, which was the raw mechanics of debt.

Like the electrons that somehow bond together atoms, debt is the substrate that holds together the extremely complex web of modern finance. Between countries, corporations, states, cities, and individuals (what’s the difference anymore?), there are pools of sticky, gooey debt, stretched thin and piled high in all kinds of arrangements between all kinds of parties. It’s invisible and yet everywhere we look, like another form of matter. Like the Matrix. It’s what makes the world go round, and it’s what might cause it to implode.

And like the electrons, debt has its own conservation laws. One man’s gain is another man’s loss. But enough men’s gains and losses, when put together, can be society’s loss, in the form of bubbles and busts and “too big to fail” bailouts and intricate chain reactions that have to be meticulously deconstructed, after the fact, like Lewis has done in Boomerang. These conservation laws made me think about flipping a startup in a whole new light, and generally about value and different forms of sustainability. Sustainability is something I’ve been thinking a lot about anyway, as I take the year off to travel around the world, but Boomerang raised the question up a level or five. Before I questioned the personal ethics of a leisure life. Now I question the global ethics of it.

If you want to begin to understand the global financial crisis, Boomerang is a great place to start. But if you’ve never thought much about economic theory, be prepared to have your mind blown. Are you ready to take the red pill?

  1. Lending more support to Engin’s thoughts about cities as the new countries, and in fact Lewis even mentions this idea explicitly, but that’s a subject for another post. []

Going with my Gut

In 2006 I made a flippant prediction of the 2008 financial crisis. I got the details all wrong, but the root cause and the end results were mostly correct. This time, with a similar rumbling in my gut, I’m making another prediction of financial doom, and considering how to react to this feeling.

Fool Me Once

On a 2006 visit to the US, my father-in-law commented that people in the US seemed to live much more comfortably than their Korean counterparts. I explained to him that a lot of this comfort was made possible by unsustainable personal debt, and the modern American lifestyle was a house of cards that would collapse and lead to economic catastrophe. (Fun fact: 800B of debt is carried by over 50M households – an average of nearly $17K per household!) It was a flippant prediction: I didn’t think it through, didn’t back it up with numbers, and didn’t follow through. Nevertheless, two years later it all came to pass in the form of the Subprime Mortgage Crisis.

It’d be wrong to say I called it, and I’m making no such claim. I had no idea it would be housing debt that would ultimately break the bank. I also had no sense of the timing – even if I’d been bold enough to place a bet on my statement, I doubt I could have made much money. I didn’t know that the financial back-end was acting as irresponsibly as the consumers borrowing into it. But my gut was correct: that something was horribly rotten in the area of household debt, and that in the end it would result in a systemic failure above and beyond personal bankruptcies. In some very abstract sense, I did call it.

Won’t Be Fooled Again

These days, much more than ever before, I can’t shake the feelings of impending economic doom. My observations from 2006 still stand, and if anything the situation is a lot more dire than it was back then. In addition to a population living well above its means, with an average consumer debt of $7800 and national debt of $47,500 for every man, woman, and child in the US, now we have a hamstrung government that is not even sure whether or not it wants to pay its federal debts, let alone what we should do to solve the problem. At this rate, will we even be able to orchestrate a bailout the next time we have a massive breakdown?

I predict that over the next 10 years, the US economy will see a series of corrections, as the market adjusts to match the reality of a rotten system, and consumer and federal spending/debts adjust to bring themselves closer to their means. Because of tremendous social/political inertia, I predict these adjustments will be largely reactive and forced, rather than proactive and voluntary. In short, I believe we are in for an extremely bumpy decade, and that’s if we’re lucky. If we’re unlucky, it’ll all come crashing down at once, there will be massive tectonic shift in the global political and economic landscape.

Just like in 2006, I have no idea how this will all play out. But this time around, rather than simply making a flippant prediction, I’m trusting my gut and am beginning to take action.

Emergency Preparedness

In 1999, I laughed at the paranoids wringing their hands about the Y2K problem and stockpiling food, water, and weapons for the impending global collapse. Twelve years later, I’m that guy. Here’s my checklist.

Investments. Without going into details, I continue to bias my investments internationally. As a US citizen and resident, I am implicitly so heavily invested in the US that regardless of my outlook on the economy I should invest internationally as a hedge. In light of my views, I will increase and target my investing bias over the coming years.

Career. My career perspective is that in times of uncertainty, one should focus on getting the basics right. My mental model of industry mirrors Maslow’s hierarchy of needs, with soft skills at the top of the pyramid, and tangible contributions forming the base. This hierarchy exists at both the industrial and the individual career level. In industry, intangibles like media and advertising form the top of the pyramid while necessities like farming and construction are at the bottom. For the individual, it’s politics and communication up top, product design and development down below. I’m dismayed because everywhere I look I see a race upwards. Companies like HP, the largest PC business in the world, considering dumping their hardware business to focus on enterprise software. At the career level I see people all around me, particularly those working in large companies, sprinting into abstraction as fast as they can. Having invested the last 20 years in Computer Software, I can’t easily change my industry and will remain in the upper-middle of the pyramid. But from a career standpoint, I continue to bet heavily on grounded skills concerning the design and production of software, since I believe these will always be truly valuable even if the “margin” may be slowly eroded through globalization.

Residence. My biggest contingency concerns my physical residence. I spent the first half of 2011 traveling around South America and Southeast Asia. The primary purpose of this trip was honeymoon and relaxation, but a secondary concern was to build a better understanding of the developing economies of the world. On each stop along the way, my wife and I tried to understand the economy and quality of life in each country. Our final stop ended up being Seoul, my wife’s hometown. Under different circumstances I would not consider living in Seoul, due to language and culture barriers. By the end of this trip I will have been here for four months, and I may come back again next year to stay for a longer period. I believe Korea an ultra-industrious, ultra-dynamic country with its feet firmly on the ground, and that as an American I can learn a lot from the way of life here. I’ll be posting those findings here as I find them (e.g. on healthcare, local business). I firmly believe that families with a footing in two or more countries will have a much easier time navigating the upcoming economic and social challenges in the coming decades. I still have many reservations about moving here for the long term, but I want to keep that option open and be prepared with a solid network and the basic skills to live here comfortably and happily.

Activism. This is the fuzziest item on my list. With a problem as big as the one I am observing, it’s really unclear how an individual can contribute, but I’m slowly working out my plan as it relates to US competitiveness and sustainability. This blog is my first step: a mental sandbox as I start to try to understand what’s going on. In parallel, I am working on creating a business in the personal finance domain targeting the US market. I believe that responsible consumer investment is a powerful lever to address some of the major concerns. And finally, I hope to increasingly contribute to causes in line with my belief system.

Sound Off

I am increasingly pessimistic about the US economy, and while I lack any detailed proof or substantiation, I have tried to articulate the basis for my sincere concern. At the 10,000 foot level, I’ve also outlined what I plan to do about it.

Do you agree with my prognosis? If not, why not? If so, what do you think about my response? What are you doing about it? Do you know any meaningful efforts towards creating sustainable lifestyles and economic competitiveness? Please add your thoughts in the comments.

Image courtesy of Esther Gibbons on Flickr under Creative Commons license.

DuoDerm and the Korean Medical System

DuoDerm is a Hydrocolloid Dressing, a high-tech bandage straight out of a sci-fi novel. It’s an adhesive film that can be taped over a wound, does not need any other ointment, can be worn in the shower, and can last for days before it needs to be replaced. It uses the fluids from the wound to help hydrate and heal the skin. Really amazing stuff, but you’ve probably never heard of it. The technology was developed in the USA, but it took an injury in Korea for me to find out about it.

I discovered DuoDerm in Seoul. Over the past couple weeks, due to the summer heat and wearing sandals every day, the skin of my feet have dried out and I’ve been getting painful fissures on my heels. Being accustomed to a functional medical system, my wife and mother-in-law insisted that I go to see a dermatologist. A 5 minute walk to a clinic, a 10 minute wait, 60 minutes of treatment, and only $50 (without insurance!) later, I had a solid diagnosis, a few weeks of prescription anti-fungal lotion, some specialized moisturizer, and a DuoDerm-bandaged foot. It was fantastic – my feet are living in the future.

But this isn’t a story about how great DuoDerm or the Korean medical system are. Rather it’s a lamentation of the US system, which seems broken on many levels.

Preconceptions. As an American, I have been trained that seeing a doctor is an expensive and time-consuming process, let alone seeing a medical specialist like a dermatologist. Let alone seeing a specialist when I don’t have any medical coverage. I wouldn’t have even considered going were it not for my in-laws insisting upon it.

Human capital. In the US, doctors time-slice patients, spending the minimum amount of time with each patient. The same is true in Korea. However, in Korea, you pay a ridiculously small amount for that sliver of time. The government is committed to providing healthcare for everybody, and they make sure that it is affordable even for those lacking insurance.

Technology. DuoDerm was developed by ConvaTec, a US company, over 20 years ago, but I bet most Americans haven’t heard of it. The one Korean I mentioned it to said she uses it regularly. There also seems to be an enthusiasm to stay on the cutting edge here, which is wonderful. Prescription drugs and other medical treatments are also much cheaper in Korea, presumably due to government policy, and as a consequence people are able to actually benefit from technological innovations. 

So fine, I fixed my foot. It probably would have healed in a few more days anyway. Big deal, right? Once you have a strong, functional, and convenient medial system, a lot of other possibilities open up.

Preventative medicine. Chief among these possibilities is preventative medicine. Korean companies pay for their employees to take comprehensive health exams every year. With these exams, they can catch diseases at their early stages when they are easy to treat. This is particularly important for cancer, which can often be easily treated if it’s caught in the early phases. As a consequence, Korea is making great headway at fighting cancer nationally.

Medical tourism. It also enables a blossoming medical tourism industry. Korea’s top-class medical care and low prices are bringing in patients from all over the world for everything from complex treatments to cosmetic surgery. While Korea is a latecomer to the business, like everything it does, it’s going all out with “Medi-tourism” signs in the airports, and other an international marketing campaign.

Exports. Korea has even started exporting its medical systems and management skills to the Middle East, potentially opening up yet another market for their considerable expertise.

I sincerely hope that the US can learn from Korea, especially when it comes to healthcare. The longer I spend here, the more clear it becomes that we are living in the past, while the rest of the world shoots by, both by investing in its citizens and continually pushing the envelope on technology, practices, and business models.

Image courtesy of David Arnall, Ph.D.

Sixth Sense: Ghosts on Main Street

For the past seven months my wife Keywon and I been traveling around the world and it has been a veritable smörgåsbord of sites, tastes, and experiences. However, the most profound experience of a long trip like this is the shock of returning home and discovering that something fundamental has changed inside. Last week I returned from Seoul to the US for a friend’s wedding, and while I was only home for a few days, I am still reeling from the shock. When I left for the trip, I regarded my hometown of Berkeley as a pinacle of civilization. When I returned, it was as if I’d developed some kind of sixth sense, and instead saw it as a sad ghost town. After getting over the initial trauma of seeing my stomping ground in this diminished light, I began to realize that understanding what made Seoul so dynamic might also lead to constructive solutions for the US.

Home Sweet Home

From before I was born until the present, Berkeley has been a truly remarkable place in the world. Berkeley really pushes the envelope despite it’s small size. In the mid-1960’s it was the birthplace of the Free Speech Movement and one of the focal points for the tremendous cultural shifts that happened across the country during that decade. UC Berkeley is one of the best educational institutions anywhere, attracting top talent from every corner of the globe, and advancing human understanding in nearly every academic discipline. Its residents are also extraordinary, including notable authors, musicians, chefs, and so on. Berkeley tries to embrace and celebrate diversity — ethnic, cultural, sexual, religious, and otherwise. Its politics is about as progressive as they come, and to me, that’s by and large a great thing. All in all, even today, with only 110,000 residents, it’s per-capita impact on the world is phenomenal.

In addition to these more objective measures, Berkeley is my home and was a wonderful place to grow up as a kid and get educated as a young adult. I’ve lived 29 of my 37 years in the East Bay, and 5 more just across the Bay in San Francisco. From a personal perspective, I will always be fiercely proud of my home sweet home.

Paradise Lost

My hometown pride took a kick in the gut when I came back from my travels. It was like stepping out of a time machine.

My first impressionistic experience was a personal one. My parents’ home hasn’t changed in years. The trappings of 40 years of modest middle-class living has accumulated in piles in various rooms around the house. Two of my parents’ five bedrooms are used primarily for storing junk. There is a layer of dust over everything. While my parents are at least a standard deviation out on the messiness curve, the proliferation of storage lockers tells me that this amount of “stuff” is not so abnormal, with 1 in 10 US households renting a storage locker. Meanwhile the rest of the world is just starting to have the prosperity to enable families to have this kind of accumulation. I think it’s significant that the US has been enjoying this kind of abundance for years.

My next experience was about the state of commerce in Berkeley. For months I’d been craving a good American breakfast, so my first stop was the Westside Bakery Cafe. At first, I was delighted to be eating extraordinarily tasty french toast on Sunday morning, in a spacious dining room with only a handful of fellow diners scattered around the room. With a huge smile on my face, I commented to Keywon how it was such a nice and refreshing change from Seoul, which by comparison is crowded and expensive. She replied that something must be horribly wrong for the restaurant to have so few patrons during what should be the Sunday brunch rush hour. As usual, she was completely right. I left the restaurant shaken.

Businesses on Telegraph, Shattuck, and Solano, three of Berkeley’s traditional shopping streets, have been hit hard over the past five years, and the more time I spent there, the more of these impressionistic moments I had. From a sedate lunch at an almost empty Zachary’s Pizza, a local favorite that was always busy in its heyday, to a listless stroll through the heart of Berkeley’s Gourmet Ghetto. I’d heard this repeatedly from my mom as her employer, Sue Johnson Lamps & Shades, has struggled to stay afloat during tough times, but it was another thing to experience it first hand, particularly in comparison to Seoul, where a tiny side street can have as much foot traffic as some of the busier parts of Manhattan.

Argh

The worst part is that I don’t understand what’s going on, neither from the supply nor the demand side. From the supply side, i.e. the producers of goods and services, there seems to be a lethargy and unwillingness to adapt to the change of environment. From the demand side, i.e. consumers, there seems to continue to be an abundance of wealth in the area, but a lack of spending.

Suppliers seem to blame their situation on a combination of the diminished economy along with the the Amazons and Walmarts of the world. In my view that’s only a small part of the problem, and it has much more to do with stagnation in the midst of a rapidly evolving global market. A few days before our trip, my wife took her skirt to an East Bay seamstress for a hem. They told her no problem, but asked if she could pick it up in a couple weeks. In Seoul, by contrast, any corner cleaners can do a hem that afternoon, and 10 minutes by subway gets you can access some of the best and speediest tailors in the world.1 After laughing when my wife asked if they could do it that day, she left the shop in frustration.

Looking for Answers

In addition to making things cheaper and faster, local businesses can learn a lot from Korea in terms of service innovation. Koreans will try anything to differentiate and serve an untapped market.

Like an ice cream truck for neat freaks, this shop on wheels cruises around Seoul, selling brooms, toilet plungers, and other household supplies, broadcasting its wares by loudspeaker.

The other night I was walking through the Hongdae neighborhood of Seoul, a trendy university district with lots of bars & shops. Rolling down one of the alleyways was a truck, packed to the ceiling with toilet brushes, cleaning supplies, and other household items, hawking its wares over a loudspeaker, sort of like an ice cream truck for urban residents in need. A block later I saw a similar truck selling stuffed Angry Birds, rubber chickens, and other novelty items. I have no idea whether these trucks make good money, but you can’t fault them for not trying.

Inside a beautiful Catholic church-cum-wedding hall for a friend's wedding. An international buffet is included downstairs, and is standard fare for a Korean wedding.

A very different approach is the wedding hall industry in Korea. All over the city, wedding halls put together configurable wedding experiences at the push of a button. They may lack the individuality of a US wedding with separately coordinated venue, catering, rentals, invitations, and personal wedding planner (running a pricey $30K on average and taking months to put together), but they are infinitely more convenient with a wide range of styles and price points.

Taking the push-button wedding hall concept in a different direction, an extreme and slightly morbid example of this innovation is that some large Korean hospitals provide chapels, funeral services, and even suit rentals on-site.

Sometimes their approaches seem wild to the point of random, or seem to be crude, but the end result is a hotbed of service innovation. While the US still seems to have the edge in technology and brand marketing, I think that US local businesses can learn a lot from their Korean counterparts.

Food for Thought

After the US Debt Ceiling Crisis, there has been a lot of doom and gloom about the inevitable “fall of the US empire“. People blame the government, the military, the banks and Wall Street, and the rich and poor alike. There is more than enough blame to go around, and in my opinion the bulk of it does fall on the major strategic blunders of the the past decade ranging from tax policy to unnecessary wars to greedy and grossly irresponsible investing practices.

That said, it wasn’t until my recent trip back to the US that I realized how crazy things are on “Main Street”, and I don’t think most Americans even realize how bad it is, let alone how much we can improve if we push the status quo. To remain competitive as a country we will need to fix every aspect of our economy and social infrastructure. Observing the energy, competitiveness, and innovation of the Korean marketplace not only highlights the stagnation of US local businesses, but also points towards possible solutions.

Ghost town image courtesy of Pascal Bovet at Flickr under Creative Commons license.

  1. In Seoul, it’s the other extreme where I don’t understand how cheap this stuff can be, given the high cost of living here, but that’s another post. []

Patriotic Millionaires

The Patriotic Millionaires are a group of individuals making over $1M a year who are petitioning to increase taxes for wealthy Americans. The back and forth between this group and Sen. Orrin Hatch, the ranking member of the Senate Finance Committee is facepalm-inducing.

From the Millionaires’ web site:

Our country has been good to us. It provided a foundation through which we could succeed. Now, we want to do our part to keep that foundation strong so that others can succeed as we have.

Hatch’s response:

All those rich, liberal democrats who are eager to pay higher taxes can do just that. They can write a check to the IRS and make an extra payment on their tax return to pay down the federal debt. The option is right there at the bottom of their tax return.

What an asshat. This is the kind of thing that makes me want to pull out whatever hair I have left. If this keeps up we’re simply going to get run over as a country.

I appreciated John Stewart’s take on the same issue:

Image courtesy of random letters on Flickr under Creative Commons license.

Strong Medicine

As a gut reaction, it’s encouraging that the media is starting to scream about the shameful state of US politics and economy today.1 Unfortunately, the country’s bottom line is just the tip of the iceberg. It’s going to a long-term overhaul to get us to where we need to be.

Also, while “burning the place to the ground” is a fair characterization of the republican role in the debt crisis, I think this guy’s use of the phrase is glib and lets them off way too easy. What kind of person wants to destroy there own country, and how do these people manage to get elected? Completely insane.

  1. As a historical illiterate, there’s a lot I need to track down to make full sense of this video. []