Episode #185: Free-Rider Friday - March 2018

Ed’s Topics

Tweet from Keith

Alchemy Financial (@WeLivetoServe), asking us to discuss Bitcoin. You have to report your sales of Bitcoin on your tax returns, but how do you deal with the “forks”—are they dividends, etc.?


Also, the HyperLedger, hyperledger.org, a project being run by the Linux Foundation, a who’s who of leading companies.

Ron brought up “The crypto sun sets in the East,” from The Economist, Jan 20, 2018. While Japan has embraced bitcoin, China has banned it, and South Korea is in the middle.

Though South Korea is less than 2% of global GDP, it has nearly 15% of Bitcoin-trading, yet South Koreans pay a 40% premium for bitcoins, due to capital controls.

Bitcoin is supposed to be freedom from government, yet in Asia, it is governments that are making or breaking their fortunes.

Amazon and Berkshire Hathaway Innovating Healthcare

Two articles: Capx.co article by Tim Warsaw on Amazon teaming up with Amazon and Berkshire Hathaway on healthcare.

HealthcareIT news: 5 different areas where Amazon could disrupt healthcare:

  1. Durable medical equipment and supplies
  2. Mail order and retail pharmacy
  3. Pharmacy benefit management
  4. Telemedicine and in-home healthcare using Echo and Alexa
  5. AI-powered diagnostics for continuing care

Facebook Knows Your Politics

Shout-out to listener Hector Garcia.

Go to your Facebook settings > Ads > Your Information > Your Categories > US politics.

Five categories: Very Liberal, Liberal, Moderate, Very Conservative, and Conservative.  You can delete them if you want.

Stephen Hawking, R.I.P.

Barry Brownstein on Stephen Hawking's Final Warning: Why His Worries Were Unwarranted

Steel and Aluminum Tariffs

In response to the charge that the Chinese government was subsidizing its steel producers an economist said, "Number one, it’s very dubious that it’s true, but suppose it were true. Then that would be a foolish thing for the Chinese to do from their own point of view, but why should we object to them giving us foreign aid? We’ve given them quite a bit."

Actually it is Milton Friedman and it was about the Japanese government forty years ago. Why won't this myth die!

Robin Corner, FEE, Toxic Masculinity article

Autonomous Vehicle Update

Regulators Are Asleep at the Wheel on Self-Driving Cars,” Bloomberg, March 26, 2018, Brad Stone

Tragic death of a pedestrian, cutting in front of a car, she was at fault. Will this slow down progress?

Driverless cars given green light to operate in California,” Financial Times, February 27, 2018

On Monday, Feb 26, 2018 California’s Department of Motor Vehicles green light to manufacturers and tech companies to test and deploy autonomous vehicles without a “natural person” inside the car. Also, no steering wheel or pedals required. The car must have a “remote operator.” Arizona, Michigan, Nevada also allow this type of testing. Safety campaigners say this could turn California’s roads into a potentially lethal video game. What are they now?

50 companies are testing in CA, including Alphabet, Uber, Apple, GM, Ford, Toyota. DMV could start issuing permits for locals to take rides by April 2nd. “Disengagement reports” must be submitted every year: measuring how many times a human had to step in, and each car must have a “black box.” Waymo’s score on Disengagement: once every 5,596 miles, and General Motors: once every 1,254 miles.

Ron’s Topics

“Firm direction,” The Economist, March 3, 2018


McKinsey has been compared the US Marines, the Jesuits and the Freemasons. It consults with 90 of the Forbes top 100 firms, even helping Britain leave the EU, and the Saudis wean themselves off oil.

Kevin Sneader, Scottish Chairman replaces Dominic Barton as managing partner (2,000 partners).

Half of what it does today are capabilities that did not exist 5 years ago (it would be interesting to know how much revenue is earned from those capabilites?)

It is recruiting more data scientists and software developers, but staying relevant with technology firms is proving difficult. Unicorns, Facebook, Google, and Amazon don’t use McKinsey’s services, somewhat because McKinsey helps cut costs, and that’s not an issue in these companies.

Also, these companies compete with McKinsey in recruiting talent.

The former managing partner, Dominic Barton, also oversaw the shift towards a results-based fee model, in line with Boston Consulting Group, Bain and [Accenture].

Russia Ruins Aviation Record

Saratov (SA-RA-TIV) Airlines flight 6W703 crashed soon after takeoff, killing all 71 on board. It’s the first fatal crash since November 2016. There were no deaths in 2017.

I still can’t afford to move to Texas, Ed


So Many People Are Fleeing the San Francisco Bay Area, It’s Hard to Find a U-Haul,” FEE, Mark J. Perry, February 14, 2018. The San Francisco Bay Area is #1 for out-migration: Sacramento, Austin, Portland, OR. Reason: high cost of housing (even high skilled). A San Jose U-Haul operator’s biggest problem: getting his vans back! Nationwide, cities with biggest inflows, according to Redfin: Phoenix, Las Vegas, Atlanta, and Nashville.

Cost of Renting a U-Haul from San Jose to Las Vegas is $1,990 Las Vegas to San Jose $121.

AI vs. Lawyers,” LawGeex

Another shout-out to listener Hector Garcia. AI achieves 94% accuracy rate identifying and highlighting 30 proposed legal issues in five standard non-disclosure agreements. Human lawyers averaged 85% accuracy. It took the humans anywhere from 51 minutes to more than 2.5 hours to complete all five NDAs, while the AI engine finished in 26 seconds.

Ethical Question: does the Algorithm round up and charge the full hour?

“A tale of two Washingtons,” The Economist, March 10, 2018

Amazon’s second headquarters got bid from 240 cities/regions. It’s culled down the list to 20, including Toronto. Amazon says it will employ 50,000, and invest $5 billion over 15 years.

Three out of the 20 finalists are in the Washington, DC area: the city itself, northern Virginia, and Montgomery County, Maryland. Jeff Bezos already owns a home in D.C., and the Washington Post.


Amazon Web Services (AWS) already has a home in Herndon, VA, 10 minutes from Washington Dulles airport (second in Amazon employees). AWS has prominent government clients, including the CIA, and the government spend approximately 5% of the $1.6 trillion spent on technology each year.

Regulatory threat has increased as Amazon moves into financial, home security, logistics, healthcare, etc. It has already beefed up its lobbying, and having 50,000 employees and their children attending the same country clubs and schools as government officials is a shrewd strategy.

Also, having two headquarters makes a split from AWS and Amazon Retail much easier, if the company is ever divided due to antitrust laws.

We Need Bullies: Chris Rock Speaks Truth to Weakness in Tamborine,” National Review, February 15, 2018, Kyle Smith

Who said it?: G.K. Chesterton, John Wayne, Jordan Peterson?

“We need bullies. Pressure makes diamonds. Not hugs. Hug a piece of coal and see what you get. You get a dirty shirt.”

“That’s why there’s so many fat kids in school right now—because there’s nobody to take their lunch money.”

Chris Rock, on his new Netflix special Tamborine.

Hollywood’s New Matinee Idol: Karl Marx,” Kyle Smith, National Review, February 22, 2018

Haitian filmmaker Raoul Peck has done The Young Karl Marx. August Diehl as Marx and Stefan Konarske as Engels.

A crashing dud.” 5.9/10 on Rotten Tomatoes

Critics Consensus: The Young Karl Marx makes a valiant attempt to make the philosophical cinematic, but lacks sufficient depth to tackle its complex themes. No one wants to watch a movie about a nerd scratching away at his desk. Marx did fight power: he was forced out of three countries.

The trailer shows him visiting a factory with a child labor: but Marx never set foot in a factory.

“He may have dreamed up a party, but he wasn’t exactly the life of it.”

“Quoting Marx puts audience in a state of enjoyment approximating winter in Leningrad.”

“Engels, a limousine liberal before limousines.”

Few will walk away with deeper understanding of Marxism or communism, sort of like reading his work.

March iTunes Reviews

Thank you to everyone who has submitted a review, it means the world to us. To review us on iTunes, visit - https://itunes.apple.com/us/podcast/soul-enterprise-business-in/id893874169?mt=2

Modern Sales Training  5-Stars by mlubbe78  March 11, 2018

This podcast has been a great way to continue to drip the ideas and methods of value pricing into my daily work habits. I run an eCommerce software agency, and my business partner, our Sales Director, and I share our sales and business development workload. Many episodes of this podcast have been shared between the 3 of us as we continue to work hard to develop our skills as pricers within the value prcing model. We’re about 3 years in and getting better with every customer interaction. I also appreciate the Free-Rider Friday segments. They’re a refreshing break from the deep value concepts, and also provide some excellent annecdotes from the present. Keep it up guys. Great stuff.

Great content, entertaining delivery  5-Stars by Tlm WM    March 13, 2018

These guys have great practical insight, refreshing they do it with humility, humor and practical experience. I even applied to my own business because what and how they explained was easy to digest. Great podcast.

Taking Down Trickle Down/and MANY others  5-Stars by Greg Lafollette, March 19, 2018

This review is way (WAY) past due. In the interest of full disclosure I must first tell you that Ron & Ed are both long time friends of mine. So there’s that. But—friendship aside, I will tell you that I consume a LOT of information via podcasts and my subscriptions often outstrip my available time to listen. When that happens, something has to give. Here’s the essence of my review: when something has to give, it is never, NEVER, TSOE. I may get behind a week or two occasionally but I always listen to every episode. These guys are smart, witty, have amazing domain knowledge, and are genuinely interested in improving the human condition—well, at least the professional services part of the human condition. Whether it’s emerging technology, value creation, pricing, the (dreaded) billable hour, or some fascinating tangent the show is always entertaining and enlightening. [NOTE: Except when Ed talks baseball—then it’s lights out for the rest of  that episode!] Keep up the great work gentlemen. You are deeply appreciated. gll


Ed Kless

Ed Kless joined Sage in July of 2003 and is currently the senior director of partner development and strategy. He develops and delivers curriculum for Sage business partners on the art and practice of small business consulting. Courses include: Sage Consulting Academy, Business Strategy and Customer Experience Workshops. Ed is the author of The Soul of Enterprise: Dialogues on Business in the Knowledge Economy, a compendium of a few of the episodes of his VoiceAmerica talk-show The Soul of Enterprise: Business in the Knowledge Economy with Ron Baker, founder of the VeraSage Institute where Ed is also a senior fellow.