Tag Archives: TED

November 12, 2010 · 12:00 pm

My flat-renting decision process

I liked very much when Jesus Encinar (CEO of idealista.com) explained in his blog the process he followed when buying a house. Yesterday, I thought “I could share my buying decision process in my blog to help others” (maybe there are even some valuable ideas!).

The situation is:

  • I am moving to France, staying in the same company which gives me a limited allowance to pay the flat.
  • A services company (SC) helps me with finding houses according to pre-defined criteria of my choice (2 bed-rooms, central location, garage, etc…).

I was told that in France it is not the custom to rent furnished flats, nevertheless, I asked SC to look for some fully furnished flats (even if the price was slightly over the allowance limit) and some un-furnished ones (at a slightly lower cost than the allowance limit). SC presented me with 5 un-furnished ones and only one furnished flat. Between Tuesday 9th and Wednesday 10th October we visited them all.

Un-furnished flats

Once we arrived at an un-furnished flat for the visit, I would always pose the same value proposition to the agent of the owner side to start a negotiation; here is the rationale:

“say that your monthly price is 50€ cheaper than my allowance limit, I’d take your flat at an increased price, just the allowance limit (that is, 50€ more expensive than their offer) if the owner spends 1,200€ in equipment (e.g. washing machine, oven, sofa…)”.

“Why 1,200€?”

I explained: the result of 2 years x 12 months x 50€.

I justified that I would be at least 2 years in Toulouse and that, once I left, they would own the equipment that would have been bought at no cost to them.

That is a typically win-win situation. What do you think the outcome of the negotiations has been?

  • One agent gave an outright “No”;
  • another one gave a day-delay “No”;
  • other asked commitment to their house before saying yes (?);
  • one committed to the purchase of a fridge without quoting a final prize (a fridge is not worth the 1,400€ this owner was asked to invest; also this flat was the most equipped of the un-furnished ones); and
  • the final one had not given a response after a day.

The decision up to this point was clearly the 4th case (I had discarded the 5th due to the state of the flat and the 1st who gave an outright “no”).

Then, we visited the furnished one.

This one was fully equipped, fully. Since I also liked it, the decision process, all other things being rated equal, then was the following:

  • Furnishing costs: How much do 2 double beds, plus a sofa, some tables and chairs, a TV, washing machine, etc… cost? I started asking my fellows as I am completely unaware of prices: each bed about 600€, leather sofa ~1,400€, oven ~400€, microwave ~400€, fridge over 600€… I started getting dizzy…
  • In the less equipped one I would need to spend over 4,000€; in the medium equipped over 2,600€; in the furnished one, nothing (but I wouldn’t own the stuff).
  • The furnished one would cost me 100€ more each month, 1,200€ a year or 3,600€ in 3 years. This amount, 3,600€, is in the order of what I would have to spend in the un-furnished ones.
  • In the furnished flat I would defer the payment of the equipment and spread it among the 3 years, permitting me to initially invest those 3,600€ and gradually dedicate 100€ per month to the rent… (just this deferral, I calculated, could generate over 400€ in 3 years if invested in stocks performing as the general index… meaning: cash for the next move).
  • The one with the heating of gas instead of electricity (I was advised) would save hundreds a year.
  • Not owning the furniture would give me freedom…

… by now, I guess you already know which was my final decision: I chose the furnished flat (I hope everything goes well, and in fact I can take it).

Once you have gone along with me during the reasoning above, I wanted to leave you with the following video of a TED talk in which the speaker, Simon Sinek (at TEDxPuget Sound event in WA, USA), explains how buying decisions are indeed gut decisions taken in seconds (~6’00”), while the rest of reasoning is just we trying to convince ourselves that we have taken the right decision (he uses Apple products as example):

I guess I took the decision once I viewed the leather sofa in front of the flat screen… Did I convince you with my rational reasoning?

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September 6, 2010 · 12:00 pm

TEDxMadrid 2010

Last Saturday, a friend and I attended TEDxMadrid, an independently organized TED event in which several speakers presented some “ideas worth spreading” as the TED slogan goes.

The event took place in HUB Madrid, a “unique ecosystem designed to enable individuals ranging from corporate executives to community leaders, from policy-makers to entrepreneurs and freelance professionals to thrive. It is an office and events space where you can access social business ideas, innovation, knowledge, market opportunities, inspiration and experience” as they put it.

The event was streamed and the videos so far are available here. It was also funny to see the twitting activity that took place among the people being at the meeting (check #tedxmad, #tedxmadrid…).

A summary of each talk was made in the form of sketch boards by Puño & Gorriti that are available in flicker.

At the end of the event there was a short performance of impromptu theatre by “Impromadrid Teatro”, it was a funny experience. I have a friend who also has an impromptu theatre company in Madrid, “Impronta Compañía de Teatro Espontáneo”, I must go to one of their performances!

I still have to mentally “re-work” many of the things we heard and saw, and look for the many webs, books and ideas that were raised. Nevertheless, in this post I already wanted to share some thoughts that I took with me:

  • Slavery. It was commented by Antonella that in the last TED she learnt about “Free the Slaves”, an organization that liberates slaves around the world… slaves in the XXI century? We hear about women obliged to work as prostitutes or children working in some hidden factories… but when I heard the figure 27 million of them, I was shocked.
  • To be exponential in our thoughts. Alberto Dubois showed in his talk how evolution is exponential (human evolution, computing evolution, genome decoding evolution…) but we are normally linear in our thinking. We may apply the “exponential” way of thinking to many other fields, think of it.
  • BRINKs. We all have heard about the BRICs (the term coined by Goldman Sachs to refer to Brazil, Russia, India and China) or the PIGS (the term coined by Anglo-Saxon economists, used by FT, to refer to Portugal, Italy, Greece and Spain – lately Ireland and Great Britain as well), Alexander van de Putte introduced the BRINKs. This term refers to Brazil, Russia, Iraq, Nigeria and Kazakhstan, the countries which increased oil production will defer (once again) the estimates for the peak oil.

Finally, I wanted to thank C. Todd, Javier, Derek and Antonella for the great effort they have put into this event.

For those of you who could not attend this event but would have wished to do so, be aware that a similar event will take place in a month from now in Madrid, TEDxSol, on October 5th.

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July 31, 2010 · 12:00 pm

Monkey Investors

Just a few weeks ago I wrote a post about the Wall Street Monkey. Remember that the story was based on Burton G. Malkiel’s book, “A Random Walk Down Wall Street”, where he suggested that a blindfolded monkey throwing darts to select stocks wouldn’t do worse than professional fund managers.

I watched yesterday TED Talk by Laurie Santos, “A monkey economy as irrational as ours”, where she explains how she studied whether our mistakes were due to a badly designed environment or badly designed minds.

She made several studies with apes, introducing the use of money to them… and she found that apes show the same irrational behaviours regarding risk taking as we humans do…

I loved especially the following passage around minute 16:30…

“… we can actually give the monkeys a financial currency and they do very similar things we do. They do some of the smart things we do, some of the kind of not so nice things we do like stealing and so on… but they also do some of the irrational things we do; they systematically get things wrong and in the same ways that we do.

This is the first take-on message of the top… if you saw the beginning of this and you thought: “…oh! until I go home and hire and put a monkey as financial advisor … they were cuter than ours…”, don’t do that: they’re probably gonna be just as dumb as the human one you already have!”

At least, apes would charge us less… just a couple of grapes.

“A monkey economy as irrational as ours”, by Laurie Santos.

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July 15, 2010 · 10:00 am

Project managers and Pencils

Today I was attending a project management course at Airbus. After some introductions, the teacher came to the always controversial (within such a technological company) comment that “the project leader needs to have experience in project management not in the technical issues related to the project”… she then cited aircraft as an example: “nobody within Airbus may know every technical detail of an aircraft which counts with hundreds of thousands parts, yet there is someone managing its development…”

That example seems very clear. Tonight, while listening to a TED Talk on the exchange of ideas, by Matt Ridley, I got the thread to a way better example: that is the essay “I, Pencil: My Family Tree as told to Leonard E. Read” by Leonard E. Read, which can be found at the Library of Economics and Liberty.

I believe this a much better example because of exactly the same reasons Mr. Pencil gives:

“[...] I have a profound lesson to teach. And I can teach this lesson better than can an automobile or an airplane or a mechanical dishwasher because—well, because I am seemingly so simple.

[...] Simple? Yet, not a single person on the face of this earth knows how to make me.”

Then, the pencil goes explaining where all its components are coming from…

“[...] My family tree begins with what in fact is a tree, a cedar of straight grain that grows in Northern California and Oregon. Now contemplate all the saws and trucks and rope and the countless other gear used in harvesting and carting the cedar logs to the railroad siding. Think of all the persons and the numberless skills that went into their fabrication: the mining of ore, the making of steel and its refinement into saws, axes, motors…”

If it’s clear that nobody knows how to make simple pencil, clearer will be for any other case of a more complex product.

There is indeed a Mr. President of the pencil company, there may even be a Pencil Programme Manager, but as Pencil says: “There is a fact still more astounding: the absence of a master mind, of anyone dictating or forcibly directing these countless actions which bring me into being.”

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February 23, 2010 · 2:12 am

Nothing like a good red wine…

The recent Tweet from Freakonomics http://bit.ly/9jsc3r, in which they tell how American supposedly fine wine aficionados could not tell the difference between the wine they were given and the one they were looking (and paying) for, reminds me of 3 different cases to point how we can be influenced in our perceptions:

  • The first is a personal anecdote. I have always preferred Coca-Cola over Pepsi, one of these people who had never bought a Pepsi in a supermarket. In 2007-2008 I did a test at home to see whether I was able to distinguish one from the other. I did the test with my partner. I was blind-folded while she poured same amount of Cola and Pepsi in two identical glasses. She left them for some couple minutes in the fridge so they would get same temperature, etc, etc. Then I tasted them. After trying the first glass I said “Pepsi, I don’t even need to try the other”. Then I thought it twice. I tried the second glass. Thought for some seconds. Then again the first. Then… then… I mixed everything in my mind and couldn’t distinguish one from the other, to the point of changing my initial choice and being wrong.

Whenever I tell this story to my friends, they tell me “I can distinguish them”: I challenge you to do so. Find a helper and take the test. Please let me know the result.

If you thought my test is not representative, here is another story:

  • This is a TED talk by Benjamin Wallace on the price of happiness. Benjamin goes exploring different luxury articles and finding that they don’t bring him or those close to him any special feeling. He indeed does a similar test to the one I did, this time with luxury oil, with more varieties to distinguish and more people to try them, the result… guess it.

 

After having read the case of the fake Pinot Noir, having suffered the non-distinguish ability of  Pepsi and hearing to the TED talk cases… we might wonder: why are we mislead so much by perceptions? Why do we pay more for something that doesn’t bring us any enhanced customer experience except for being able to tell that we paid that amount for this?

Last case I wanted to point…

  • The Dutch are well known for being a very pragmatic nation. Here you have a case, again, for wines (just to close the loop). What do you care about the brand of a wine? Let’s remove it. What do you appreciate in it? Is it the grape type? Is it the fruit flavour, the tannins? So that’s what you need to know!! The rest… better to call it “4. Red Wine” and remembering that it comes in a blue bottle… check it: http://94wines.com.

Prost!

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