Why I read

There is nothing I’ve done in my life that has been more important for my general education than reading. I read a lot. Every day. I read at least a book a week.

I don’t read many books I find particularly challenging (although I have just finished Anna Karenina) and have my Kindle with me pretty much all the time. I make a point of reading the book on there that has been there the longest, so I force myself to read ones I have downloaded and then not quite fancied.

On the often published lists of 100 books you should have read, I’ve normally read 30-40 of them, but most would probably be considered a bit trashy by more educated readers – Not quite James Patterson, but very few in the Tolstoy bracket.

But reading has opened my eyes to things I’d never normally have seen or understood. Life after the Russian revolution in A Gentleman in Moscow, how Afghanistan changed in the Kite Runner and a Thousand Splendid Suns, the German perspective of War in the Book Thief. The impact your words and actions can have in Five People you Meet in Heaven. Every one has taught me something about the world and my place in it, however small.

I think a love of reading is the greatest gift my parents ever gave me.

Bury Knowle Library in Oxford is where it all started. When I was around eight, they ran a reading competition, with actual prizes, for the child who read the most during a summer holiday. I don’t think I won, but it set me on a path that I’ve hardly drifted from throughout my life.

Reading taught me to write too. It’s only by consuming thousands of books that you learn what you like and dislike and inherit some of their styles, almost by osmosis. It didn’t teach me to punctuate properly, as I’m sure some of you will have noticed.

And I do believe that reading is for everyone. you just need to find the right book as an entry point and then work your way through that seam.

In a world, where attention spans are falling and everything needs to happen instantly, it slows things down and can transport you to another place, where the world looks different. You do have to make an active choice to read, rather than graze on the mindless crap and weird attention seekers on TikTok, but I’m good with that. Anything that stops you endlessly scrolling online is a good thing.

I saw a comment on Twitter yesterday where someone asked how long you need to give a book before you give up on it. There are 370 books on my kindle (that I have had for six years) and I have read 360+ of them. I can think of only three or four I have abandoned. The Life of Pi, took me a good 100 pages to begin to hook me in, but it was worth the effort, as the book became one of my favourites ever, with some writing in there I had to stop and stare at and read again for the beautiful way it was crafted.

So, if you don’t read. Do.

You won’t regret it.

I’m not going to write my favourite book list on here, but I will happily recommend a few that have resonated with me.

Think Analogue

One thing  this second lockdown has forced and then reinforced, is that there is a digital solution to most problems and all of our every day tasks. We’re shopping more online, we’re meeting our friends and colleagues online and children are having to be educated online if there’s COVID in their classroom. 

My own job entails hours of staring at data. It’s always digital these days too. But data is just that. Data. Without analogue thinking, it remains as just data too. It’s only when you’re able to see through the data and understand what it’s saying, that it can begin to make sense. And that’s where the idea of ‘Think Analogue’ comes in. 

We don’t think digitally. Few of us think in neat straight lines and along linear paths. 

We think analogue. 

And that’s why working from home and not getting out in the world will begin to stifle creative thinking and hamper brilliant solutions to problems. Early on in the first lockdown, I’d been trying to crack a particularly challenging conundrum with one of my clients. I was literally tearing my hair (i wish) out, staring at the screen, with no sign of inspiration. But a walk with the dog, in the woods near my home solved it. it didn’t just help me solve it, it helped me create something that has changed a lot about their business since and that’s a huge success. 

It’s these little analogue interludes in our day that stop us becoming battery hens and killing our ability to create. 

Isaac Asimov in one of his semi religious books, wrote about a devil called Azazel. He’s two centimetres tall and grants wishes that wreck people’s lives. In one of the short stories, a writer, frustrated by the amount of time he has to wait, has his wish granted, asking for less waiting everywhere. He believes it will give him more time to write and therefore more capacity to earn. As is Azazel’s way, the wish is tainted and the writer, with no waiting time is no longer able to write. He loses those analogue moments, where ideas are able to float into his brain and after a few weeks, can no longer create at all. 

So, even with all of these restrictions we’re living with, think analogue, dream analogue and act analogue. Get out and have some mini adventures. They don’t need to be daring or dangerous, they just need to be different to the day you’ll be spending hunched over your laptop, and the hours you’ll be spending on Zooms over the next few months. 

When we look back at this in a few years time, the things we’ll remember and the things we’ll have pictures in our mind and on our computer will be of the times we spent between the digital. 

Think analogue. 

Think Analogue Go for a ride on your bike by Johnny Lyle

Is help to buy actually helping first time buyers?

This may be a controversial question, but I have to ask whether the Government backed ‘Help to Buy’ scheme is actually helping first-time buyers.

On the surface it should be a brilliant scheme. Outside of London the Government will give you up to 20% of the value of your new home, to a maximum of £40,000. They retain the 20% ownership and share the risk a little in that if the value goes down, then so does their investment. the 20% remains at 20%, whatever the value.

But I have an issue with it.

And that is that the homebuilders are loading the price of the new houses by up to £40,000.

So the valuation of the house isn’t real and no-one is prepared to call ‘Emporers new clothes’ as they are making too much money.

The selling agents make great commission and the home builders get an amazing price for a new home.

And the only loser is the buyer.

You probably won’t notice when you’re buying it.

But this overvaluing become very real when you come to sell it.

In the ‘Help to Buy’ paperwork, they warn that the value may go down for the first five years by an average of say 5%.

And this is where the real issue lies.

When you come to resell it, you can’t sell it to someone else using the same ‘Help to Buy’ scheme that helped you to buy as it’s only available for brand new homes. A previously owned home, however new is no longer a new home by the strict definition of their scheme.

So the real value of the house is crystallised when you come to sell. Because the house is no longer new, you can only sell it to a buyer without the help of the scheme and their own additional £40,000.

So by definition, it has to find its value based on the other homes for sale around it.

in one scheme I looked at recently, the ‘Help to Buy’ to buy houses were set at a price of £191,000 for a three-bed semi.

Not bad value most of you will think.

But when every other slightly older house in the road is for sale at £145-155,000 it starts to look like a very expensive trap that you’ve been lulled into.

There’s no way out without taking the hit.

You can’t even rent it to cover your losses as it’s in their terms that you can’t rent a house bought under the ‘Help to Buy’ scheme and as they own the second charge, they can enforce this.

So I believe that we’re creating a new negative equity bubble that’s just waiting to burst.

We’ve all been told since we were kids that the ultimate freedom is to own your own home. There’s nothing better than investing in bricks and mortar.

But not when it’s deliberately overpriced and almost impossible to resell within ten years without taking a huge loss.

Of course the mortgage lenders are going to back the scheme as they have the first charge over the property. Unless it’s been a completely savage cut will see their 25% safely back in their previously Government backed pockets.

But for the little person with a dream of home ownership, if their circumstances change and they have to sell, their future is one that’s faced with a potentially huge personal debt or a home they don’t want to live in and yet can’t afford to sell.

So I’m not sure the ‘Help to Buy’ is helping at all.

It’s inflating prices to make it even harder for first-time buyers to get on the market without it and storing up problems for them in the future.

If you do think it’s for you, then read the small print. read it again and then choose to keep renting for a while longer.

And don’t believe that ‘Help to Buy’ will actually help.

Why Tesla need Apple and Apple need Tesla

Tesla are losing money at an incredible rate. According to The Verge, they lost around $785 million in the first quarter of 2018 and are down to cash reserves of only $2.7 billion, after starting the year with $3.4 billion. If they carry on at this burn rate they will run out of cash and have to file for protection by the close of 2018.

Apple, on the other hand, are making money like it’s going out of fashion. In the last quarter of 2017 they made a profit of $20.1 billion. This leaves them in a position where they have retained profits of $91.9 billion.

But when did Apple last create anything that was truly disruptive? The iPod, the iPhone? maybe the Apple TV?

All of their recent lunches have been derivations, not innovations.

Their launches over the last number of years have been dull to say the least. But there’s little doubt they design some of the most sought-after products in the world that carry an incredible premium price.

On the surface this is similar to the Tesla.

It was a disruptor in the passenger car market and their Semi is sure to disrupt the market for Heavy Goods Vehicles. If you’ve ever driven a Tesla, it’s hard to argue that they are anything other than quick, but their fit and finish is poor. It’s nowhere near as good as the products coming in from the German manufacturers Audi and Mercedes and a long way behind the British designed Jaguar iPace – All of which will match the Tesla for range in the next few years.

The Jaguar iPace at the Electric Innovation Centre in West Bromwich UK
The Jaguar iPace at the Electric Innovation Centre in West Bromwich UK

When these products hit the mainstream market, they will have a serious impact on Tesla sales. The competitors’ products just look and feel better. The one area Tesla continue to lead is in their battery technology – which for me as an iPhone owner, is another serious Apple weakness.

So Tesla need design input, they also need cash – desperately if they want to continue to compete. The interior of the Tesla is just plain bland and for me, cars like the Model X are different, but ugly and overcomplicated. The gull-wing doors are schoolboy stuff, designed by someone with a Countach poster on their wall as a kid. For me, they have no place in the real world.

Apple need to advance their battery technology and look for an outlet for their cash that is going to give their shareholders a long-term return. We know Apple are working on a car, it’s been leaked all over the place. When Apple do eventually launch, are they really going to be satisfied with the standard charging system available to everyone else?

The answer has to be no.

They even had to design their own charging plug and headphone socket for their phones!

The Tesla charging network is already worldwide and can deliver charge at exceptional rates.

Tesla Model S recharging

We know that Dyson, who have some of the most advanced motor technology, are working hard to produce a car too. Autocar have produced their own drawing of what this may look like here. It’s quite cool and they could again come in as another disruptor to the car market.

Dyson car by Autocar

So for me, Apple and Tesla throwing their technology and design together will be the perfect match. Working together with Apple’s cash, will leave them both in a considerably stronger position than the sum of the parts.

I’m not sure which of the stocks to advise investing in, but maybe wait until Tesla tanks a little further and then swoop in, as if Apple come to town with the Tesla, it is going to be a world beater and every major car manufacturer needs to take note.

They are two brands that have made their name for innovation. Their brand values overlap in almost every way and there doesn’t seem to be anything that would stop them working together apart from some bloody-mindedness from Apple because the existing Tesla model range wasn’t their initial concept. To me though, it seems like their innovation and their organisational culture – such as single-minded strong leader, obsession with detail, being a massive disrupter in new markets – are completely complementary and both need each other to grow to the next level.

So, watch this space. It’s going to happen.

Wanting for nothing and why brands have a crisis coming

Brands have got a real problem coming. It’s also going to have a huge effect on some of the biggest economies around the world too.

We all have enough stuff.

Back in Spring 2008, my favourite brand Howies sent a card inside my quarterly catalogue asking if I’d fallen out of love with them, or maybe whether I just have enough clothes for the time being. It has been something that has stayed front of mind for nearly ten years now as I think we are at a stage where we probably all have enough stuff.

I just have enough stuff thanks
I just have enough stuff thanks

I have a newish computer, my car is fine (even with 130,000 miles on the clock) and I have quite a few watches. My Phone is reasonably recent and I really don’t need an Apple Watch, a new TV or another bluetooth speaker. In fact we have TV’s all over the place, bluetooth speakers all over the place and a lovely old valve amp for playing proper music.

I have outerwear coming out of my wazoo, at least six pairs of jeans, two gilets, jumpers, shorts, socks and shirts in every material for every eventuality.

I have access to almost every song ever produced with Spotify and every film ever made, with a combination of Amazon Prime, Netflix and a mildly chipped Firestick.

I adore Oxford United and should make more effort to see them home and away. That’s tribal, it isn’t about the brand. This is an opportunity for tribal experiences like football and they will be one of the few areas to do well out of this.

I love holidays, exploring new places and going to the pub. In fact, probably my favourite thing to do is walk to the pub with the dog, have a few pints and walk home again.

But in effect, I want for nothing.

Which is the problem that any brand faces.

We all have too much stuff.

There is no consumer good that creates real desire, real anticipation and a real need to have it in your hands.

New products are all derivations. Small but barely discernible differences that the brands create to try and make us want them. But the differences aren’t real enough. They don’t add value to our lives and as such, they just become normal, within a moment of owning them.

Social media makes things worse. You can now see that everyone owns everything and we are all bored of this. It’s why so many people are turning away from Facebook and it’s dying on its arse. No-one lives that perfect a life and we can all see through it for what it is.

Showing off.

But if everyone has everything anyway, who is there to show off to and what with?

It’s also why everyone needs to pay less than full price for anything. Why else do you think the outlet villages and discount sites are so prevalent? The only thing left to give you a buzz is the bargain, rather than the brand you’ve bought.

So what do brands do to overcome this?

The answer is to fulfill something deeper than a need to own something. My clever friend Leila pointed out that this is why there’s a huge rise in Mindfulness and Wellness. We are all searching for something more than just the diminishing thrill of owning things. I know with the challenges I’ve been through in the last year, I couldn’t care less about material things, I’m quite pleased to be vertical and pretty much pain-free again.

That’s one hell of a challenge and one thing I can say is that not all brands will survive this imminent crisis.

You can summarise it all very easily in just one line.

If there is no actual need, then the only way to sell is by creating desire.

maybe that is what marketing is all about. Creating desire. The issue I have is that we are all losing our desire for material things and therefore selling anything material is just going to get harder and harder.

It’s a self-imposed austerity that could run for quite a while. With an economy built entirely on buying such things and a Chinese economy built on making these things, I suspect things are going to get a little rocky in the manufacturing-based economies.

The growing problem of student debt

Students loans aren't working in the UK
Students loans aren’t working in the UK

Student loans aren’t working.

They aren’t helping those who need help the most. At the same time, they are scaring potential students away and making the universities irresponsibly rich. They are also creating a future debt time bomb that will bring the country to its knees again, when it becomes clear that a massive proportion of the ‘loans’ are never going to be paid off, in the not too distant future.

Universities are no longer incentivised to deliver the best possible education, but rather strip back the contact time to the minimum they can get away with, whilst still achieving acceptable results. The focus is becoming about getting a result rather than learning to love a subject, inspire a new generation or just progress thinking in their area of study. I’m sure there are many exceptions, but with so many students coming from the middle majority who only got average A levels, standards simply have to fall, whilst universities just get richer.

Universities are now becoming ultra-powerful property owners and managers, creating a near monopoly for student accommodation in their city or campus. We all know that a position of monopoly will always drive competition down and prices up. This isn’t good news for students.

The university is no longer just taking the £9k tuition fee but adding an average of £500 per month for accommodation too, which adds up to £6k on top. Restrictions for private landlords are being added by the universities to make it harder for genuine competition to enter the market. Any graduate of my generation will have lived in some terrible ‘Young Ones’ style places as students and it probably made us appreciate how lucky we were to be gaining our free education and living away from home.

But graduating with £50-60k of debt is a bad thing. The thought of the debt is enough to put off some very bright young people who are scared of carrying that debt burden through their life ahead. Even worse when the government up the interest rate to 6% it is just asking to be bundled up and sold to the highest bidder, which means the graduate debtor will be pursued mercilessly for payback.

A reasonable earning graduate who becomes say a senior leader in a school by the time they reach 30 years old may be paying back £300 per month for their loan. They will also be paying into their pension at the same time. They may also be trying to buy a house or even bring up kids. It is just not possible to do all of these things at the same time unless you are from the very richest elite, where money isn’t an issue anyway.

If you don’t need a degree to enter your intended job, more and more will conclude that it doesn’t make financial sense to do so. As such, far less will actually go and our university sector will become ever more desperate cost-cutters.

There will also be millions of graduates who never get to the earning threshold to pay the loan back and little incentive for them to earn over it and start being hit hard by the payback they will face when they do.

So my solution is simple. Introduce proper means testing again, so the poorest get the most help, the richest get none and change the payback of a loan into a payment into a personal pension.

We should cap university tuition fees to a sensible level. Ensure class sizes are sensible too and agree a minimum amount of contact and one to one time.

We also need to cap accommodation fees so they are at least reasonable. £500 per month rent is the price of a small house per month to rent, not a single bedroom in a flat with five others who all share a kitchen – unless you are in central London.

And finally, add a new type of graduate tax, where they pay an extra few percent, but that tax goes into an individual pension contribution account for them to claim when they are old enough to retire – however old that may be by then. That way, they become self-sufficient and the state is paid back by helping them to provide for themselves in their old age.

University education should be free and accessible to everyone who is bright and motivated enough to pursue it. It can’t just be a right for the rich or those with the nerve to go massively into debt and mortgage their own futures.

WH Smith Munch – A brand with fake values is a brand that is destined to fail

I was at east Midlands Airport recently and they have something of a captive market for their meal deals with both Superdrug and WH smith offering meal deals for £3.99. On the surface this looks like great value.

WH Smith is a brand that started 224 years ago in 1792 in London and has 1,351 outlets with 615 on the high street and 736 travel outlets in airports and stations. It turned over nearly £1.2 BILLION in 2015 and employs 14,500 people.

So with all of these years of experience, heritage and the sheer number of interested parties, you’d think they would understand the concept of authentic brand values. Built on this history and surviving the worst of the high street recessions they really ought to know better.

But they don’t. They have an own brand product in store called ‘Munch’ which is entirely fake.

WH Smith Munch Sandwich a brand with totally fake values
WH Smith Munch Sandwich a brand with totally fake values

Munch, which is a range of sandwiches and wraps, tells you you can ‘Grab a bite of the good stuff’. A pretty compelling proposition for food on the go. They back this up with a brand support statement that says ‘Gloriously delicious food-to-go. So irresistible everyone wants to get their paws on it! Satisfies even the wildest of appetites…’

WH Smith Munch Sandwiches with a brand statement that is totally fabricated
WH Smith Munch Sandwiches with a brand statement that is totally fabricated

But the sandwich was disgusting. I didn’t want more, I never want to eat it again, I never want to eat anything for sale in WH Smith. I didn’t even want to finish the sandwich. Eating it, made me feel ill and dirty. Eggshell in the egg mayo didn’t help and even the bread was stale and unnatural. So I had to have look at the ingredients.

This was a total shock. I was genuinely horrified with what it contained and it bore no relation to the brand values all over the packaging whatsoever.

WH Smith Munch Sandwich - The ingredients 100% horrible with an added of 18% of total shit
WH Smith Munch Sandwich – The ingredients 100% horrible with an added of 18% of total shit

Even trying to ignore the fact that claimed ingredients added up to 118% (It must be all the shit they have piled in to make it taste less natural and healthy) the list was not all all irresistible. In fact it was entirely resistible.

I won’t be eating ‘Munch’ again. I’d suspect that if this is how WH Smith run their business, they are in trouble. I’ve talked about Tesco in the past and the start of their problems being with the quality of their products, which all came true. Any brand that says one things and delivers another like Abercrombie and Fitch will be found out soon enough. WH Smith are that brand.

I’m no whistle blower, but if I had any money invested in WH Smith, I’d get it out fast. This is a brand heading for the gutter.

Why plain packaging for cigarettes is a bad idea

The UK is about to become the second country in the world (after Australia) and the first in Europe to enforce plain packaging for cigarettes. It is due to be implemented by 20th May 2016, although it doesn’t seem to have happened yet. I wrote about it here in 2011 and my view still hasn’t changed.

Plain packaging for Cigarettes in the UK
Plain packaging for Cigarettes in the UK

And I think it’s a bad idea for a few reasons.

  1. Taking away the branding will allow cheaper brands to compete on a level playing field with the big brands. Rather than making it less attractive they will make it more affordable. If you can’t see the difference in the packs and you’re new to smoking, why would you buy the bigger and more expensive brands?
  2. It will make it easier for fakes to come into the market as the packaging is even easier to copy. Fake cigarettes aren’t made to the same standard and could even be more dangerous and contain all sorts of additional nasties.
  3. You will make it cooler. It is now so obviously a bad thing that it becomes something that is more attractive to do. Anyone who has ever smoked, knows the dangers and ignores them. In Martin Lindstrom’s brilliant book Buyology he proves using brain scans that when smokers see the warnings on packs, rather than put them off smoking, it creates an almost religious like fervour. They become more desirable – despite all good sense saying otherwise. The more you try and drive it underground, the more prevalent it will become. As a parallel, it’s not exactly difficult to get hold of Cannabis these days and that’s meant to be banned altogether.
  4. It appears that the tobacco industry are going to take the government to court for loss of trademark value. According to the Telegraph, this could be for up to £11 billion.
  5. Smokers pay their own way – Because they kill themselves with smoking they have finite lives. they pay fortunes into the NHS through the taxes on cigarettes and on average, die much younger. The cynic in me says the government know this and by taking this route, they will maybe even make more money in tax revenue on smoking. The UK government take £11 billion PER YEAR from smokers. Are they really trying to kill this golden goose?

The only good plan (according to the Sun) in my mind is to ban packs of ten cigarettes and Menthol cigarettes. These are definitely entry products for young smokers. There will always be enterprising kids at school who will break bulk and sell singles (or loosies as they were in my day) but it will make smoking a little harder to start.

It’s only my view, but I am convinced I see more young people smoking than ever before. Putting cigarettes behind doors in the retail outlets doesn’t appear to have made any difference – It may even have had the opposite effect to the one they claim they were aiming at – And they are ploughing on anyway.

Why we need British Steel

British Steel logo

British Steel first appeared in 1967 which was formed out of the nationalised British Steel Corporation (BSC). It went on to be privatised and launched as British Steel plc in 1988. It was even big enough to be part of the FTSE 100 Index. In 1999 the company merged with Koninklijke Hoogovens to form Corus Group  and even then, many of us thought it was a mistake and would start the end of the steel industry in Britain. It’s easy with hindsight, but it looks like that was right.

Corus logo

And it’s why we need British Steel again. Quality, traceable, home manufactured fabulous, british steel.  It may not have been a glamorous brand, but it was one we knew and understood.

I shared a tweet the other day by a man called Dick who pointed out the following “The argument for Trident is that it costs £120bn and saves 600 jobs. The argument against Steel is that it costs £1.5bn and saves 15,000 jobs”

There is a new standard in Europe called BS/EN 1090 and what it says is that EVERYTHING, right down to welding rods has to be traceable back to source. No traceability, no CE Mark. This is currently impossible with imported steel as there is no way of knowing where it came from. If you don’t know how it was made, where it was made or what it was made with, then how can you guarantee it is safe? For an insurer, how can they assess that risk?

So for me, bringing back British Steel would be a huge step forward.

So maybe this is just too obvious to be useful but if we are about to lose our steel industry and 15,000 jobs anyway, then surely it must be worth investing in this industry again.

We poured billions into our banks to save face more than to save jobs and now it must be time for this support to turn to one of our core industries. Steel.

Even taking the finances alone. 15,000 families will be immediately having to draw benefits for some considerable time. Let’s say an average of three years. Then by my maths that’s at least £1bn million over this period and ongoing devastation to communities that just don’t need more bad news.

If you take Port Talbot as a case, then maybe energy is the issue? This can be solved with the Severn Barrage. Every aluminium producer in the world seems to use Hydro Power to smelt  aluminium, so why not clean steel up at the same time and make it go green. That’s a bargain at between £10-34bn – which makes the saving of steel look positively cheap.

Severn Barrages map

British Steel is Britain through and through. It’s literally what our country was built with and by my very simple way of thinking, something our government should not just support but make it a model of how decent targeted intervention can help rebuild Britain from our proud industrial heritage outwards.