Motorcar Parts Hits New Peaks But Doesn’t Look Fat At $15

Motorcar Parts of America(MPAA – Snapshot Report) analysts are raising estimates after the recent record-setting quarter. Growth rates are strong and shares are trading at a value as well. This Zacks #1 Rank (Strong Buy) is the top rated company in a hot industry.

Motorcar Parts of America is a remanufacturer of alternators and starters for al

l types of automobiles. Products are sold through auto retailers and professional repair markets.

Net Income Soars Past Expectations:

On Feb 7 Motorcar Parts reported fiscal 2011 third-quarter results that showed a 75% jump in net income, to $3.8 million. The top line grew 13%, to $41.3 million.

Earnings per share was $0.30, 7 cents better than the Zacks Consensus Estimate and good enough for the seventh consecutive earnings surprise.

The CEO said the company plans to expand on the record results, particularly through an acquisition of Fenwick Automotive. The deal should go through in early fiscal 2012.

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Bullish Estimates Trend

After the news all 3 covering analysts polled by Zacks raised their full-year projections for this year and fiscal 2012. The consensus for 2011 is up 6 cents, to $1.05 and next year’s is up 7 cents, to $1.24.

Last year Motorcar Parts earned $0.74, which means the projected annual growth rates are currently 44% and 18%, respectively.

Valuations & Comparisons

Shares of MPAA are trading with attractive valuations here. Its price to sales comes in at 1.1 times, which is better than most in the industry. The same can be said for the company’s 13.6x P/E and 1.5x P/B.

Right now the industry is ranked 18th out of 264, and MPAA is the top rated of the 8 companies in the group. Its net profit margin of 7.25% is more than twice the industry average. Motorcar Parts’ ROE, ROA and ROI are all in line or better than its peer group norm.

The Chart

Motorcar Parts shares have surged recently, no doubt about that. But in the chart below you can also see just how much the estimates have improved as well. As long as those estimates maintain this momentum MPAA should continue even higher.

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service

The Master of Online Mayhem

Gabe Newell is the next billionaire in videogames--and he's changing the economics of the industry.

Fully armed with toy cannon, Valve founder Gabe Newell on the roof of his Bellevue, Wash. offices.

Gabe Newell was going blind. The founder of videogame seller Valve suffers from Fuchs Dystrophy, a congenital disease that slowly destroys the cornea. "I have dead-people eyes," he said at the time. Double cornea transplants in 2006 and 2007 cured him and changed him utterly.

"The thing that snuck past my defenses was that not only could I see again but I could see better than I ever had before. I felt like I was in a fantasy story. It reminded me of how fast the future is coming at us and from what unexpected directions."

The symbolism here is almost too juicy. Newell was already one of the most clear-eyed seers in the digital economy even with bad corneas. ITunes, Amazon and Netflix reshaped their slices of the media business by moving people from physical stores to the Web. Valve has done the same thing with PC videogames.

Valve's site, Steam, has 30 million customers downloading PC games and add-ons. Only Nintendo, Microsoft and Sony have larger footprints in the gamer community. A milestone was reached last year when unit sales of PC games via download outstripped sales of boxed games in stores for the first time, according to research firm NPD Group.

"I think Gabe is brilliant. He's one of the smartest people I know," says John Riccitiello, chief executive of one of the world's biggest game publishers, Electronic Arts. "He has some sharp insights for what makes good games and for what's around the corner in technology."

Steam controls half to 70% of the $4 billion market for downloaded PC games, selling titles from bigger firms such as EA and Activision, as well as Valve's own games. Its sci-fi shoot-'em-up thriller Half-Life 2 has sold 12 million copies since 2004 and is the highest-rated PC game on the Web site Metacritic.

The 250-person company releases no financials but, according to Newell, is "tremendously profitable." Ed Barton, a games analyst at IHS Screen Digest, estimates that Valve's revenue in 2010 was in the "high hundreds of millions of dollars." (A 2005 FORBES story on Valve had the company grossing $70 million with a fat $55 million in operating profit.)

Valve announced last October that it was on track for its biggest year ever, with 200% year-over-year growth. Newell says that, per employee, Valve is more profitable than Google and Apple. A potential buyer was rumored to have made an acquisition offer a few years back for the Steam piece only, but Newell supposedly refused to split the online storefront from Valve's game-publishing arm. (Valve denies being made an actual offer, only confirming that it received interest in both Steam and Valve in the past.)

Various sources value the company at $2 billion to $4 billion, which is reasonable, considering the $4 billion to $6 billion valuations being put on Zynga, the maker of Facebook game hits FarmVille and Cafe World. Newell owns more than half of the business, making the Harvard dropout a near billionaire, if not one already.

Newell looms large both in real life and the industry. His 6-foot-4 frame often makes him the target of fat jokes by online wags. He is also unafraid to tweak rivals, once calling the PlayStation 3 a "total disaster." He has since made up with Sony.

Newell started Valve in 1996 with his friend Mike Harrington. Both had been at Microsoft for more than a decade and cashed in their stock options to fund the company. (Valve has never taken a penny of venture capital.) They licensed some code from the hit game Quake to create a new game called Half-Life, which debuted in 1998 and sold 2.5 million copies in its first year. Newell bought out Harrington after he left the company in 2000. Valve launched the Steam storefront in 2004, a time when most U.S. homes had dial-up Internet speeds.

Steam appealed to gamers because it simplified the arduous process of downloading, setting up and patching games. Steam also encourages its community to create, distribute and sell "mods," or modified versions of Valve's existing titles on its network. Newell says that around half of his employees got their careers started from making mods. A onetime manager of a Waffle House in Florida is now a lead software developer on Half-Life.

Steam now helps its customers make money, too. In October it opened a virtual goods store where players can sell items such as weapons and accessories. A few enterprising players have made as much as $20,000 a week. Newell says it would be easy to distribute movies and music through Steam, but he's not as interested in breadth as he is in making a "better piece of content," which involves giving customers more ways to interact with the media. Its Steam Cloud service, launched in 2008, allows players to store their games and data and is accessible from any PC with Steam installed.

Steam's appeal to publishers is in giving them the opportunity to sell directly, cutting out the profits extracted by distributors. Publishers earn a gross margin of around 70% on Steam, compared with 30% via retail stores. They have a lot more flexibility selling through Steam than they do through stores or even a site like Amazon. Steam gives publishers live stats on how customers are reacting to marketing messages or price changes. Discounts on titles, like weekend deals, are common on Steam and have led some titles to see a lasting bump in sales.

Valve's strength in PC gaming may, however, be its limiting factor. The PC game category is a mere 8% of the $50 billion industry. Newell admits to missing out on trends like mobile, Wii-style motion games and Facebook games. "If we tried to blaze new trails of our own and ride all the latest trends, we'd likely be bankrupt by now," he says.

But knowing what not to do is the reason Newell is on top. As EA Chief Riccitiello says about why Newell succeeds: "I don't know what would be the right expression . . . maniacally focused?"

A few years back a friend told Newell he needed a hobby. He decided to teach himself to be a machinist. Newell took the car out of the garage and replaced it with a belt grinder, milling machine and salt pots for heat-treating steel. Since then he's been cranking out geek accessories and toys such as an iPad stand and custom swords. "I thought it would be a good complement to staring at a screen all day."

Competitors and traditional retailers both fear and respect Steam. David Perry, chief executive of competitor Gaikai, called Steam the iTunes of the game industry, warning that, like Apple's digital music service, Steam could become a monopoly. GameStop President Tony Bartel gushes: "They've really ridden a trend and led a trend. There are other people who have tried to get into this space, but they haven't done it with the elegance that Steam has."

Microsoft, Electronic Arts, Blizzard and GameStop have been investing heavily in digital, with download stores of their own. Consolemakers Sony and Nintendo each have their own online game networks, although they don't sell the blockbuster games that Steam does. Microsoft, in particular, has done well with its Xbox Live network, which is thought to have topped $1 billion in revenue last year, both from subscriptions and sales of digital content, including games, videos and music.

Last July a new competitor emerged in cloud-gaming service, OnLive, which does away with downloads entirely. Instead, OnLive streams games directly to a PC or TV. The company won't release how many customers it has, but it is adding its service to Android tablets, smartphones and TV set-top boxes. Newell says OnLive has done admirably figuring out how to stream games, but thinks that distribution method is inefficient and expensive.

OnLive Chief Executive Steve Perlman counters that his company is profitable and its streaming costs are reasonable and in line with the estimated 3 cents per gigabyte that Netflix pays. Perlman dings Valve for having an audience "limited to people who have a high-performance computer." He says he will be on 10 million TVs by the end of this year.

Newell will continue to have it both ways. Despite the media portrayal of Steam as a retail killer, Newell works closely with chains like GameStop. Free weekend game promotions on Steam often lead to sales spikes in stores. The Valve title Left 4 Dead 2 sold more than 4 million copies at stores in 2009. This year it is releasing its first game for the PlayStation 3, a version of the action-puzzle game Portal 2, which will only be sold at retail.

Grammy Preview: The Business of Lady Gaga’s “Born This Way”

Sometimes two days is just too much time to wait. At least that’s the case for Lady Gaga and her new single “Born This Way.” The song had been scheduled for debut at Sunday’s Grammy Awards at the Staples Center in Los Angeles, but earlier this week Gaga tweeted that she “can’t wait any longer” and will release the song today.

Nevertheless, Sunday should be a big day for Gaga. She’s up for six Grammys, trailing only Eminem and Bruno Mars. Although “Born This Way” will be burning up bandwidth all weekend long, the ceremony will mark the first performance of the title track to the diva’s new album, due out in May.

The reaction to “Born This Way” — both the recording and the live version at the Grammys — could have far-reaching business implications for Gaga. If the song is anywhere near as well-received as “Bad Romance” or “Poker Face,” it’s a great omen for the album. And, if the album can replicate the success of The Fame, Gaga could be poised to take her business game to an even higher level in 2011.

By our estimates, Gaga earned $62 million last year, just $1 million behind sixth-ranked Jay-Z among the top-earning musicians. Last month I wrote that she would top $100 million in 2011, a prediction predicated on the success of Born This Way. The reason: another boffo album reception could allow her to make the transition from an arena act playing 20,000-seat venues to an artist capable of selling out 80,000-seat football stadiums.

Gaga’s manager, the savvy Troy Carter, has gone on record saying his goal is to move 30 million units of Born This Way worldwide. That’s a very bold target, more than twice the number of copies sold by Gaga’s debut. But if every one of Gaga’s  28 million Facebook fans (second only to Michael Jackson) buys the album, or buys a few of her songs on iTunes, she’d be pretty close.

In any case, Gaga doesn’t need to sell 30 million copies to lure droves of people to see her perform in concert. As long as Born This Way is reasonably compelling, she’ll have no trouble drawing throngs of “little monsters” to her shows — and stacking up somewhere in the neighborhood of $100 million over the next twelve months.

But she’ll have to start with a knockout performance this weekend. And knowing Gaga, there’s little doubt that she’ll deliver.

Ten Ways to Invest Tax Free

 

For the moment, taxes on portfolios are modest. The federal rate is 15% on most dividends and on long-term capital gains. Come 2013, though, the rates shoot up.

Without a law change, the maximum federal tax on interest, dividends and short-term gains will go to 44.6%. That consists of a 39.6% stated rate, the 1.2% cost of a deduction clawback and a 3.8% surtax to pay for health care. The max for long gains will be 25% (but 23% for assets held for more than five years). Add state taxes to all of these.

What’s an investor to do? Take defensive measures. Here are ten ways to pocket investment income without paying tax on it.

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Set up a kiddie Roth

osha.gov

Did your daughter earn $4,000 last summer that she needs for college? Were you going to leave her at least $4,000 in your will? Start your bequest now. Hand her $4,000 that she can use to fund a Roth IRA. Tell her not to touch it until she is 60.

She’ll get 40 years of tax-free compounding. (At 7% a year, this would turn $4,000 into $60,000.) You’ll get money out of your estate, probably saving on state inheritance taxes.

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Buy an MLP

Master limited partnerships that own energy assets like pipelines tend to pay pretty good dividends (in the neighborhood of 5%). Those dividends, at least initially, are largely sheltered by depreciation deductions. The quarterly cash, that is, is considered a nontaxable “return of capital.”

After a decade or two this tax shelter is exhausted, but if you die owning these shares your heirs get to start the process over with a new, higher tax basis. There’s more on MLP taxation here.

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Go Ugma

Use the Uniform Gift to Minors Act (a.k.a. Uniform Transfers to Minors Act) to set up a brokerage account for your son or daughter. The first $950 of annual income is free of tax; the next $950 is taxed in the kid’s low bracket.

The downside is that at age 18 Junior takes ownership and might not spend the money on college, as you intend. So fund the account modestly­—$30,000 is plenty—and concentrate the holdings on investments that (a) generate a lot of taxable income and (b) are compelling additions to the overall family portfolio. The idea is to make full use of that $1,900-a-year shelter while parting with a small amount of capital.

Here are several examples of investments that make sense in a diversified portfolio and that spew out a lot of ordinary income:

–exchange traded funds that hold a lot of Ginnie Maes and the like (MBB) or the whole bond market (BND).

–the ETF for junk bonds (JNK).

–high-yielding blue chips like Verizon, AT&T and Pfizer.

–preferred stocks.

Two cautions. (1) To avoid gift tax wrinkles, limit each year’s contribution to $26,000 per child ($13,000 if you are single). (2) Don’t set up Ugmas if you think your kid will qualify for college financial aid. Any assets in the kid’s name will be snatched by aid officers.

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Open a 529

A Section 529 plan lets you accumulate investment income tax free, provided the proceeds are used on schooling. Drawback: Sometimes stiff fees erase the income tax saving.

The account is likely to be a good idea where the costs are low (as in Utah) or there’s a break on state income tax for parents chipping money in (as in New York).

As with Ugmas, 529s are not a good idea for families likely to get tuition assistance.

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Own commercial real estate

As long as your building doesn’t have too much of a mortgage, depreciation deductions will make a good chunk of your rental income free of current income tax. There’s more on the economics of these dealshere.

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Own muni bonds

Interest on the general obligations of state and local governments is free of federal income tax. In most states you also get a pass on state income tax for home-state bonds. Caution: Some states are in financial trouble. Check out the Forbes Moocher Ratio before buying.

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Give away stock profits

You put $3,000 into Netflix, wait at least a year, then give away the shares to charity when they’re worth $8,000. You get a deduction for the whole $8,000. Your $5,000 gain is never taxed.

Two other ways to shelter appreciated property from capital gain taxation: leave it in your estate, or give it to a low-bracket relative.

Bequeathed property benefits from a step-up, meaning that gains unrealized by an owner at the time of his death permanently escape income taxation.

Low bracket taxpayers (people who would be in a 25% or lower bracket if all their capital gain were taxed as ordinary income) get a free ride on long-term capital gains. But if the donee is a son or daughter 18 or younger (23 if in school), beware the kiddie tax, which applies to investment income over $1,900 a year.

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Capture losses

When the market is down, swap out of losing positions into similar but not identical ones. For example, you could exit an S&P 500 index fund and immediately buy the Vanguard Megacap Index Fund. In this fashion, you can run up a capital loss carryforward that will make future capital gains tax free. For more on loss harvesting, go here.

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Buy a safe

thesafewarehouse.com

If your $400 investment saves you $45 a year in safe deposit box fees, you’ve got an 11% yield, tax free. The only exception on the tax side would be if you are one of those rare birds in a position to deduct miscellaneous items like the rental on a strongbox to hold your gold coins. Miscellaneous deductions are usable only to the extent they exceed 2% of your adjusted gross income; not many taxpayers get anywhere near this threshold.

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Be a cheapskate investor

Are you paying someone 1.5% a year to have your assets managed? Cut this cost in half by haggling. A dollar saved in this fashion is a dollar earned free of tax, unless you are claiming miscellaneous deductions, which is unlikely.

The Design Matrix: A Powerful Tool For Guiding Client Input

I used to think the beginning of a website design project was the best part. Hopes are high. People are full of great ideas. Nobody is disappointed yet. But as I gained experience, I found that learning about a client’s brand, competitors and customers doesn’t always give clear direction about design goals.

Brand discussions can generate goals like “be modern,” but they don’t necessarily determine how to accomplish those goals. Competitor reviews can devolve into cherry-picking sessions that spawn “frankencomps” rather than provide helpful feedback. And mood boards, which communicate a general feeling, don’t help to articulate or prioritize design goals. With a design matrix, you can guide discussions and establish clear direction.

Hey, You Got Math In My Art…

Sometimes the abstract nature of design is enough to make you envy the people over in accounting, with their definite answers and proven formulas. While the beauty of design is that it transcends the world of definite answers, introducing a little math in the form of design matrices can help you create better websites by providing a clear picture of where the website design is today and where it should go tomorrow.

Design matrices don’t require any serious math skills because they’re based on the coordinate system. Chances are you’ve seen a competitor matrix that ranks brands according to two key attributes on X and Y axes (for example, value could be plotted against profit margin). A design matrix is essentially like acompetitor matrix but ranks the client’s website against competitor websites, and it uses design attributes (“clean” and “warm,” for example) instead of other points of competitive comparison.

A typical competitor matrix ranks brands according to rational factors. (This example, which compares a few car models, was created for illustrative purposes only.)

A design matrix ranks website designs according to design attributes. (This example, which compares airline website designs, was created for illustrative purposes only).

Design matrices are powerful tools for determining the path of the website design process, because: they force you to determine two design attributes to focus on; they build consensus within a team; they guide the clients’ perception of competitors; and, most importantly, they lead to differentiated website designs.

The Art (And Math) Of Building A Design Matrix

Step 1: Gather Information

To build a design matrix, you will need to know the client’s core brand attributes and main competitors. You should also have a broad understanding of what the redesign aims to accomplish (from a design perspective): “the website is cluttered” or “our website is not engaging.” The good news is that information gathering is a normal part of the discovery phase.

A design matrix should not be the only piece of work involved in the discovery phase, but it can replace some other approaches. Creating or documenting a brand’s position and defining the key redesign goals are essential. However, a design matrix could potentially replace mood boards. A mood board is a collage or grid of images that capture the “feel” or “tone” of a brand. They are valuable tools for providing direction to new brands, but they provide a less concrete direction than a design matrix. If the brand is in its nascent form and needs broad high-level direction, then mood boards work well; but if you are working with an established brand or a client who prefers a concrete approach, then a design matrix is the best bet.

Document the brand’s position before creating a design matrix. (For illustrative purposes only.)

Image Spark is a great resource for creating online mood boards—particularly useful if you are working with a company that requires high-level brand definition.

Another common discovery activity that design matrices can replace is the “competitor website review.” Looking at competitors’ websites can generate lively discussion, but too often it either shifts the focus to feature sets instead of design direction, or it becomes a cherry-picking session for disparate design elements from a variety of websites that the designer is somehow supposed to mash together into a single coherent website design.

Create a design matrix that shows the current website in relation to competing websites. This way, you are less likely to get distracted by feature sets or be expected to combine all sorts of design elements. That said, if you are looking for an energizing group activity, competitor reviews can generate more brainstorming than a design matrix. Doing both is an option, but if you do that, then do the matrix after the walk-through of competitors.

Delta Airlines’ website.

United Airlines’ website.

Looking at these individual airline websites, rather than comparing them on a design matrix, can lead to a less design-oriented and more feature-focused conversation.

Step 2: Determine Your X and Y Axes

Narrowing down a design direction to two attributes can be uncomfortable for those of us accustomed to creative briefs that list a litany of brand attributes to guide our design. How often have we heard that a design should be “clean,” “inspiring,” “warm,” “engaging,” “approachable” and “trustworthy”? How do we even accomplish just two of these attributes? And if we must choose only two, how do we decide?

Understand that a design matrix is not intended to limit the final design to two attributes. That would be almost impossible. It is intended to illustrate the two most important attributes for taking the website design to the next level and differentiating it from that of competitors.

To determine your X and Y axes, ask yourself the following questions:

• Of all the brand’s attributes, what will make this client stand out from the crowd? Which design traits reinforce those brand attributes?
• What are the competitor websites’ strengths and weaknesses?
• What does the design need to do better in order to accomplish the website’s goals?

The X and Y axes should not be nearly synonymous (for example, “warm” and “engaging”), nor should they be mutually exclusive (“innovative” and “traditional”). There should be a slight tension between the two attributes.

The airline websites, for example, are ranked according to how “clean” and “personable” their designs are. There is a slight, but not negating, tension between these two attributes. Clean websites can come across as cold if they don’t have a distinctive voice or warm color palette. Personable websites are often less functionally organized. Achieving a high ranking for both attributes is a worthy challenge, and stepping up to that challenge will definitely create a distinctive website.

You might find that you change the labels of your axes as you place the websites on the matrix (see step 3), but the above process should get you pretty close to determining what the final axes should be.

Step 3: Play a Little

You know the competitors. You have a clear idea of what is important, brand- and design-wise. You have determined your x and y axes. It’s time to try some things out.

Place all of the websites on your matrix as you would rank them off the top of your head. As you begin to place them, you will most likely rearrange some as you compare them to others. This is a natural part of the process because the matrix shows relationships as well as individual rankings.

I was influenced by Jet Blue’s overall branding and so originally ranked its website’s personality fairly high. Later, when I compared it to the Delta and Virgin America websites, I revised the ranking.

Design matrices do not have to be limited to ranking competitors. They can also show a client’s website’s position among affinity brands (i.e. brands with a similar “feel” and customer base). Mini USA and Apple, for example, might be considered affinity brands because they both exemplify modern design and appeal to similar customer types.

Step 4: Get Serious

Things will take shape fairly quickly, but there is a final step before declaring your design direction matrix done and dusted. Before sharing the matrix with the client team, make sure you can defend it. Show it to others in your agency and see if they agree with your placement decisions. Ask these key questions:

1. Do my axes represent the two most important design attributes?
2. Can I clearly articulate why I placed each website where I did?
3. Will the redesign be able to get the website to the top-right corner? If not, what is holding it back?

If you answered yes, yes and yes (or yes, yes and yes if we do a certain thing…), then your website design direction matrix is ready to share with the client.

Creating Buy-In With Design Matrices

Everyone loves talking about design, but with everyone talking, we don’t always hear other ideas. If you show a client a design matrix before creating the initial comprehensives, then you will visibly and quantifiably show that you are on the same page; and because of that, you’ll likely be successful in the long run.

The design matrix will clearly show which websites you think best capture the desired attributes and where the current website falls into the mix. It is a tangible foundation for a conversation about design.

Invite the client to participate actively in this stage of the design process. Clients usually want to feel like they have had direct input in the design, and designers always prefer that the input comes sooner in a high-level, directional form (“The design feels cold”), rather than later in an overly specific form (“Make that element blue”).

Discuss the following questions:

• Does the matrix address the two most important design attributes?
• Do we all agree on the placement of competing and/or affinity brands?
• Do we all agree on the placement of the client’s brand?
• If we end up in the top-right corner, are we where we want to be?

Using a design matrix can be risky, mainly for one reason. Some clients have difficulty prioritizing the two most important design elements, and then they dig their heels in and declare that there are in fact four equally important elements. Hopefully, the matrix demonstrates how your choice of attributes distinguishes the website. If you meet with a lot of resistance, just create two matrices or conduct a competitor review (as discussed in step one).

Be prepared to explain your rationale and defend your position — but also be open to suggestions. Maybe there are good reasons to focus on different attributes, or maybe the team feels that the placements of some website are not quite right. Revising a design matrix is much easier than revising a design.

Truly Going The Distance

Creating a design matrix is a great first step, and getting client feedback is an awesome second step, but the most important step is to use the matrix as a resource as you design and when you present your designs to the client.

Ultimately, the purpose of a design matrix is to move a website design in the right direction. Specifically, move it to that space in the upper-right corner that represents the best of both worlds. As you design, continually refer to the matrix and see where your new iterations might fall on it.

Think about these questions as you design, and take notes for upcoming presentations:

• Do the new iterations embody the key attributes?
• Are they better than the competing and affinity brands?
• How do they accomplish the design goals?

When presenting designs to a client, review key findings and recommendations made during the discovery phase. Before presenting your designs, review the matrix with the client, and revisit the matrix at the end of the presentation to show that progress has been made.

Training Wheels: A Step-By-Step Overview Of A Design Matrix For Cannondale

The following walk-through illustrates the design matrix process in its entirety and addresses the kinds of decisions that need to be made when creating a matrix. The exercise below is entirely theoretical. I do not work, nor have I ever worked, for any major bicycle manufacturer, including Cannondale. Thoughts about what design attributes Cannondale might strive for are purely my opinion. Thoughts about competing website design attributes are informed by looking at their websites and general industry expertise — just as yours will be.

How would you create a design matrix for Cannondale? (This example is purely illustrative.)

Step 1: Understand

For the purposes of this exercise, let’s assume that Cannondale has chosen you to redesign its website. Your first step will be to understand its brand, its competition and the desired attributes of its new website. Let’s also assume that you left the initial discovery meeting with this information:

• Cannondale’s key competitors are Trek, Giant, Diamondback and Fuji.
• Its brand is about performance, innovation and a superior craftsmanship that inspires riders.

When you ask about the desired design attributes, Cannondale’s representatives say the website should capture the sense of elation that comes with a successful bike ride. They also want the website to showcase technical innovation, dedication to quality and devotion to the individual rider. Your notes read, “inspiring, innovative, technical, individual, quality.”

Step 2: Determine Your Axes

The X and Y axes reflect the client’s most important and desired design attributes, but do look at competing websites before naming the axes; they will inform your direction and give you ideas about what would be distinctive.

Upon viewing the competitor websites, I found both Trek’s and Fuji’s to be “immersive” and “powerful,” with clean, bold imagery. Fuji’s was slightly colder and more “technical.” Diamondback has an inspiring home page, but the website loses steam and doesn’t showcase the individual bikes distinctively. Giant has a strong focus on teams and individual riders and helpful bike selection tools, but the design is flat.

So, how does all of this play into naming the axes and creating the matrix? Going back to your note about desired design attributes, we see that Cannondale wants to showcase technical innovation, which Trek and Fuji do well on their websites; Cannondale wants to inspire, which Trek and Fuji do through immersive imagery; unlike Giant, though, Cannondale doesn’t want to focus on racing.

At first, it may seem that “inspiring” and “innovative” would be good axes names, but those attributes don’t have quite enough tension. They are not synonyms, but there is no balance either. “Inspiring” and “quality” may come to mind, but “quality” is not a design attribute; it’s something the client wants to showcase (it’s an attribute of the product, not the design).

I chose “inspiring” and “technical” for the desired design attributes. “Inspiring” works because the client wants to inspire riders. “Technical” is a good second attribute because it captures innovation and product quality while striking a balance with “inspiring.” There is a healthy tension between the two words. Capturing both emotion and technical detail is difficult. Accomplish that balance and you’ll leave the competition in the dust.

Step 3: Place Websites on the Matrix

I always start by plotting all of the websites roughly where I think they fall on the matrix, and then I move them around as I consider the relationships between the websites.

I originally placed Cannondale’s website in the lower-left corner but, as I compared it to the other websites, I realized that it’s actually more technically focused than others, including Diamondback and Giant. That said, the Trek and Fuji websites are still more technical, with their bold product showcases and detailed imagery.

Inspiration-wise, the current Cannondale website seems to be on par with Giant’s: there is imagery of bikers, but it feels flat and diminutive.  Diamondback’s immersive home page raises it a bit above the others. Trek’s warmth and voice put it in the lead for inspiration. I originally had Trek in the upper-right, but I ultimately decided that Fuji’s website has a more technical feel to it.

The final matrix (below) is informative on many levels. It shows where Cannondale currently is and where the websites are that it needs to surpass in order to get to where we determined it needs to go. Naturally, the final design will have a unique flavor, but looking at the competing designs will partlyuncover how to get there.

A design matrix informs the path of the design process.

Step 4: Consensus

This is a purely illustrative example, so I did not show this to a team (or the client) for feedback. Typically, feedback focuses on the desired design attributes (“Is this where we want to go?”) and the placement of all of the websites on the matrix. The most important thing is to agree on direction, of course, and then to determine the goal. The hard part is to design a website that gets there.

Step 5 (the Big One): Using It

The last step is not so much a step as a big stride. Once you’ve created the matrix, the important part comes: using it to create a better website. Make a copy for everyone involved in the project (including those in other disciplines) and have them put it up somewhere to serve as a daily reminder and motivator.

Refer to the matrix as you design. Are the decisions you are making moving you toward the upper-right? For example, if you were choosing images for the Cannondale website, ask yourself relevant questions:

• Is this image inspirational?
• Does it convey the technical expertise of Cannondale?
• How can the design be more inspiring?
• How can I better convey the technical passion of the brand?

As mentioned, revisiting the matrix when showing comps to the client will help justify your approach, but the real reason to create a matrix isn’t to sell comps or do a fun exercise during discovery; rather, it is to remind us of the path we are on. We could take so many directions, and going down a road that looks good but doesn’t take you where you want to be is all too easy.

Think of your design matrix as a compass. It’s not as precise (or cold) as a GPS; it’s an old pocket compass that wobbles a bit as you walk but still gets you to the summit.

Do’s And Don’ts

The beauty of design matrices is that they provide a new way to look at competitors and a tangible foundation on which to begin discussions with clients. They also enable you to play a little as you tweak the axes’ names and the websites’ placement to get them just right. There is wiggle room in the methodology and application, so have fun with it. That said, there are a few set guidelines worth adhering to for success:

• Don’t be afraid to experiment.
• Do get your ducks in a row. Verify the desired design attributes and the competitor and affinity brands with a client before proceeding, so that the matrix is relevant.
• Don’t base your insights on home pages alone. A website’s design is more than the home page. Your matrix might use a home page screenshot, but include it only if it represents the overall design of the website.
• Do share your toys. Get team input about the placement of websites on the matrix. It’s not an altogether scientific approach, but be as objective as possible.
• Don’t carve it in stone. Be open to recommendations from clients. Changing a matrix is easier than changing a comp.
• Do use it to sell your work. Present the matrix as part of your comp presentation in order to explain your rationale and sell your comps.
• Don’t matrix and run. Don’t abandon the matrix after the discovery process. Refer to it regularly.

Enjoy the process of creating a matrix and of seeing opportunities to design a distinctive website for your client.

Best Car Insurance Companies

 

Knowing you have selected a good car insurance company is peace of mind you will want to have before you get in an accident, have your car stolen, or encounter any number of situations that involve you having to make a claim. You don't want to find out too late that your car insurance provider isn't up to par.

This list contains the top 3 best auto insurance companies based on affordability, value of services, and responsiveness. Because, after all, what good is having a rock bottom rate if you don't get enough in return or can't get the help you need when you need it.

Geico

“I love GEICO, they have EXCELLENT customer service!!! They are always great, they’re always so personal, they are always there to help all day and night and weekends and you don’t have to worry about someone being on vacation or sick because there’s always more and great agents there to help. Plus they work with other outside companies and you can get discounts other places just for being with them. I just wanted to say I think GEICO is worth calling and getting a quote if you don’t already have a policy.”

“I love Geico. I’ve tried them all in this one is the best for sure! Go Geico! My only real issue with them is they are a call center which means no local agents like state farm which also equals less small biz development for the community but as far as a provider they’re awesome!”

“Switched from Allstate after 24 1/2 year and Saved $600.00 every 6 months. Was paying $1298 and now $698. 10 and now I’m switching home insurance also. Thank You GEICO for SAVING me $1200 a year on my AUTO.”

 

Esurance

 

 

“I was tired of my insurance payments going up and up and up, so thought it was time to start shopping for new insurance. I had tried over the Internet before but hadn’t a clue what I was doing, so I just gave up. I had my previous insurance elsewhere and came to find out I was paying way, way too much. I am saving $750. 00 a year by switching to Esurance! I could not believe it! I immediately started the process of switching, and I am now a new Esurance customer and a very happy one! Today, I received my policy and cards via email just as promised and am glad I switched!”

“This is a good one, I had tried many but this is best.”

“Great prices compared to everyone else.”

Allstate

“Immediate accident forgiveness and real agents-not lizards nor 800 numbers.”

“I received a quote within minutes online and it was much lower than Geico, Progressive, State Farm, Nationwide and Safeco auto insurance companies. With the promise to keep me insured with their "no insurance hike up when getting into an accident", I will definitely continue to be an Allstate customer. I believe that I am in better hands than all the rest.”

“Allstate is the best!”

Eminem’s Super Bowl Ad For Chrysler Had CEO Worried

The most memorable ad during Sunday’s Super Bowl — Chrysler’s two-minute spot featuring rap star Eminem — was a gut-wrenching decision for the carmaker’s chief executive Sergio Marchionne.

“This was not an easy choice…apart from the money involved…and this is pretty expensive stuff, but you know, the choice of the topic, the choice of the characters in the thing were not easy choices. I had to think about this really long and hard,” Marchionne said. Why? I asked him. “You know, I love Eminem but …I also know that some of the choices of language that he has made are things that are not what I would consider to be commonly shared,” he said, trying to be delicate about the rapper’s hard-core lyrics and profanity.

 

Eminem’s Super Bowl Ad For Chrysler

But the Italian-born Marchionne, who grew up in Canada and spent two years living across the river from Detroit, in Windsor, Ontario (Canada’s car capital), understands the gritty determination of the Motor City better than any politician in Washington or talk show host in Los Angeles or New York. The ad, he believes, addresses the lingering prejudices against domestic cars and the companies that produce them. “A lot of people are underestimating what happened here,” he said, a reference to the hell-and-back bankruptcy and restructuring of the U.S. auto industry. “The great thing about this country, it has the ability to learn.”

Eminem, one of Detroit’s most famous residents, gets it, Marchionne said. “He represents part of America that I think is important as hell. I think it’s at the heart of what we are.” OK, not everyone likes the rapper’s music, Marchionne conceded, “but a lot of what he is is us, you know? I mean there’s sort of a seriousness about that kid that is – I call him a kid. I mean, he’s not a kid anymore – which is true of us. The fact that we’re coming out of nowhere, right? …A lot of people last year asked us, you know, are you still going to be here in 12 months? The only thing that held back the execution squad from shooting Chrysler was me.”

And so Marchionne, whose Fiat Autos stepped in to run Chrysler after it emerged from bankruptcy in 2009, decided to tell the world, on the biggest night of television, that Chrysler is not only still alive, but proudly turning itself around. In the past year, Chrysler has introduced 16 new or significantly upgraded vehicles that have managed to turn the minds of even the toughest automotive reviewers, many of whom have said they are surprised at how much Chrysler vehicles have improved in such a short time.

Marchionne kept the contents of the ad a secret even from his own management team until a meeting last Monday when he showed it to them in the conference room across the hall from his office, where a framed Dodge poster offers the rallying cry, “Give a shit.” Some of his execs were almost moved to tears, he said. “I think we blew them away. I don’t think that anybody expected this.”

The spot by Wieden+Kennedy is the first two-minute Super Bowl commercial in history, which is notable in itself. But aside from the cute Darth Vader kid in the Volkswagen ad, nothing from the eight other car brands (or from Bridgestone, CarMax or cars.com, for that matter) who advertised during the big game could touch Chrysler’s goosebump-inducing message.

The ad shows gritty, everyday pictures of Detroit and Detroiters, as the voiceover says: “I got a question for you. What does this city know about luxury, huh? What does a town that’s been to hell and back know about the finer things in life? Well I’ll tell ya, more than most. You see, it’s the hottest fires that make the hardest steel. Add hard work and conviction and a know-how that runs generations deep in every last one of us. That’s who we are. That’s our story. Now it’s probably not the one you been reading in the papers. The one written by folks who’ve never even been here, and don’t know what we’re capable of. Because when it comes to luxury it’s as much about where it’s from as who it’s for. Now we’re from America. But this isn’t New York City. Or the Windy City. Or Sin City. And we’re certainly no one’s Emerald City.” At that point, Eminem drives up  in front of Detroit’s historic Fox Theatre in a new Chrysler 200. Inside, he walks on stage where a gospel choir is singing, and then turns to the camera with that serious, almost angry look of his and says, “This is the Motor City. This is what we do.” It’s followed by Chrysler’s new tagline, “Imported from Detroit.”

Chrysler’s marketing chief Olivier Francois, says the new tagline was intended to convey the message that you don’t have to cross an ocean to obtain luxury; it’s available right here. The brand chose Eminem and his song “Lose Yourself,”  Francois says, “because the lyrics tell us we all have the ability to do anything we set our mind to and that failure is not an option.” At Chrysler, he said, failure is not an option.

I got a sneak peek of the ad a week ago when I sat down with Marchionne to talk about the progress Chrysler is making and the difficult challenges that still lie ahead. In the middle of our conversation, he stopped and swore me to secrecy–it turns out Eminem hadn’t approved the ad yet. Then he pulled a USB flash drive out of his jeans pocket and plugged it into the laptop on the conference room table. With a few keystrokes, he projected the ad on the giant screen at the far end of the room. Other than Chrysler’s management team, which had seen it for the first time a few hours earlier that day, I was the first person to view it.

I, too, was blown away by the imagery and the message. As a transplanted East Coaster who made Detroit my adopted hometown 25 years ago, I can say with confidence: This is exactly how Detroiters feel. And since its airing during Sunday night’s game, it’s the only thing people in Detroit are talking about today.

What about outside Detroit? Will it change any of the negative perceptions about domestic cars or erase any of the hostility toward Chrysler and General Motors after their taxpayer bailouts? That remains to be seen. If so, I think GM ought to pay royalties to Chrysler.

But here’s my biggest problem with the ad: It chose to highlight the new Chrysler 200 in an ad that talks about the perception of luxury. The Chrysler 200 is a replacement for the Chrysler Sebring, a car that never was and (even with a new name) never will be mistaken for a luxury car. Priced at $20,000 to $25,000, it competes in the thick of one of the most cutthroat segments of the market: mid-sized sedans. At least now, with the vast improvements to the car, including a new interior, engine and suspension, it can get in the game.

Perhaps Chrysler knew it would be a stretch for people to consider the 200 a luxury car. Maybe all the company can hope for is that Americans stop trash-talking their own country’s cars. That must be why it’s including this line in other ads: “A car you don’t have to own to be proud of.”

Selling pride is fine. But if Chrysler is going to survive, it has to sell cars.

How to find the perfect startup job

Discussions about startups often focus on founders or investors, but most people in the startup game are regular employees. So how do you find a startup job?

"I want to work for a startup." It's a common statement, but a "startup" can be very different things. The primary dimension on which startups differ is stage: Two guys in a garage is definitely a startup. So is a 30-person company growing with a second round of financing, and so is a 250-person company preparing for an IPO.

The first decision, and the most critical decision, of what type of startup to join is based on the current stage of the company.  This selection is the most personal and subjective one, as it's based on a person's motivations for why they want to be a part of a startup in the first place (as opposed to just getting a job at xyz company) -- desire to make an impact, better working in smaller teams, excitement to be involved with cutting-edge technology, aspirations of becoming a founder and/or a startup CEO, working with other motivated people, long-term financial upside, etc.  But this juncture is also where I see people make a critical mistake.

The biggest mistake I see is people going to Series A or B funded startups because they perceive it as "safe" with VC backing, but the only thing *temporarily* derisked is financing. And that derisking is only for 12+/-6 months.  Yet the company hasn't figured out its product-market fit, hasn't figured out its customer proposition, doesn't have revenue… it doesn't have traction.

As an employee joining, you bear (nearly) all the risk as the founders but an order of magnitude less in compensation, recognition, and influence.

I believe that there are three opportune times to join a startup:

1. As early as possible (or as early as you can stomach).
2. When the train has already left the station.
3. When there is a truly unique ability to learn, collaborate with specific people, or work in a special situation.

As early as you can stomach. For some, the proverbial two-guys-in-a-garage-stage is the ultimate allure… but they're not ready just yet to be one of those couple founders. Push yourself hard to ask why am I not a founder now?  If the reason is the need for an initial idea, a specific skillset, time to develop a potential customer network, etc., then the right answer is to find a role and company which fits that description so that after a few short years you're ready… usually that's not a seed-stage startup. If the reason is that you haven't done it before but just want to learn the playbook, then by all means joining an extremely embryonic team is the right next step. Of course many people have current income requirements that the earliest-stage team can't satisfy; hence, reality does dictate that this rule is amended from "as early as possible" to as "early as you can stomach."

But if you're stomach feels queasy reading any of the above, it really makes sense to jump ahead to a much later stage startup where the…

Train has left the station. What I mean is that the startup is already on track, generating real revenue, rapidly growing (and hiring), and is clearly destined to be some type of success. It's unclear if it's going to be either a "win" or a "monster win," but a reasonable outcome is reasonably assured. In other words, the train has left the station heading towards a destination and will get there if you're on board or not. Of course you're going to make an impact (that's one reason why you're joining a startup after all), but the company is already moving forward with its own inertia.

If you aren't ready to be a founder soon, this point is the best place to join a startup. Yes, it's larger and doesn't have the same feel as "those early days," but the benefits of joining this profile company are numerous:

1. Learning – you'll be in the pole position to see how a successful startup ticks.
2. Reasonable exit in a visible time-horizon with some financial payoff– With an outcome probable, there's a likelihood of a nice payday (though certainly not a life-changing one).
3. Instant association with success – Unless you're a founder, people rarely remember when in its lifecycle you joined a company… just that you were there.  If this company is already perceived as a success – bing! – now so are you.
4. Startup credibility – You'll earn startup credibility chops even though you weren't there from the beginning.
5. After successful exit people will leave to start own startup – Post-exit is most often when the magic of new company formation happens. Employees take their newly-created financial assets, their domain credibility, and their uniquely acquired knowledge to start new companies.  This is the perfect time to have a unique opportunity.

Even though it is a smart strategy to join later in the game, realize that you miss out on acquiring some startup founder skills (searching for a repeatable model, the emotional roller coaster, etc.). But if a founding role isn't your plan, there are some people who are just better suited to the scaling-stage of a startup -- and that's a great thing.  These are people who are probably never going to be founders, but make great VPs of engineering and marketing, etc for late-stage companies… and they do it successfully again and again.

Learn and work with people or in a special situation.  Going extremely early or very late is the right approach 90% of the time.  The exception to the rule is just that -- when there is an exceptional opportunity at the in-between. There are situations where you have opportunity to work with someone renowned in industry. Or you have a special skillset that would apply to your role.

The last reason to join a mid-stage startup, and the most compelling one, is that given your prior experience you have a unique perspective to recognize that the company has been or will be de-risked in some way that hasn't fully been realized yet. It's easy to craft a story to cite one of the above cases is present, but the true test is convincing yourself that it's true.

Regardless of what stage startup you join, the choice should be just that --something which you chose, a deliberate selection based on criteria that you're optimizing around and the potential of upside, not a perception about safety. You should be joining a startup because of your excitement about the role or situation, the company itself and the opportunities ahead with the chance to change the world, not as a hedging strategy.

David Beisel is a venture capitalist focused on the digital media space. He currently serves as a co-founding partner at NextView Ventures, and previously worked with both Venrock and Masthead Venture Partners. This post originally appeared on his blog, where it's the first of a 4-part series.

By David Beisel, contributor

Kate Middleton Engagement Ring Spurs Sapphire Sales

The Persians believed the Earth stood on it, God supposedly carved those ten commandments into tablets of it and now Kate Middleton is sporting it on her ring finger. Meet the blue sapphire, gemstone of choice for biblical kings and the late Princess Diana, now de rigueur among legions of royal admirers and, more recently, high-end jewelers.

Nearly three months after the announcement of Middleton’s engagementto Prince William, the flood of commoners wanting in on the fairytale still has purveyors of the cornflower blue sparklers scrambling to keep up.

“November was a record month by far, December was a record month by far, January, still a record month by far,” said Michael Arnstein, president of the Natural Sapphire Company and loose gem vendor to the likes of Cartier and Tiffany & Co. The online sapphire retailer, which sees $5-10 million in annual revenue, has Kate Middleton’s 18-carat Garrard rock to thank for the 300% increase in sales.“[She’s] a walking, talking fashion advertisement for the gemstone,” said Arnstein.

Sapphire mania appears to have penetrated all sectors of sapphire retail, low and high. Mark Aaron, Tiffany vice president of investor relations, confirms improved sales of blue sapphire rings, especially in Europe.

Sapphires are widely thought to be much rarer than diamonds. They command an estimated $800 million of the gemstone retail market according to Gemological Institute of America Senior Analyst, Russell Shor, citing a 2007 mining company study. This figure includes non-blue sapphires (the gemstone comes in all colors but red; a red sample would be called a ruby).

Unlike diamonds and gold, there is no widely-accepted price list that sets sapphire values, which makes for tricky investment planning. While he forecasts a bullish sapphire market, John Tolliver, president of Simply Sapphires, cautions against stockpiling the blue stunners unless you can afford to go big–really big.

If you’re looking for almost guaranteed ROI, Tolliver recommends shelling out for quality sapphires over 10 carats, Kashmir sapphires or an untreated sapphire–if you can get your hands on one, that is. More than 90% of sapphires on the market have received some form of processing treatment, making untreated specimens extremely rare and valuable.

As for the Kashmir lot, whose name is derived from its renowned Indian mine provenance, expect to pay a king’s ransom. In April 2007, an unnamed 22.66 carat Kashmir sapphire, once owned by railroad magnate, James J. Hill, sold at Christie’s for $3,064,000, the highest amount ever paid for a sapphire.

by Jane Lee

CARAT CAKE

Why Microsoft Will Win The Small Business Cloud War

We’ve been reading about the war of the cloud.  We’ve seen how big companies likeGoogle and Appleand IBM are offering their services and applications online, changing the way people use technology. We’ve watched how smaller companies, like Salesforce.com and Facebook andGroupon have turned themselves into giants by (literally) starting new cloud based industries.  We barf every time we watch those idiots on the Microsoft commercial who forgot to program their TV and are able to do it from the airport by going “to the cloud.”

And yet…you know who’s going to win the small business war of the cloud?  Microsoft.  Want proof?  All you have to do is visit Paducah, Kentucky.

Paducah (population approximately 30,000) is located about two hours from Nashville and three hours from Memphis, St. Louis and Louisville.  The city was founded in 1815, occupied by Union forces throughout most of the Civil War and had a major flood in 1937.  The town is known for its annual telethon (Betty White appeared there in 1959) and is one of only two cities named in the famous song “Hooray for Hollywood”.  Former MLB player Terry Shumpert was born there.  Dippin’ Dots, the candy maker, is headquartered there.  And so is Bradshaw & Weil.

That’s where Jared Morgan works.   His family bought the 144 year old insurance agency in 1994 and Jared began working there after college.  And, other than a two year stint in a youth ministry, that’s where Jared’s always worked.  And the Paducah area is where he’s always lived.  He married his high school girlfriend.

Bradshaw & Weill has eight employees, each averaging about twenty five years of experience.  One employee has been with the agency over fifty years.  Jared, at 29, is the youngster.  The company is “light years behind in technology,” he says.  “The smallest of changes can make things very difficult for our people.”

Jared’s being humble.  His company isn’t light years behind in technology.  In fact, little Bradshaw & Weil, compared to most other small businesses from San Francisco to New York, is a technology leader.  For the past few years they’ve been using Microsoft’s Business Productivity Online Suite, or BPOS, for their email and document sharing.  In Paducah, Kentucky for God’s sake!

Quietly, Microsoft is adding more and more of its key applications to the cloud.  If you visit their online productivity site you’ll find a bunch of their products offered, like Exchange Online for email and calendaring, SharePoint Online for portals and document sharing, Office Communications Online for communications, Live Meeting for web and video conferencing, Dynamics CRM for customer relationship management and Windows InTune for PC management.

The cost is pretty low.  For example, just renting Exchange costs $5.00 per month per user.  Or if you prefer to host your SharePoint system that costs $5.25 per month per user.  However, the biggest value is to sign up for BPOS.  That costs a total of $10.00 per month per user and includes Exchange, SharePoint plus Office Communications and Live Meeting too.

Of course something’s still missing here.  BPOS doesn’t include any of the standard Microsoft Office products we’re used to using every day like Word, Excel, Outlook, Access and Powerpoint.  Those applications will be available online, according to Microsoft, in 2011 when the company releases its Office 365 hosted services which is currently still in beta.  That’s going to be another thing I’ll write about when the time comes.

BPOS contains the features you’d expect to find in any 2011 cloud based offering.  The security, the uptime, the storage, the quick deployment and the online and mobile accessibility.  This is what the cloud’s all about.

And it’s not like there isn’t good competition out there.  Google offers its own email hosting, document sharing and voice/communication services (but not meetings).  Zoho offers a great suite of hosted small business applications.  Box.net is an excellent alternative to SharePoint.  Citrix Online has products for hosting meetings and webinars.   But let’s get back to Paducah.  And Jared.

Jared appreciated the benefits of going to the cloud.  He saw the potential time and cost savings of using someone else’s servers to host his applications rather than do it himself.  Being in his 20’s he was more comfortable with technology than others in the firm and had the confidence to move things to the cloud with little argument from senior management.

And he tried other cloud services, particular a few offered by Google, who currently hosts the company’s website.  But he ultimately decided on BPOS – particularly Exchange and SharePoint.  Was it for the features?  He says he loves the way Outlook works so easily with Exchange.  And, with SharePoint, he’s helped others create shared files that document the firm’s processes for servicing certain clients, scheduling reminders and following up on renewals.  But I’m not convinced that Jared is doing anything with Microsoft’s BPOS that he couldn’t be doing with other cloud based services.

Which is why Microsoft is going to win the war of the cloud.  Look, I’m not the world’s biggest Microsoft fan.  Yes, my company sells one of their products.  But I’ve been brought to tears too many times to mention by Windows freeze-ups.  I’ve watched my nails grow in front of my eyes while waiting for my computer to startup (or shutdown).  I show advanced symptoms of Parkinson’s every time I have to pay for an Office upgrade.

The cloud up until now was mostly about consumers.  Cool apps for their mobile devices.  Neat new ways to schedule parties and share pictures.  Great websites for storing videos, talking to your friends and finding that perfect new car.

But now the story is changing.  Microsoft is moving into the cloud.  In a big way. And the company, along with its thousands of partners, will bring with it hundreds of millions of users at its small and medium sized business customers.  Like Bradshaw & Weill.  And this is why Microsoft is going to win the cloud war.

Because the battle won’t be won over products and features and cool apps and gizmos.  People, especially small business people, are going to be asked to make a choice very soon.  The choice will be about companies and services and who we’re going to trust with our data and our business applications.  Small business people are nervous about this.   Our data is our livelihood and losing it can put us out of business.  We’re not going to trust it to just anyone.

Whatever people say about Microsoft, we know them and for the most part we trust them.  We’ve been using their applications for decades.  We’re comfortable with the look and feel of their products.  Most of the small businesses around today have survived and prospered in part because of the technology they’ve used that runs on Microsoft platforms.  And even new entrepreneurs are going to have a close look at their offerings.  Sure, we’ve been frustrated with technical issues and problems with their products.  But we know that these problems are more technology related, not company related.  We know that products from Google, Apple and others like them also come with their technical headaches.

Of course, Microsoft could screw it up.  They could make lousy products.  They could fall down on support.  They could fall behind in the technology.  And just because they have a history of getting into the market late and then crushing their competitors (like WordPerfect, Lotus, Netscape) it doesn’t mean their current management will be able to do that again.   

But they do have a clear advantage:  their products are used and liked by millions of small business people around the world.  We don’t want to change.  We don’t want to learn new products to do the same things we’re already doing.  We just want to do things quicker and better.  As long as Microsoft makes it easy for us to adapt to the cloud we’ll go along with them.

And as long as Microsoft keeps winning over companies from towns like Paducah Kentucky they’re going to win the small business cloud war.

Gene Marks is a small business owner, author and columnist.  He can be reached at www.twitter.com/genemarks or atwww.quickerbetterwiser.com.

Retirement Catch-Up: How To Start In Your 50s

You have no savings, but you've got a job. Don't panic. Here's what you need to do now.

In Pictures: Retirement Planning For Late-Starters

OK, you're in your 50s and still have a job--maybe even a decent one--but the amount of savings you've put away for retirement is squat. Zippo. Nada. Is there any way you can avoid an impoverished old age or working until you drop?

The answer, fortunately, is yes. Even those getting a tardy start in thinking about retirement can take advantage of tax breaks and other moves to make up significant ground. This may require substantial changes in one's lifestyle now, but they're almost certain to be less painful than what might be required in 10 or 20 years if you don't start now.

"It's not too late unless you think it is," says Andrew Hudick, a financial planner in Roanoke, Va., who regularly sees clients needing to play retirement catch-up.

The most important first step to take is to start saving. Now. Even if you haven't yet worked out any kind of a plan; that can come later. But you're still going to need the money.

We're not talking about the kind of piddling savings that comes from giving up your twice-a-week Starbucks  Venti Latte. Instead, you need to start saving a good 10% of gross income or even more. There essentially are two ways to save. One is to pay down high-interest-rate debt that isn't already tax-deductible--especially credit cards. If you're paying 20% on credit card debt, in effect you get an immediate 20% return for every dollar you pay off.

The other way, of course, is to put funds away. This is where the tax code comes in. Take full advantage of your company's401(k) plan in which contributions are excluded from your current year's income. It's nice but not crucial if the employer matches part of the contributions. In a 25% bracket, a $10,000 contribution by you reduces your taxes by $2,500. Federal law allows workers who will be 50 by the end of the year to salt away up to $22,000 of their own contributions, pre-tax, for 2010. Investments in such retirement funds grow tax-deferred until they are withdrawn, at which time they are taxed at ordinary rates. While tax rates may go up overall, your own rate is likely to be lower in retirement, particularly given the late start you're getting on savings.

If your employer doesn't have a 401(k), open an individual retirement account at a mutual fund company or brokerage. Those who don't have any employer pension plan can put away up to $6,000 pre-tax a year. If you do have a current employer pension plan, no matter how crummy, then you can only deduct the full contribution if your modified adjusted gross income is $89,000 or less for a couple, or $55,000 or less for a single. But you can make a $6,000 per person nondeductible contribution to a Roth IRA with modified adjusted gross income of up to $166,000 per couple and up to $105,000 for a single. (A Roth grows tax free, and all withdrawals in retirement are tax free.)

You can also fund tax-advantaged retirement savings with income from a second job or side business--a good thing to build up now, since you'll want to continue earning something in retirement. Say you're making $5,000 a year selling hand-made jewelry on eBay. You may be able to put it all away pretax in a Simple IRA or other special savings plan for the self-employer. How should you invest your retirement funds? Most 401(k) plans have a number of mutual-fund options, and money in an IRA can be invested almost anywhere. Due to the continued volatility of stock markets, Hudick recommends for starters low-cost bond funds, in which the chance of a loss of principal is minimal. The last thing you want is to see the disappearance of 20% of your portfolio in the next stock market bust. As your nest egg grows larger, you'll want to look more closely at what percent you want to invest in equities--preferably low-cost index mutual funds.

Perhaps the biggest problem in starting a retirement plan later in life is the loss of a prior significant period of time over which earlier investments could have compounded and grown. At a 5% rate, an investment doubles in 15 years; at 4%, in 18 years. But even if you're in your 50s, you can still take advantage of the magic of compounded returns. That's because--actuarially, anyway--your retirement is likely to run upwards of 20 years. That's a long-enough period for investments you put away today to bear fruit.

As you get the savings going, you should figure out where you stand financially and what you'll need. Even if you aren't the sort to track every nickel spent on Intuit's  Quicken, it's not hard to draw up a family net worth statement listing all assets and liabilities, and an income statement showing income and expenses over the last year. Data on your latest tax return can help.

There are all kinds of rules of thumb about what level of your current net income you'll need to sustain yourself in retirement, generally ranging from 60% to 80% to even more. But if you're new to retirement savings, don't be paralyzed because you won't reach those goals. Simply do the best you can and keep in mind that you're not starting from zero.

For example, even if your current employer doesn't offer a traditional defined benefit pension plan--one that pays a set amount each month--you may well have earned a monthly stipend from a previous job. This is a good time to paw through your old files and find records of any pensions from ex-employers you may be entitled to.

Even more significant is Social Security, which replaces 42% of the salary of a median wage earner who retires at the "full" or "normal" retirement age--66 for those who were born between 1943 and 1954. Replacement rates are higher than that for low-wage workers and lower for high earners. Plus, the replacement rate is higher for one earner couples, when spousal benefits are factored in.

Every dollar that comes from Social Security is one less dollar you otherwise have to provide for. You can get online an official estimate of your benefits from Social Security. Given the federal deficit, younger folks might rightly worry they won't get what they're promised from Social Security. But those 55 and over are unlikely to be nicked too much by any Social Security changes, unless they have a fairly high income.

You can start drawing early retirement benefits from Social Security at age 62, but it pays to wait, especially if you continue working past that age, and is crucial if you've begun saving late. Delaying the start of Social Security benefits until age 70 can boost the monthly payout by as much as 80%.Here comes the tough-love part. If you seem to have no money left over at the end of the month to put away one way or the other and you don't want to get a second job or work longer, you're going to have to reduce your style of living. It's as simple as that. Sure, there's a lot of nickel-and-dime stuff many people can do--eat out less, buy used cars and so on. But you'll have to tackle the big stuff. Consider downsizing to a smaller, cheaper and less-expensive-to-operate house or even renting an apartment. (The first $500,000 of any gains on a principal residence sold by a couple is tax free, meaning more to invest now.) Even more dramatically, ponder relocating in retirement to an area with a significantly lower cost of living. Tell the grown children still living at home they're going to have to start fending for themselves.

It doesn't take a lot to start building that nest egg. In a tax-deferred account and figuring a 4% annual return (compounded monthly), putting away just $500 a month would produce $74,000 in 10 years. That may not seem like much. But at current rates, for a couple that would be 68 years old then, that sum would buy an immediate annuity paying out $433 a month until both spouses are dead.

How To Start Building Your Nest Egg

It's never too early to start planning your retirement--or to learn from your parents' mistakes.

Visions of retirement vary from one generation to the next. For your grandparents, perhaps it was a fat pension and a Florida condo. For your parents, it might have been cashing out a 401(k) to buy an apartment in a trendy urban center.

For you, it may seem there's no choice but to work until age 85. But even though the Great Recession has devastated defined benefit pension plans and slashed the value of savings in self-directed retirement funds, you still stand a good chance of enjoying a retirement that's even more prosperous than those of your forefathers. Step One: Don't be deterred by their mistakes and misfortunes.

"Don't worry about what happened to your parents' retirement fund," says Mary Malgoire, president of The Family Firm, a financial advisory in Bethesda, Md. "You should get out there and put your money into growth."

Your initial step in planning for retirement should be to take advantage of all the available opportunities to receive free money. There are more than you might think. If you open a retirement account through your job, for example, your employer may match some or all of your contributions. A good target is to put away 15% of your gross income. Most employers cap the amounts they will match, so at minimum, try to contribute enough to receive the full employer match.

"Would I rather be in something that earns 20% a year or 5% a year? Obviously 20%," says Malgoire. "And that's what you get with employer match. It's free money."

With that free money, a young investor should build a portfolio heavy on mutual funds, index funds and stocks, but light on bonds. How light? Vanguard founder John Bogle suggests a simple rule: The percentage of your portfolio made up by bonds should correspond roughly to your age. So a 33-year-old would keep one-third of his or her savings in bonds and the rest in equities. Many retirement planners like this guideline, but warn against relying on it too heavily.

"It's a good starting point or rule of thumb," says Dan Maul of Retirement Planning Associates in Kirkland, Wash. "But people need to know they can fine-tune those rules at any point. If you want to be aggressive, you could allocate [a percentage equal to] your age minus 20 to bonds."

Make low-cost index mutual funds or exchange-traded funds the core of your investments. For domestic exposure consider something like the Fidelity's Spartan 500 Index; for international growth check out a passively managed fund like Vanguard's Emerging Markets ETF . Those two funds sport expense ratios of 0.10% and 0.27%, respectively. That compares with 1.12% and 1.75% for similar actively managed funds, according to Lipper. Assuming you had an average balance of $10,000 in your account and achieved an average annual return of 8% on each, the index funds would save you $2,085 and $2,920, respectively, over 10 years.

Whether you're young or old, taxes matter too. Young investors should consider putting retirement funds into a Roth IRA. With a traditional IRA or 401(k) you invest money pretax but must pay ordinary income taxes on gains when you withdraw the money. With a Roth IRA and similar Roth 401(k) holders pay taxes the year they put the money in, and can withdraw it tax-free in retirement.

"I'd recommend 50% traditional, 50% Roth," says Maul. "There's a million reasons besides retiring that people take money out of a 401(k)—buying a house, losing a job, having a kid. If you have both sources available, you can maximize your flexibility."

By following these steps and sticking to your savings goals, you can have the retirement that you--and your parents and grandparents--envisioned.

Yahoo Office in Japan

Some photos of the inside of the Yahoo! Japan Office. It contain all the facilities need for the workers to work.