Happy New Year Everyone!

So the end of the year is upon us, much faster than I think anyone was prepared for...

Whatever you're doing, here's to hoping for a new year filled with health and happiness to you and the ones you love.

For those who are still anxiously awaiting for a response from the school of your dreams-- there is still hope! I have already been dinged, waitlisted and have heard completely nothing after an interview from a third school. There is light at the end of the tunnel! Here are a couple songs that make me keep the hope alive!...Keep fighting the good fight everyone-- we're almost done.

Microsoft and MasterCard, a Melodious Match

Saw this article from Pymnts.com ("MasterCard and Microsoft: A Dream Team for Small Businesses") come across my computer screen today. At first glance, it's nothing paticularly revolutionary-- Microsoft will be offering cloud solutions for businesses and MasterCard is their chosen payment machine. In turn, MasterCard will provide a 10% discount for all business owners who enroll in cloud services by paying with their MasterCard.

I am intrigued though because this article shows:

• The financial services industry is slowly realizing that there is a lot of money to be had in the small business niche (and not just in the Square realms). In my experiences, small business is typically the majority or close to majority (depending on the exact line of service you're looking at, corporate vs consumer card, bank holding, loans, etc.) of the merchant segment. They typically don't produce more than $500,000 in revenue in a year, but there's a lot of them. So in this game, you're really making money a penny at a time, but you're making it off of millions of merchants simultaneously....the math works out. I'll be interested to see where else this exploration of small business leads us
• That there is an increasing focus on cloud services (duh), but also of providers of cloud services to be partnering with non-technology companies in order to make their offers richer and their reach wider. Amazon, for example, rolled out a gift organizer feature on their website with the sponsorship of Discover. Although this is not the exact same thing as what's happening with Microsoft and MasterCard, it is something that the Ms could do together in the future. Combine Microsoft's massive monstrosity of machinery, mechanisms and media (hahaha sorry I couldn't help myself) and MasterCard's large consumer base (which spans multiple business segments, whereas Microsoft makes most of their money from large corporations), and the benefits are great:
• Microsoft could expand into other market segments (mid market, small business)
• MasterCard increases their revenue from interchange charges across the board
• MasterCard gains increasingly visibilty to the "large fish"
• MasterCard and Microsoft together form a relationship that could morph into consumer products. I know, this sounds crazy, but hear me out. MasterCard is aggressively moving into the alternative payments/mobile payments area, backed with a lot of industry expertise, funds, and a focus on staying ahead of the regulatory curve with their launch of chip solutions, etc. Microsoft has a monopoly on operating systems, extensive experience in producing consumer products and is moving into the mobile product space by offering their Windows7 phone. Match made in heaven for mobile payments? Maybe....

Culture + Business = Misunderstandings?

I read an interesting article in The Economist ("Tribal Japan") that reported the recent firing of Olympus CEO, Michael Woodford. For those of us who have missed it, Michael Woodford is a big deal because he's one of 4 non-Japanese, gaijin (means "outsider", but infers "foreigner") to run a Japanese company.

The controversy stems from the fact that Michael Woodford didn't get fired until he began asking some very awkward questions about approximately $1.3 billion dollars worth of "suspicious transactions" (silly gaijin), at which point the board fired him and literally told him to take a bus to the airport. The company's justification? His inability to adapt to the company culture.

Sure, on the service it looks like a pretty clear case of "Oh no, this guy is asking some bad questions that could potentially unveil the fact that we may have embezzled or covered up over a billion dollars in questionable things. Quick! Fire him!". If this is actually the case, then this should probably be used as a case study of poor corporate governance strategy (Really? You thought the best way to hide the fact that you were doing bad things was to fire one of the FOUR foreigners currently running a Japanese company? This being the guy who regularly gave interviews to small rags like Financial Times? Poor choices). I would like to caveat what I'm about to say by stating that I in no way approve of this behavior.

BUT. (You saw that one coming, right?) BUT. Let's just take a step back and try to see things from another's perspective. Olympus is a very well respected company in Japan (fun fact for the day: it enjoys an almost monopoly on the world's gastro-intestinal endoscopes, with approximately 70% of the world's market share, estimated at ~$2.5billion). It hit its ten year stock high in 2007, with a price of Y5070.00, and since then has had a couple bright spots, but has declined overall since then. More recently, there has been talk of downgrading Olympus to a BBB- status, potentially will be investigated for securities fraud (I'm sure especially in light of the information Woodford raised) and has been involved in a class action lawsuit (which it is now battling, citing that inflammatory and untrue information has been proliferated about the company). Two of its biggest investors, Harris Associates and Southeastern Asset Management Inc., recently lashed out at the company, offering strong suggestions on how to better manage the company and its recent accompanying scandals.

In light of this information, is it possible that the company had been looking for a method to oust their current CEO and replace him with new blood? That potentially they simply have the worst timing ever in making corporate decisions? Or, if it is a cultural thing, maybe it is an acclimation issue-- Woodford was very open in lashing out at his former company in the news, and maybe he potentially was not a fantastic leader. All I'm saying is that there probably are cultural misunderstandings and cultural tie-ins that led to this powder keg, but it could have been exacerbated by outside influences or could potentially be two-sided. Again, I don't approve of their management of the situation, because I'm sure there is a lot of "good old club" going on, but to be honest, that probably happens everywhere. Normally, companies don't make mistakes like this on such a grand scale or in such a fantastically sensationalized way, but it happens. Blowing this story out to be discriminatory move is probably a bit exaggerated.

Putting the Master Back in MasterCard

I couldn't help myself. I apologize for the terribly punny line.

But honestly, if I were MasterCard right now, I might be saying just that, strutting about among all the other issuers and preening a lot. (Apparently MasterCard is part frat boy and peacock. Or a peacock that belongs to a frat.)

MasterCard already owns the PayPass solution (which is their "tap and pay" method), which is already available at merchant locations nationwide. Most recently, they have:

• Signed an agreement with Google to be the issuer in the Google Wallet solution
• With the Citi MasterCard, Google Wallet-ers can begin using Google Wallet right away. If they don't have that card, they can use their Google prepaid card. By putting their name out there on one of the most talked about new products of this year, MasterCard is definitely making a statement. A statement along the lines of "Hey! Maybe Visa talked about it for a long time, but guess who got here first? Nyah nyah nyah."
• Formed a strategic partnership with mFoundry to make mobile payments more widely used by allowing easy integration through banks
• With this strategic partnership, MasterCard is getting a lot of exposure to the development community and making strong ties with one of the leading mobile banking providers in the US market today. mFoundry already provides mobile banking solutions for nearly 600 banks and credit unions, and together mFoundry and MasterCard are already planning on creating a mobile application that lets mobile phone operators to offer PayPass payments from their phones
• Announced an agreement with Western Union to provide electronic payments, prepaid cards and money transfers more efficient and convenient for consumers around the world.
• This is intriguing because it means two things: It means that MasterCard doesn't want to put all of their eggs in one mobile basket, and it also means that they have their sights strongly set on the emerging markets where there is a large potential market of underserved adults (from a financial services perspective--the article estimates that number to be around 2.5 billion adults worldwide)

I know I've been a hater in the past, because they had been so quiet for so long. But we all knew that there were two options for why they were so quiet--they either had absolutely nothing going on and were quietly ordering pizzas, pulling all nighters and fretting about what to do, stressing like a college kid the night before finals, OR they were quietly forging ahead with some pretty impressive deals. Maybe both. But based on the news we've seen so far, I can make a guess at their strategy:

• Do everything you can to ease/encourage adoption. No explanation necessary
• Forge into emerging markets where there is a large potential population open to convert from other banks or sign up for new financial services. This is two-fold: of course they want the name recognition of partnering with the leader of remittances and electronic fund transfers, but it's also because they know that it's only a matter of time before these "emerging" folks decide they want to step it up a notch and move into the credit card options. Especially for some of the emerging markets, like Brasil where credit is the most common form of currency (and they are legally allowed to offer discounts if you pay by credit!) this could be a significant move in capitalizing on new customers or cannibalizing exisitng card customers
• Play two ponies. Electronic fund transfers and mobile payments. Excellent double whammy. One is relatively accepted, especially in cross-border transactions and C2C payments (huge volume there), the other is causing a lot of buzz and getting a lot of consumer attention, particularly in the more developed (read: affluent) economies
• Play a whole herd of ponies when it comes to partners. Sure! Get mFoundry for some development, hook up with Western Union for some electronic funds transfers and go to Google for...well....for Google. What's next? A trusted service manager, a MNO (my bet's on Sprint or T-Mobile) and a hardware manufacturer
• Be quiet. And deadly. No flashy PR campaigns (*ahem* Google), no overpromising (*ahem* ISIS). Just results. I like it!

Let's see what happens....Let the games begin!

Women, Work, Weddings and the Southeast Asian Economy

Everywhere I turn nowadays, it seems like I'm seeing articles that are releasing "new findings" or yelling about "surprising analysis" about the state of women in the world today. Marketers are surprised that we make the majority of household purchase decisions, financial advisors are excited that we are more serious about our financial futures than previously thought (and more financially conservative/open to financial advising as well), social media gurus are aiming for us--knowing that we are the heaviest users of social media networks.

Some of the most interesting things that I've read recently though are more about the traditional values that women are transforming. I read an article called "Asia's Lonely Hearts", where recent (shocking!) findings show that Asian women are getting married later. The reason? Because they're enjoying their freedom, because the government allows them more financial independence when they're single than when they're married, and because they're beginning to see the value in putting their careers first before diving into the more traditional things that are expected of them after marriage (career pausing, babies, etc.).

What does this mean? Well, it means there is a whole generation of eligible bachelors (a lot of them the only children of their families) struggling to find a woman and start a family, a pursuit that is critical in Asian society. It also means that, because the pool is smaller, the demand is greater, and the competition is fiercer. A lot of the youth in Asia (I speak mostly from my knowledge of south east China specifically, mostly Malaysia, Hong Kong and Singapore) are typically migrating to the cities in search of jobs and ways to potentially better themselves through jobs or connections. In these cities, only the most influential, wealthy or well-established find mates. In the countryside, where the youths are already less educated, there is becoming less and less of an opportunity for them to progress to the levels where their families would make an investment in sending them to the cities. This pause leads to overall stagnation, and with a growing working-age demographic...the government should begin to worry about the potential future progress of their society.

Flash over to Japan, and I read this recent article ("Land of the Wasted Talent") about Japanese firms that have only now begun to realize the brain drain that is happening when they fail to appeal appropriately to women. The article claims that nearly half of Japanese university graduates are female but only 67% of these women have jobs, many of which are part-time or involve serving tea. The most worrying part of this article (in my opinion) is the following phrase: "Most companies have rules against sexual discrimination. But educated women are often shunted into dead-end jobs. Old-fashioned bosses see their role as prettifying the office and forming a pool of potential marriage partners for male employees."

Beyond my initial horror at the word "most" in the first sentence and the entire last sentence, I understand how this could happen. Old-fashioned bosses are not viewing women as their full potential as workers, and this probably manifests itself in other ways too-- inflexible work schedules, no concessions to ameliorate the life of a woman that potentially has to care for children and aging parents (caring for your parents, often in the same home, is very common in asian cultures)--which would drive women away. Where do these women go? Interestingly enough, a lot of them go to the more "westernized" locations-- some women in the article mentioned moving to Hong Kong, where "career women are admired and nannies are cheap", which is good to bolster the ecnonomic strength and progressive perceptions in southeast asia. However, not all women can go there, so where does the majority go? To foreign firms, where such concessions (nannies, flexible work schedules, maternity leave, etc.) are common or expected. This is primarily good for the United States and Europe, where there is a wealth of highly educated talent waiting to be wooed away, but this could spell disaster for an economy where the working force is quickly aging and there has already been signs of a changing "traditional" lifecycle (schooling, marriage, children).