The coach disagrees with my assessment. In this clip from the A Football Life series he states, “one thing I’m not is scared”.  The statement is in reference to Belichick being willing to go for it on fourth down.

His fourth down decision making does not in and by itself determine coaching fortitude, however.  There is more to not coaching scared than one’s approach to fourth downs.  It would be like saying I have a healthy diet because I eat broccoli once a week.

The truth is in the pudding.  The Pats defense is soft and has been for many years.  The statistics reflect poor and passive defensive play.  It is soft because Belichick is scared of the downside of an aggressive defense.

Aggressive defenses give up big plays occasionally.  It is the nature of the beast. A blitz at the wrong time can give up a big pass play.  Man to man defense can given up a big play if a defensive back simply slips.  That’s the risk.

Ah, but when one obsesses on the risks, as Belichick does, the rewards go unfulfilled.  An aggressive defense makes significant plays that can drastically affect a game’s outcome.  There are the obvious benefits, like sacks and turnovers.  But the subtle side of an aggressive defense is more important.  Consistently giving a quarterback a half second less to make a decision and bumping a wide receive at the line leads to incompletions.  An aggressive defense leads to what appears to be an incoherent offense.

Instead, Belichick defenses typically make mediocre quarterbacks look like All-Pros.  Some notable performances against Belichick defenses include such heralded offensive juggernauts such as Seneca Wallace, Chad Henne, Colt McCoy, Ryan Fitzpatrick, Rex Grossman, etc.

Belichick’s fear of giving up the big play is his demon within.  It determines every decision he makes – from strategy to execution.  His patented “bend but don’t break defense” is simply a revamped prevent defense.  He often times play this type of defense for entire games!  The results are gobs of yardage given up, a defense that becomes fatigued from being on the field for long drives, and worst of all, it keeps the ball out of the hands of his best player, Tom Brady.

In short, Belichick’s defensive style becomes one where he plays not to lose.  A soft and passive defense is the product of his obsession with giving up the big play.  It is his demon within.

I generally use my own WIFI router at home.  I have had DSL, FIOS, and cable.  The routers that the broadband providers supply are not that great.  The Apple Airport Express is not a very good router either, in terms of performance.  However, it is great for streaming music from iTunes, iPad, and iPhone.  I set up the AirPort Express to join my network and then stream through it.

The problem occurs in having the Airport Express join an existing network – that being the network provided by my WIFI router.  The AirPort Utility software is used to setup the Express.  After having it join my network, the light often flashes amber.  This means it wasn’t able to join the network.

I’ve used a variety of WIFI routers for my home network and a variety of models – mostly LinkSys and DLink.  The problem with the Express joining these networks is always the same – the WIFI security.  WPA security (aka WPA Personal) or WPA2 should be used on both the WIFI router and the Express.  If given an option, choose WPA2 on your router.  Also, if given a choice, choose AES + TKIP.

It appears the Airport Express works with only WPA and AES+TKIP.  I believe WPA implies AES only.  So, if given the option, try WPA2, which implies AES+TKIP.

Specifying these options varies from router to router.  For example, the DLink DIR-655 allows WPA.  But it also has an encryption setting that includes “WPA and WPA2″, “WPA only”, and “WPA2 only”.  The last one was the only one that worked for me.

The deficit reduction is a two-part deal:

• Part one calls for a reduction of about $1 trillion over ten years.
• Part two calls for Congress to find another $1.5 trillion by Thanksgiving.
• If Congress can’t/won’t do it, across-the-board cuts of $1.2 trillion, half from defense, and half from non-defense (with exceptions for Social Security, Medicare, and Medicaid) will automatically happen.

The part one reductions are particularly interesting in that there’s some sleight of hand going on.

For example, of the $1 trillion in cuts, about $400 billion hit the defense budget.  But there are no REAL cuts there:

• The Defense Department budget had been slated to increase by roughly $400 billion over the next ten years.
• The deficit reduction deal simply eliminates those future planned increases.
• In other words, there are no cuts, only an absence of increases.

This is explained by Jack Lew, Director of OMB, in his blog.

Now Leon Panetta, Defense Secretary, has spoken out about how the second series of cuts would be drastic.  If Congress can’t agree on further deficit reduction by Thanksgiving, $600 billion will be cut from defense over ten years.

Well, by my arithmetic, that averages out to $60 billion in decreased revenue spending for each of the next ten years.  This is real; this is not just the withheld increases we were talking about.

But could $60 billion less in annual defense spending really be that bad?  Take a look at defense spending for the past 6 years (source).

2011 – $964.8 billion – increase by $116 billion
2010 – $847.2 billion – increase by $53 billion
2009 – $794.0 billion – increase by $64 billion
2008 – $729.6 billion – increase by $77 billion
2007 – $652.6 billion – increase by $31 billion
2006 – $621.2 billion

The defense budget has increased by an average of $68 billion each year for the past five years.  If it were returned to 2010 levels, we’d save $116 billion/year.  That alone would save over $1 trillion in the next ten years.  Given that the Iraq and Afghanistan wars are winding down, that seems like a reasonable goal.

Maybe my analysis here is too simple.  But it all seems perfectly reasonable.  If there’s anything alarming in these figures, it’s the increase in defense spending over the past five years.

Assuming the above data and assumptions are correct, I think we’ve been deceived by the politicians in Congress.  In the initial deficit cut agreement they agreed to no real defense cuts.  And in crafting part two, initial impressions are that they will be unwilling to cut $60 billion in additional annual expenditures from a totally out-of-control defense budget.

It even gets worse.  After all the haggling and finger-pointing in Washington during the debt ceiling ordeal, both Democrats and Republicans agreed to a watered-down deal that left all the difficult decisions still remaining to be addressed.  In then end, it was largely a bunch of misdirection, sleight of hand, noise, and politics, and achieved very little.

My friend has always taken good care of her car. It has received routine maintenance and she has driven it proudly.

A month or so ago, however, a crack appeared in the transmission case. She brought the car to Valvoline who showed her where the leak was and told here she needed a new transmission case.  She then took it to a local mechanic who sealed the leak. The seal did not hold and she took it back to him the next week to reseal.  The mechanic, who is well experienced and had previously worked at a Hyundai dealership, noticed that the transmission fluid didn’t look good and suggested that the car be taken to a dealer. He also mentioned the car should be covered by the 10 year/100,000mi power train warranty, which my friend had completely forgotten about.  This was the first major problem she has had with her car.

When my friend went to the original dealer, she was relieved at the thought of the warranty. However, the dealer told her she would not be covered. Apparently having any mechanic, other than the dealer, work on a Hyundai vehicle voids the warranty. The dealer rejected the warranty repair due to “outside vendor” service. They suggested that she talk to someone at Hyundai and see if they would agree to the repair. After the Hyundai representative talked to the dealer, they still denied the coverage. The dealer apparently felt that the Valvoline transmission fluid used in the car at the 30,000 mile service period was substandard.

I have to ask myself about the value of a warranty. A large, well-known auto manufacturer, Hyundai, wants to blame another large, well-known parts manufacturer, Valvoline, for substandard parts. Is this really a case of passing the buck and excuse-making? What is the true value of a warranty if a company can simply provide excuses to avoid honoring the warranty?

There is a lesson to be learned – Caveat Emptor. This is just one lesson. Hopefully it will be useful to others when considering new car purchases.

UPDATE ON 7/26, 2011

Another friend just purchased a used Toyota RAV 4.  The vehicle is four years old and had a little less than a year left on the initial warranty.  My friend mentioned that she would purchase the Toyota extended warranty.  For curiosity-sake, I went to the dealer when the purchase was to be finalized and asked about the warranty.  Toyota places no restrictions on third party mechanics working on the vehicle.  In other words, having another mechanic – other than Toyota – work on the vehicle does NOT void the warranty.

In advance of my move to southern California I needed to establish some basic services.  I logged on to the Southern California Edison (SCE) web site and turned on service at my new address.  Everything went smoothly to that point.

After a week in my new apartment, I received a letter from SCE.  They wanted payment of a deposit.  I found this somewhat amusing.  I had never been asked to pay a deposit for a utility before.

The principal was the issue for me – not the money.  What if I could not afford the deposit?  Would they deny electricity?  What really bugged me is that there were no options.  There are no other electricity providers here.  If I didn’t like the terms at which I was being offered electricity there was no fallback position.

I called and lodged a complaint with SCE.  The initial customer service reps really just reiterated the policy.  They did offer to split the deposit over three months.  Again, it was the principal – not the money.  Would one be denied electricity if they couldn’t afford $50/mo.

Interestingly, there was a second option.  If I permitted direct withdrawl from my checking account, SCE would wave the deposit.  I found this amusing too.  Now the monopoly wants direct access to my hard earned money.

In any case, I worked my way up the chain of command.  SCE appears to train their managers well.  They largely will listen and not say anything.  I suppose that is a perfect strategy for a litigious society.

I also called the California Public Utilities Commission’s Consumer Affairs Branch. I did learn that utilities companies are able, by law, to charge a deposit.   I wanted to pursue this further and never received a call back from the appropriate people there.  Overall, the agency seems to be rather ineffective.  I wonder who in California is actually advocating for consumers.  I have never heard of a utility asking for a deposit before and it seems like a silly policy to permit.

A second issue for me was paying for services in advance.  In essence, SCE uses the deposit as advance payment for services the consumer may default in paying.  Other than lawyers – who call their advances “retainers” – I know of no other businesses where consumers pay in advance.  The thought that a monopoly could get away with such a practice and that government would actually permit such a practice – particularly for a basic service like electricity – just enraged me.

The end of the story is that I remained persistent.  I didn’t want to pay the deposit.  I did not agree to direct withdrawl for payment.  I did not want the payments broken down over several months.  Eventually SCE conceded, probably just to rid themselves of a pain-in-the-neck.  Now if only all new customers would complain, maybe the policy would be dropped.

Until recently there was a safety valve that was used whenever healthcare costs increased.  It was the consumer and small business.  Insurers simply passed on cost increases to these groups.  Of course, they did this while maintaining their healthy profits.

An act by Governor Deval Patrick and the Massachusetts Department of Insurance seems to have frozen the valve shut, however.  On April 1 they denied nearly all health insurance premium increases.  In effect, healthcare premiums remained at the 2009 rates.

Shortly thereafter, insurance companies reported significant losses.  Apparently, insurers were already in dire straits and the inability to raise premiums made things worse.  Blue Cross Blue Shield apparently lost $49M in the first quarter of 2009.  That loss increased to $95M in 2010.

Whether those reported losses are credible is another issue.  The article states the increased losses were due to the premium freeze, but the freeze didn’t occur until the second quarter.   The article hints at other accounting anomalies.

In any case, the clamp on premiums is creating some pressure in the system and it will likely cause a ripple throughout the system.   Now insurers are exploring a new valve and talking about making attempts to lower costs by negotiating – and in some cases renegotiating – lower fees with providers (hospitals and physicians).  There appears to be quite a bit of diversity in the rates providers can charge and it seems to largely be related to the clout of the provider.  Providers that are at the lower end will seek increases in their rates, while insurers will look to slash rates at those at those providers on the high end.

The market will now have to adjust.  The consumer and small business are no longer available as a safety valve to absorb cost increases.  Will an earnest effort be made to truly and equitably reduce costs overall? Will some insurers stop offering health insurance?  Will some providers not accept some insurers if rates can not be negotiated?  Will a tiered system of healthcare emerge?

At this point the outcome is unclear, but the pressure is building.

If you expect a happy and rosy picture to be painted for you, stop reading now.  There is largely nothing that any government program has done to help me, as an average citizen or small business.  Healthcare is as expensive as ever.  The Mass Health Connector is largely ineffective.

Let’s start with Massachusetts’ much heralded healthcare program – the Mass Health Connector.  The “employers” section of the web site provides health plans from several insurance companies, including some of the big names.   The first problem I encounter is that the rates offered on the Health Connector web site are higher then the rates we currently pay when comparing similar plans.

I pointed this out to the folks at the Mass Health Connector.  The customer service was quite prompt.  They responded to my email inquiry within minutes.  I was referred to the Insurance Partnership. This organization “removes many of the financial obstacles to health insurance”.  I believe they may reimburse a small business’ health insurance costs to some degree.

The second problem is qualifying for the Insurance Partnership.  The company must pay for at least 50% of insurance costs and the employee’s salary (for a family of one) must be under $32,508.  The cheapest healthcare option on the Health Connector web site was about $260/month.  I used the second cheapest, Tufts, because there was no information regarding the cheapest plan.  Tufts cost $314/mo and has a maximum out of pocket expense of $5000/year.  From my perspective, it seems unlikely that someone taking home roughly $2,000/mo (in net pay) can afford 50% of the premium ($157/mo) in healthcare, which still has various co-payments.

Massachusetts has failed to address the primary issue – the high cost of healthcare.  What have they done?  Mandated that all residents purchase healthcare coverage.  For those who already had difficulty affording healthcare, it is still unaffordable.  The plans that are offered include out-of-pocket expenses and co-payments that are probably still unaffordable to most.

What is the upshot off all of this?  A new, and likely costly, bureaucracy is in place that mandates health insurance.  It may benefit a small number of people who were on the border of being able to afford insurance before.  And this program only costs about $800M/year.

Being simple minded, I have to ask if there is a simpler solution – one that is less costly.  Why couldn’t existing programs, like Medicare, Medicaid, and Mass Health, have lowered their requirements to qualify more people?

As these thoughts settle in, I have to reflect on the politics of the situation.  I can’t help but feel that we, as citizens and voters, were manipulated.  Could the ultimate goal of healthcare effort been to bolster Mitt Romney in his bid for president?  He is a republican and such programs are distasteful to republicans.  But the healthcare plan was seen as a pioneering venture nationwide and was likely beneficial to his campaign.  Implementation of the plan actually fell in the lap of the next governor, Deval Patrick, whose politics seem more in line with the plan.  Of course, who knows what his political aspirations are.

For those looking to Massachusetts as having a model for healthcare, all I can offer is the experience of an ordinary citizen.  There seem to be few benefits and the program seems largely ineffective.  It may have benefits to a small number of residents, but is it worth the cost and could less costly (and existing) options have been applied to them?

NOTE: Please write if you feel you have benefited from the Health Connector.  I would like to hear success stories.

There is a bit of deception in the way Match.com is designed, and it appears to be deliberate.  I’m surprised there hasn’t been a reaction by the user community or consumer protection organizations.

Although Match.com may rightfully claim to have millions of members, how many are real members – with full use of the service.  One can log in and search through millions of “profiles”, many of which have photos.  If a membership is purchased, one can even send an email to his/her target of desire.  But, chances are the email doesn’t make it to its intended destination.

How can that be?  Well, only paying members can read and respond to emails sent to them through Match.com.  When viewing a profile, there is no indication of whether the individual is a paying member.  So, one may shoot cupid’s arrow at another Match.com user, but chances are it will miss.  According to this article, only one in twenty members of dating sites are paying members.  If that is true, on average one would have to send twenty emails just to have the possibility of a response.

Is this deliberate?  I can only hypothesis, but my guess is that it is.  It is a way for Match.com to attract members.  Specifically, it is a way for Match.com to turn non-paying members to paying members.

Does this cross the line?  I believe it does.

Are members aware of the difference between a non-paying membership and a paying membership?  The site explicitly describes the benefits of a paid membership.  It becomes obvious after joining anyway.  The site won’t let you send or read emails, until you pay to become a member.  There is no real deception here.

The deception is for paying members who attempt to contact others through the site.  There is no way to know if the member being written to will be able to receive the email and respond. Why write an email if there is little chance of a response.  So paying members may be wasting much of there time, all in the effort of having Match.com attract paying customers.  Some may call this a good business model. I call it deception.

Addressing this problem is quite simple.  When displaying profiles, Match.com shows whether the user has the capability to respond.  It would only be fair to its paying members.

Artist: Norman Brown (guitar)
Album: Stay With Me
Song: Let’s Take A Ride
Comment: Norman is a top guitarist, with an arsenal of great smooth jazz tunes on CD

Artist: Fattburger (band)
Album: Sizzlin’
Song: Sizzlin‘
Comment: These guys have been around forever and there is a reason for that.

Artist: Eric Merienthal (sax)
Album: Just Around The Corner
Song: Blue Water
Comment: Another moving tune from Marienthal

Artist: Chuck Loeb (guitar)
Album: All There Is
Song: Sarao
Comment: Not many artists can sound as good (or better) live.  Chuck is one.

Artist: Marc Antoine (guitar)
Album: Cruizin’
Song: On The Strip
Comment: Smooth jazz with a little Latin/Spanish influence

Artist: Steve Cole (sax)
Album: NY LA
Song: Everyday
Comment: If his music doesn’t make your want to move, you must be nailed down.  Steve, don’t forget to come back to Scullers soon.

Artist: Joyce Cooling
Album: This Girl’s Go To Play
Song: Expression
Comment: I’ve recently discovered Joyce Cooling.  Playful sounding.

Artist: George Benson (guitar)
Album: Weekend in L.A.
Song: California P.M. (recorded live, in concert)
Comment: Great jazz artist in his own right.  Never afraid to have fun with music.  There is nobody better.  Better live than recorded.

Investors in technology and software often times have an uneasy feeling about SaaS products.  This article describes many common concerns and misconceptions investors have regarding SaaS.  The perspective is largely from that of the investor and venture capitalist.  Typical objections are:

- SaaS is an unproven business model.  The article suggestions that “SaaS is unlike any business model they’ve [VCs] analyzed”.

- SaaS products require larger initial investment.  The implication is that the perpetual software license brings in more revenue. There may also be greater initial outlay in server infrastructure for SaaS.

- Funding for a SaaS may be more difficult to come by because venture capitalists are wary of SaaS.

These misconceptions will be addressed below.  In the process, some benefits of SaaS will arise as well as possible reasons why large investors don’t find SaaS appealing.  Some additional benefits will also be presented.

The fact that the VC community does not feel comfortable with SaaS is largely irrelevant to the viability of SaaS.  The VC community (including angel investors) has largely been mutually exclusive with innovation and risk for the past decade.  If VCs have little understanding of SaaS, then it is due to their own negligence.  Service to consumers has been in existence since the milk man and diaper service, over fifty years ago.  Services provided to businesses have been around even longer, as lawyers, accountants, insurance, internet/broadband, telecommunications, and more have been provided as services for years.

There have also been some very successful applications provided as a service.  One of the most successful is Salesforce.  Smaller solutions such as Basecamp, a project management tool have thrived.  Such applications have been widely accepted by business.  One tremendous benefit is that they bring capabilities to small business, that only large businesses could afford at one time.

Perhaps the reason SaaS is not appealing to VCs and other large investors is because it lessens the need for their “services” and provides more leverage to the entrepreneur.  How?  Let’s address the next misconception and come back to this.

Many investors believe the perpetual software license is more financially feasible.  The case here is that charging an initial fee for software is better than a recurring fee as the service is used.  There are two problems with this thinking.  How do software companies continue to improve there product(s) after the initial purchase?  They’ve received the large initial payment, which will likely spent shortly thereafter.   To address this, many software companies charge “maintenance fees”.  Typically these fees are 15% to 20% of the initial license fee, on an annual basis.

How is this different from software as a service?  It isn’t.  The customer is paying a fee (called a maintenance fee) as long as they wish to use the software.  In essence, the distribution (ratio) of the initial fee and the maintenance fee are different between perpetual license and SaaS.

This “perpetual” model has led to some harsh feelings between businesses and  software vendors over the years.  Businesses questioned why they needed to pay anything after the initial purchase.  Initially maintenance fees were low.  Just five years ago they were in the 10% to 15% range.

Why is SaaS better than the perpetual software pricing model:
1) SaaS allows more flexibility (charge per user, per use, per output, etc).  In the end, customers feel they are getting better value.
2) SaaS removes the large initial cost of perpetual licensing, which can in many cases remove a barrier to entry, especially to smaller companies.
3) Recurring payments of SaaS allow the vendor to continually investment in improving the product.

Another objection to SaaS is that there is a greater initial cost in setting up (hardware/software) infrastructure.  That is also another misconception.  Hardware, software, broadband, and hosting costs have dropped dramatically over the years.  Virtualization has also been a significant contribution to lower infrastructure costs.

But the biggest development has largely gone unnoticed.  It is not surprising that the investment community is in the dark.  Application services are currently being offered that may drastically change the landscape of computing, such as Amazon’s EC2 and Google’s App Engine (there are others too).  While in their infancy, these application engines provide for complete web application and web service environments (often referred to as Cloud Computing), using the same infrastructure that Amazon’s and Google’s own applications run on!  Scalability and redundancy, which are typically quite costly to achieve for a new venture, are built in to these services.  Costs are also very reasonable and based on usage.  In effect, a small, growing venture can build its application on the same platform as Amazon and Google, while costs scale with revenue.

And the last objection to SaaS is that funding may be difficult to come by, particularly via venture capitalists.  This has largely been addressed.  Due to low barrier to entry and affordable infrastructure,  the need for VC is lessened.  And that may be the real reason why the VC community doesn’t particularly care for SaaS.

SaaS opens up greater opportunity to the entrepreneur.  It minimizes the need for large capital outlay – and the dependency on outside investment.  It allows more value to be developed in the early stages and to prove a concept with little risk.  As the aforementioned article discusses, other options, such as partnerships or having software development costs shared with early customers are good options.  All of which lessen or remove the dependency on the VC community.

So, while some may perceive SaaS to be untested or unappealing, consider the source of those negative reports.  Innovation is a quality of the entrepreneur not the investor.  Investors may have alterior motives.  SaaS provides the enterpreneur with more leverage and opportunity.  With SaaS the success is based more on the idea, commitment, and persistence – and less on the financing.