Category: Big Business

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Tales from C&O 2008: Speakerboxxx

In our previous installment, I chronicled the epic fail of our USB-drive suppliers. I know you’ll likely find this stuff boring, but I offer all these details so that you guys will have some idea of why this blog doesn’t always get the attention I’d like to give it.

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Our annual Contracting & Outsourcing show has two major components. One is our one-day tabletop exhibition, which features 125 pharmaceutical contract service providers, vendors, and other companies. Over the years, we’ve fine-tuned the schedule to make sure the attendees visit the exhibit hall numerous times during that day. Plenty of exhibitors have told us that our show is the best return on investment of any event they attend, because of the quality of the attendees they meet.

The main thing that can go wrong for the exhibitors is that one’s display or materials don’t show up. This happens almost every time. Several years back, there was a logistics provider whose materials never arrived at our show. I always laugh about that.

Miraculously, there were no major exhibitor complaints this year (as far as I know). We did have one surly exhibitor the night before the show, but he turned out to be one of those bullies who turns out to be a wimp when you stand up to him.

Now, the other part of the show is the conference, which runs a day-and-a-half. We have 4 speaker sessions the first day, and 5 the second. This year, I organized all the topics, speakers and timelines (with plenty of assistance from my conference advisory board) and felt very good about the lineup. However, it’s one thing to have the lineup down on paper; it’s another to actually see the speaker standing at the podium at the appointed time. . .

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Tales from C&O 2008: Warped Drives

Our 7th annual Contracting & Outsourcing conference wrapped up at noon on Friday, and the attendees, speakers, and exhibitors all went away happy, as far as we could tell! Success!

Our exhibit hall sold out in record time, and this year’s attendee count was up 50% from 2007’s; we chalked that up to a combination of going back to Thursday-Friday dates from last year’s Tuesday-Wednesday (the only dates we could get the venue, the fantastic Hyatt Regency in New Brunswick, NJ), and the lineup of speakers and topics that I assembled.

(This was the first year that I flew solo on the speaker lineup, following the retirement of the guy who used to moderate the conference and help us get FDA speakers. For months, I second-guessed almost every  decision I made regarding the topics, speakers and scheduling. Except for the one that actually failed at the show. I’ve learned a valuable lesson: never let a panel discussion take questions from the audience.)

Having such a large number of attendees meant that our registration desk staff had to be very well coordinated. My associate editor runs that part of the event, and she did a great job of figuring out how many people we could add behind the desk before we reached the point of diminishing returns, where people smack into each other while retrieving badges, badge-holders, programs, USB drives, and bags, while printing up new badges for walk-up attendees. I think she gets tired of my “we couldn’t do it without you” praise, but that doesn’t make it less true.

Our show has hundreds of attendees, a dozen speakers, and 130 exhibiting companies (most of which send more than a single employee), and it’s set up and run by 4 full-timers who are also responsible for producing an ongoing magazine, with help from several marketing assistants, who have to divvy their time among our conference and all of the other magazines they work on. So we each have checklists and timelines of things we need to get done for the show.

In addition to assembling the speaker lineup, I’m responsible for making the 52-page conference guide (with heavy assistance from my associate editor), designing a dozen or so posters for the event (thanking sponsors for breakfasts, lunches, coffee breaks and prize giveaways, displaying the conference schedule, and giving directions for the sessions and the exhibit hall), getting the presenters’ Powerpoint files together and making sure they don’t have font problems, getting the speakers’ hotel-room comps ironed out, and a million other little things. (Oh, and we have to finish the 156-page October issue.)

The other 3 full-timers also have huge sets of tasks, some of which have to be taken care of months in advance and some of which can’t be completed till the day before the show. That’s event planning for you; there are a lot of opportunities for things to go wrong, but when it all works, you feel even better about making it happen.

Which isn’t to say everything was smooth sailing. . .

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Dreams of sugar skulls and rotting sharks

In Unrequired Reading last week, I posted Clive Crook’s praise for Damien Hirst, who is auctioning off some of his “art” in the biggest auction ever for a living artist, or something. Crook didn’t praise Hirst’s art qua art; rather, he praised Hirst’s ability to get stupid rich people to blow millions on his products:

I am a huge admirer of Damien Hirst. Not of the art, which is rubbish, but of the sheer productivity and exuberance he brings to his life’s work of fleecing rich idiots. “Oh Damien, you’re a genius. Screw me over again.” “Why not,” he says, munching a bacon butty.

Art critic Robert Hughes is less cheery about this prospect. It’s not that he feels badly for the rich people who are spending multimillions on Hirst’s work; rather, he has a more conventional pissed-off-edness about what Hirst’s products say about contemporary art:

If there is anything special about this event, it lies in the extreme disproportion between Hirst’s expected prices and his actual talent. Hirst is basically a pirate, and his skill is shown by the way in which he has managed to bluff so many art-related people, from museum personnel such as Tate’s Nicholas Serota to billionaires in the New York real-estate trade, into giving credence to his originality and the importance of his “ideas”. This skill at manipulation is his real success as an artist. He has manoeuvred himself into the sweet spot where wannabe collectors, no matter how dumb (indeed, the dumber the better), feel somehow ignorable without a Hirst or two.

Which is to say, give Hughes a read, too!

(I gotta get around to reading his memoirs sometime. . .)

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Rated C for Cretinous

If Slate‘s business/finance site, The Big Money, is going to run inane articles like this one that calls for TV and movies to receive ratings about product placement, then let’s hope it dies a swift and quiet death:

In contrast with the late ’60s, our period is one of inexhaustible consumption and materialism, and the collapse of personality and aspirations into a culture of brands and logos. We are bankrupt and filling our seas with plastic. Yet we have no method by which to regulate-or even measure-the hidden ads the fill all of our many screens.

And speaking of “if only things were more like the late ’60s” . . .

Update: RR’s policy suggestions are unsafe at any speed.

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Market timing

Two anecdotes that help me make sense (of humor) out of the Lehman Bros. bankruptcy, the Merrill Lynch buyout, the Fannie/Freddie seizure, Bear Stearns debacle and all else:

1.

Around 1991, I walked into a local-ish comic store, as is my wont. As I was checking out, I noticed that the store had the first issue of Justice League International for sale at $20. It had come out in 1987 and I had a copy at home. A semi-impoverished college student, I figured I could use a few bucks, and asked if they were buying copies of that comic.

The clerk said, “No, man. We’ve got a whole box of that issue back in the storeroom.”

“Then why are you selling it for $20?” I asked.

“Because that’s what [The Guide] says it’s worth,” he told me.

Ah: [The Guide]. I don’t recall which price guide was in vogue back then, but I think that was the beginning of the era when comic magazines were publishing revised price guides on a monthly basis.

“But [The Guide] doesn’t make money selling copies of JLI #1,” I replied. “It makes money selling copies of [The Guide]. You oughtta put ‘HALF-OFF!’ signs up and I bet you could move the whole box pretty quickly.”

“But [The Guide] says they’re worth $20!”

“It’s only worth what you can get for it,” I said. Never let it be said I didn’t learn anything from my dad.

Mark to market. That’s why Lehman Bros. went into bankruptcy while Merrill Lynch managed to get itself bought.

2.

My next-door neighbor took his stockbroker exam in October 1987. This was three days before the Black Monday collapse, in which the Dow tanked 22%. He went on to work as a substitute teacher in our high school for the next several years.

In that spirit, congratulations to Slate, which launched its new business/finance site, The Big Money, yesterday.

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Long-Term, my ass

I recently read When Genius Failed, Roger Lowenstein’s chronicle of the rise (1994) and collapse (1998) of Long-Term Capital Management, a hedge fund staffed by Harvard and MIT Ph.D.s. The LTCM team developed “risk management” models that would allow them fund to “vaccuum up nickels” in massive (leveraged) quantities. The formula worked for a while, until it didn’t, at which point people started to realize that LTCM was leveraged out the wazoo, and that the value of its derivatives bets was literally incalculable.

Once the bottom fell out, the Fed had to coordinate a bailout of LTCM by the world’s leading banks. Many of these banks were treated as doormats by LTCM during its meteoric rise. Trust me; it’s a really entertaining story that Mr. Lowenstein tells. As David Pflug, Chase’s head of global credit, put it, “You can overintellectualize those Greek letters [in LTCM’s formulae]. One Greek word that ought to be in there is hubris.”

Two major issues — beyond the failures of “risk management” — struck me while I read the book. For one thing, LTCM’s collapse was precipitated by a series of regional financial crises in 1997-98. The final straw came when Russia defaulted on its foreign bonds in order to pay workers at home. This means, “Russia welched on its worldwide obligations because it barely had money to keep its government afloat.” And this occurred only ten years ago. So if oil futures didn’t rise 1000% in the past few years, how brazen would Russia be right now? (and if they drop significantly, where will Russia end up?)

The third issue was that the behavior of LTCM and the major banks sounded remarkably familiar to our current mortgage-driven crisis (right down to Lehmann Bros. suffering rumors about its underfunding and impending collapse). The exotic derivatives, the incalculable, illiquid assets, the “too big to fail” mentality: this could be 1998 writ large! Had these financial genii — and many of the major players involved in the recent Bear Stearns collapse also figure into When Genius Fails — managed to ignore every lesson from LTCM’s failure?

Near the end of the book, Mr. Lowenstein wrote:

Permitting such losses to occur is what deters most people and institutions from taking imprudent risks. Now especially, after a decade of prosperity and buoyant financial markets, a reminder that foolishness carries a price would be no bad thing. Will investors in the next problem-child-to-be, having been lulled by the soft landing engineered for Long-Term, be counting on the Fed, too? On balance, the Fed’s decision to get involved — though understandable given the panicky condition of September 1998 — regrettably squandered a choice opportunity to send the markets a needed dose of discipline.

That’s why I was really gratified to open today’s NYTimes and discover that Mr. Lowenstein has a great essay on exactly that topic, “Long-Term Capital: It’s a Short-Term Memory”! He does a good job of explaining the issues without getting overly technical (one of the complaints others have had about his book).

Give it a read; I bet you’ll dig it. (And get irate, when you start reading about the Fannie Mae / Freddie Mac seizure. . .)