Clarification regarding L$ Economic policies
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mcgeeb Gupte
Jolie Femme @}-,-'-,---
Join date: 17 Sep 2005
Posts: 1,152
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05-13-2006 16:33
From: Desmond Shang This is good economic information, and I'm glad that it is just a little bit vague.
Consider what a statement like this would have done: "We'll sell whatever it takes to prevent the LindeX from reaching $L 249 / USD" - that's an instant recipe for market speculation, shenanigans and gaming the system.
What we have learned here, is that the people who are hoping for sudden economic upheaval - the $L spiking to say: $L 200 / USD or such, are probably never going to 'win'.
And as crazy as it may sound, market upheaval is not a bad bet in a new untested economy - it's a cheap bet, and only takes a few hours of market frenzy to cash in.
It's like a free lottery ticket. Why keep $L 500,000 on your person, when you could leave it for bid at $L 150 / USD? If the money supply has a momentary 'dry spot' during a new user rush, you might double your money. What the Company has really done is merely "cancelled the ticket."
I do have residual concerns - because it's very hard to eliminate a revenue source of any kind, and people will watch for *any* kind of pattern and try to game the system.
But by and large I see this as a measure we won't be worrying about until there are dozens of cries screaming "the $L is rising too fast!!!111" in these forums. Excellent post and much better than RBD's ugly thing. |
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Shaun Altman
Fund Manager
Join date: 11 Dec 2004
Posts: 1,011
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05-13-2006 16:56
From: Elror Gullwing Hi, Shaun. But, how do we know that really an accurate money supply? Is the LL money supply figure adjusted for what would be termed 'capital flight' in a real world economy and currency? Sure, LL knows the amounts being infused and the amount of the LL sinks. But, how is LL capturing the millions of $L's that are being converted to USD by third party currency traders every month?
I see IGE is, once again, overstocked, but there are other traders who are still buying $L's for USD.
Bottom line, is that $661MM figure totally accurate? Hi, Elror. I am not "ReserveBank Division".  |
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ReserveBank Division
Senior Member
Join date: 16 Jan 2006
Posts: 1,408
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05-13-2006 21:08
From: Elror Gullwing Yes, good point. But, I am thinking that IGE Wheeling, et al, are acting as inworld reserve banks, and the $L's they hold, even in inworld accounts, are not circulated in terms of economic activity... buying land, shopping, etc. I don't think we could include the millions of $L's held inworld by the entiies such as IGE Wheeling as Domestic Money supply.
LL can include the amounts held by IGE Wheeling, et al, as part of the total money in circulation, but not as part of the domestic money supply that every resident depends on for day-to-day inworld economic activity. It would be safe to say that IGE holds about 10% of the money supply.. |
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ReserveBank Division
Senior Member
Join date: 16 Jan 2006
Posts: 1,408
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05-13-2006 21:28
From: Dnate Mars You have never had to try to deal with India have you? Coordinating projects over seas is not as easy as you would think. Multibillion dollar firms have had there share of trouble trying to outsource to India. What make you think that a small little company like LL can do it so easily? Oh, and India is not 1/20th of the cost, it would be closer to 1/6th if you are lucky. Plus you would have to factor in the cost to manage people in a country that is half way around the world. A) A little company like LL can offshore because all they need to do is contract with a firm who specializes in the fields LL needs them in (Network Ops, Software Development, etc). B) Here is a snap shot of salaries in India (Source: Mercer Human Resource Consulting) Project manager: £5,220 (US$9,800/yr) Software engineer: £5,344 (US$10,100/yr) Accountant: £2,956 (US$5,586) Sales rep: £2,464 (US$4,656) Production worker: £964 (US$1,821) Now according to Salary.com, a Intermediate Level Software Engineer working in San Francisco has a median income of US$75,835. Which begs the question, why is LL keeping expensive programs on the payroll when they can cut 90% of them, offshore the work to India, and let the 10% they keep manage and run the software development with their Indian Team? Sure there might be "quality" issues, but they can be fixed while at the same time holding onto your profit. C) You don't manage the people the people, that is the job of the contracted firm. You just draft up requirements for work, give them to the contractor, and they bring you back a completed project. If there are issues, you can haggle over the details. There is no need for LL to fly folks to India weekly to keep tabs on an office of LL employees. Offshore the work to contractors.. If they screw up, axe the contract and give it to another firm. All the while, saving $60,000 a head. Turning LL's books from Red to Black. And making Jeff Bezos smile with joy. |
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Maxx Monde
Registered User
Join date: 14 Nov 2003
Posts: 1,848
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05-14-2006 05:03
Offshoring is just the 00's version of 90's 'rightsizing' after the bubble popped.
Its just a bad idea, generally, without defined development guidelines and the trust needed to have a cohesive project plan across thousands of miles and time zones.
Can large-scale collaborative projects work? Sure, I'm just not convinced this would help in this case.
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ReserveBank Division
Senior Member
Join date: 16 Jan 2006
Posts: 1,408
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05-14-2006 07:28
From: Maxx Monde Offshoring is just the 00's version of 90's 'rightsizing' after the bubble popped.
Its just a bad idea, generally, without defined development guidelines and the trust needed to have a cohesive project plan across thousands of miles and time zones.
Can large-scale collaborative projects work? Sure, I'm just not convinced this would help in this case. I think you are mistaken... Timezones and Thousands of Miles mean nothing in the 21st Century of Internet/Data Communications. Back in the 90s is was still Buck Rogers SCIFI stuff.. But in 2006, you can have an office/team of people on the other side of the global and bridge them together with your local workforce using Net Conferencing, IP Telephony, etc... Communications, Ideas, Implementation, etc can all be managed and worked as if you had the team of people sitting right next to you. The only difference, your team now cost $60,000 less per head. We are in a Global Marketplace. In Theory, the days of needing a office space and employees working behind desks at some centalized location is coming to an end. Everything can now be Outsourced/Offshored. Human Resources = Outsourced Network Operations = Outsourced Software Development = Outsourced Payroll = Outsourced Server Farms = Outsourced The list goes on and on... King Philip could get away with almost a staff of (1). Although that would depend on his knowledge of various fields of expertise. So it would be most likely he would manage a small team who overseas the operations of each outsourced department. The technology exists, its just an issue of using it. Employees in Mumbi, India are cheaper than employees in San Francisco, CA. The |
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Eloise Pasteur
Curious Individual
Join date: 14 Jul 2004
Posts: 1,952
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05-14-2006 08:08
I have a friend IRL (yes, really, I do) who works in the insurance industry. The company he works fairly recently outsourced all it's help desk and a large part of it's direct customer support work to India (although not Mumbai). They are currently in the process of pulling half of it back and seriously considering pulling the rest back. Cultural differences, sensitivity to accents especially when discussing financial matters, timezone and holiday issues are allegedly the factors behind it - the first two possibly more than the last two, but they're all in the mix.
Any other brits reading this can also, I'm pretty sure, tell you which highstreet bank has as a fairly large part of it's advertising campaign the fact that you can get local help and advice, rather than phoning India. "My Indian, round the corner, my help centre, India" is the relevant line I think.
Now they're both financial industries, and LL isn't. Certainly some of what they're doing could be outsourced and save money, but it's not quite that clear cut for most of the organisations that try it over here, and I strongly suspect it wouldn't be in the world of providing SL either.
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Shadow Garden
Just horsin' around
Join date: 17 Jul 2005
Posts: 226
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05-14-2006 08:25
From: ReserveBank Division
My recommendation, start offshoring the "Linden" employees jobs
to India. Outside of Server Farms and Communication lines, the next
biggest expense are those SanFran employees who cost too much.
The SanFran market is very expensive and is eating up the LL profits
for SL. Lets assume SL had 500 sims generating US$1,170,000/yr in
revenue. That number alone could only employ 25 people with the
average salary of around $46,000/yr. Peanuts for a tech firm in the
SanFran area... And thats just based off the revenue numbers.
After you minus Hardware, DataCenter Costs, Building Rent, etc..
That $1/million annually is going to be trimed substantially.
I'm sure LL's SG&A costs can be trimmed way back if they layoff
90% of their workforce and outsource everything. Maybe keep a
a lead programmer to double check the work from India and give
them guidance. But everything else, (Human Resources, Call Center,
Network Operations, etc)... Send those jobs to India for 1/20th the
cost. Then watch the profits roll in and the badly needed upgrades to
SL finally get done.
I love when people try to use this as a quick fix. The only people who profit from outsourcing are the stockholders/investors. The company staff gets laid off and the public image of the company starts to suffer. The stockholders/investors cash out as quickly as they can as the company begins to fail. Customers leave the company in droves as they get fed up with being unable to get proper support for their product. At the end, you have those lucky stockholders who got to ride the rocket up, and the failed company left bankrupt under them. Then the stockholders/investors race off to a new company and repeat the process. Slow steady growth just doesn't whet the appetite for fast profit, so companies are obliged to sacrifice long term plans of stability for short term plans of profit. And to be honest, I'd be far more interested in seeing them outsource some of these multimillion dollar CEO, CIO, COO types. THAT would get a quick boost in the numbers, but somehow you never see that happen now do you.
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Raster Teazle
Registered User
Join date: 13 Sep 2005
Posts: 114
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05-14-2006 08:49
How about moving all of LL's employees over to India where the cost of living is cheaper too!
Hell, just move LL over to India. Whats the sense in having 1 employee in the states.
I hate when people come up with this "outsource" as a solution to financial problems. It has already hurt a lot of industries indirectly and directly. People now expect a service to cost what it cost in the outsourcing country. If we were living in India or any other outsourcing country that would be fine.
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Jopsy Pendragon
Perpetual Outsider
Join date: 15 Jan 2004
Posts: 1,906
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05-14-2006 11:46
I'm in Maxx's boat. Outsourcing things like HR and Payroll in small companies makes sense, the duties are clearly defined and in small companies not time consuming enough to justify an entire headcount. Outsourcing globally is sometimes okay when an entire project can be farmed out. With SecondLife? Where they're still experimenting and innovating as they go? There is no substitution for actual physical proximity. You take members of a development team and split them up (even put them far enough away from each other in the same building) and the necessary communication that establishes a common direction begins to fade. Open source projects on the internet work because the common direction for the various projects that are working is already clear. With SecondLife? It's too much of everything to anyone, and without a tight knit project team in yelling distance of each, it will only grow more chaotic and self contradictory. (Unless you've worked with overseas teams successfully... don't go suggesting it as a viable solution.  |
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Aleister DaSilva
insert witty phrase here
Join date: 19 May 2005
Posts: 168
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05-14-2006 12:19
From: ReserveBank Division Its pretty clear, the Linden Lab business model for SL
isn't moving them closer to profit. As such, the nuclear
option is becoming more and more attractive. The option
to nickel and dime everything they can think of to get more
USDs flowing in.
Now there is nothing wrong with any business attempting to
create more revenue streams. But in this instance, it appears
to suggest that LLs core revenue stream (Land Sales/TierFees)
isn't bringing in enough money to get them out the red. So all
these nickel and dimes are attempting to bridge the gap between
Red and Black.
My recommendation, start offshoring the "Linden" employees jobs
to India. Outside of Server Farms and Communication lines, the next
biggest expense are those SanFran employees who cost too much.
The SanFran market is very expensive and is eating up the LL profits
for SL. Lets assume SL had 500 sims generating US$1,170,000/yr in
revenue. That number alone could only employ 25 people with the
average salary of around $46,000/yr. Peanuts for a tech firm in the
SanFran area... And thats just based off the revenue numbers.
After you minus Hardware, DataCenter Costs, Building Rent, etc..
That $1/million annually is going to be trimed substantially.
I'm sure LL's SG&A costs can be trimmed way back if they layoff
90% of their workforce and outsource everything. Maybe keep a
a lead programmer to double check the work from India and give
them guidance. But everything else, (Human Resources, Call Center,
Network Operations, etc)... Send those jobs to India for 1/20th the
cost. Then watch the profits roll in and the badly needed upgrades to
SL finally get done.
Much Love,
Pink Slip Consulting Way to be concerned about the US economy....yeah outsource and put your neighbors out of work. Where do people like you come from? Have you ever witnessed the death of a city when all the jobs went away?....apparently not. May you live in VERY interesting times. |
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Shaun Altman
Fund Manager
Join date: 11 Dec 2004
Posts: 1,011
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05-14-2006 14:45
From: Aleister DaSilva Way to be concerned about the US economy....yeah outsource and put your neighbors out of work. Where do people like you come from? Have you ever witnessed the death of a city when all the jobs went away?....apparently not. May you live in VERY interesting times. One of the problems with us Americans is that we want too much money, and too high of a standard of living, for the same work that other equally qualified (or better qualified) individuals will perform much more cost effectively. Eventually the American Dream will kill America if we continue along this path of importing labor and exporting jobs. Unfortunately, it's all a question of value to the mega corporations. Foriegn labor just provides so much more value in so many situations. |
