Technology Reflections is a newsletter sponsored and prepared by Mickler & Associates, Inc. of Vancouver, Washington.  The newsletter addresses the technology concerns of small business in every day lingo and reflects on trends, issues, and tips to help your company gain competitive advantage from tech spend. Please feel free to distribute to colleagues and partners.

Work-at-Home and Online Scams on the Rise

When an economy spirals out of control, desperate conditions breed predatory opportunists. Unfortunately, today, when millions of people are only looking for hope, the Internet has become a vehicle for misinformation and fraud. On February 4, 2009, the FBI issued a warning to consumers advising of a significant rise in online scams. According to the FBI, victims are reportedly hired for "medical transcription", "mystery shopping", to "process payments", to "transfer funds", or "reship products". Victims are asked to cash fraudulent checks, illegally transfer funds, or that they'll receive compensation in the form of merchandise. Work-from-home schemes attack the extreme vulnerability and fear that many consumers face in tough times like these.

However, work from home scams aren't the only risks we face. On the Internet, consumers are bombarded by requests for personal private information (PPI); scams exploiting the generosity of others; extortion; debt elimination scams. In fact, the government's Internet Crimes Complaint Center (IC3) has cataloged a number of common Internet crime schemes that everyone in your circle - your friends, family, professional colleagues, neighbors, and particularly your employees - should be aware of.

Anyone who has suffered a loss of employment before understands the deep feelings associated with it and the intense desire to do something to provide for family, pay bills, and maintain status; even children of the unemployed are targets for fraud. In the unconnected age of history's past, frauds were isolated events that took on higher degrees of risk for the criminal because of the interpersonal relationship that needed to be built with the victim. Today, in the connected age, Internet crime is characterized by anonymity, globalization, personalization, and mass distribution - offering an extraordinary economy of scale for the criminal - all of which requires closer scrutiny and critical thinking skills from all of us.

On their website, the Federal Trade Commission offers some practical advice for avoiding classic work-from-home scams and how to report offenses. Further, IC3 offers its own complaint process for reporting suspect activities.

Meanwhile, here are a couple of good ideas:

1. Educate. Consider Covey's "sphere of influence" in your life. Who needs to know information like this, right now? Share it with them.

2. Avoid. Avoid interacting with websites like Craigslist that promote anonymity for job postings. If you must use them, extra caution and research should be employed before sharing any information with any party - even your resume. Avoid handing out information to anyone you don't know. Avoid posting too much information about you on social networking sites. Avoid handing out information freely over Internet chat.

3. Research. Many scams are documented and are known on the Internet.  Some good sites:

Computer Crime Research Center
Antiphishing.org
Trustgauge
Snopes.com

4. Protect. Install a commercial anti-virus, anti-phishing, and anti-spam product. Free alternatives: free.avg.com, www.malwarebytes.org, www.zonealarm.com.

5. Critique. Lend a critical eye to websites, email, and special offers that seem, proverbially, "too good to be true".

Russell P. Mickler, CISSP
Principal Consultant, Mickler & Associates, Inc.
360.601.0818 | rmickler@micklerandassociates.com

A Programming Note

So it begs to ask: where have we been?

I haven't published one of these in nearly ten months. I must admit that work and other personal commitments got the best of me. These days, though, we all have a little more free time, so I figured now's a good time to pick it back up. And, there's been a number of new subscribers interested in the newsletter, so who am I to disappoint? Currently, the newsletter hits about 400 inboxes.

I'm going to publish the newsletter once a month; I'm committed to the idea that I should be working, and, I'd do well to avoid becoming a spam artist. I will continue to bring you useful news and information that benefits the small business owner, the student and continuous learner, the geek within us all, and anyone generally interested in managing technology strategy.

Thanks again for your continued readership.

Russell P. Mickler, CISSP
Principal Consultant, Mickler & Associates, Inc.
360.601.0818 | rmickler@micklerandassociates.com

It Won't Get Better

I am running into this conversation daily - from students, from small business owners, from employees of major organizations, and it is difficult to tell them this. Everywhere, everyone is optimistically saying, "It's going to get better." Well, unfortunately, this is not true.

I don't wish to come across as an alarmist or a pessimist. I am an optimist and I really want to be optimistic when it comes to the economic downturn; some of the most significant entrepreneurial eras in our country's history comes from periods of recession. I want to look you in the eye and convince you that - not to fear - consumers will be back soon, money in hand, to enthusiastically buy your products and services. I want to believe that this is like every economic downturn and that, eventually, markets will rise. I want to convince you, and perhaps myself, that enough patience and persistence and cost containment will pay off. However, that would be a lie.

I've really got to be straight with you and suggest that what we're experiencing isn't an economic downturn, not just a bursting bubble, but an economic restructuring - a permanent contraction to more sustainable levels of wealth.

Let me ask you a couple of questions:

If consumers spent beyond their means and gave rise to an economy built largely on debt, is it likely that we'd return to an era of fast and loose credit to support a lifestyle beyond their means? No. That's now proven unsustainable.

If 2/3rds of America's GDP is built off consumer spending, and consumer spending is shrinking, is a declining American economy likely to attract more domestic or foreign investment? No. Retooling 2/3rds of GDP will take decades.

If 2/3rds of America's GDP is built off consumer spending, and Americans started actually saving just 5% of their annual earnings - out of fear, prudence, or fiscal caution - wouldn't that also subtract hundreds of billions from GDP and put downward pressure on economic stimulus and growth? Yes. This is likely to happen.

If energy costs - particularly the cost of oil - go up (which they will because oil is increasingly more scarce in a global market of high demand) and cheap oil is the foundation of inexpensively moving consumers to shop, play, work, and buy things... from the suburbs to the cities, will increasing energy costs yield more consumer spending? No. Living too far from central distribution hubs will be, in fact, a competitive liability.

If you're a small business owner, now is the time to ask yourself some very difficult questions.

Does your brand capitalize on the frivolous, or the excessive, the incidental, or the non-essential?

If your brand thrived in an age of abundance and depends largely on discretionary consumer spending (SUV's, coffee, special juices and mixes, subscription healthcare products, powder energy supplements and nutribars, cable, premium electronic content, pre-paid legal services, personal chefs and dietitians, landscaping, travel agencies for luxurious vacations, financial advisers, Realtors, chiropractors, technical support analysts, business consultants...) will your brand be successful in an age of thrift and security? Unlikely, and relevant recent examples abound.

Is your small business diversified with multiple fixed and variable revenue streams, automated enough to contain costs yet strategic enough with your marketing to specifically target your niche at an affordable price?

Are your employees flexible enough to work anywhere and at any time to satisfy your existing customers as quickly as possible?

Are you ready for your competition to work twice as hard as you do for each and every sale?

Do you know what separates you - makes you distinct - and what convinces the consumer to do business with you?

I really want to tell you: hang in there. It will get better. Things will be tight but it will improve. I really want to. But, if I did, or if any other business consultant does, it's got to be bunk - there is no rational reason behind how we could possibly return to the levels of consumer spending experienced earlier this decade. So I can't, not in good conscience, lie to you. I have to be honest with you as a consultant and as a business owner:

It won't get better.

Certainly not in the short term anyway. Many elements of our economy and lifestyles are about to dramatically change; for the first time since WWII, the US standard of living will fall. Thus, we will need to adjust our expectations. And you need to embrace that. Stop waiting for the return of "normal". Instead, get used to the "new normal."

Now, wherein that blunt assessment lies opportunity for you, your family, or your brand? Your relationship with your employees, or, with consumers? Everything I've mentioned sounds pretty dire - and it is - but you should also be very conscious of the strategic opportunities that those harsh realities present you with.

1. How can your brand be re-presented as low-cost, less frivolous, more conservative? Why is your brand _essential_? What is its value?

2. Think about how much abundance there is in your market. How many dentists are there? How many lawyers are there? How many IT people are there? There are an abundance of these skillsets to satisfy a market condition that no longer exists. Excess supply and contracting demand will collapse prices. How will that change your revenue stream? How will intense price competition affect your fixed expenses?

3. How can your marketing earn the highest returns? Are there better, less expensive options? What is of value from your marketing campaign? How do you measure it? How do you measure the value of bartered services?

4. How is your revenue picture dependent upon stable termed contracts, or, upon variable, spot consumer spending, and how can you change that?

5. How are your competitors different from you? What is your perceived value-adds? Are you prepared to compete in a drastically overpopulated competitive market place for fewer and fewer opportunities, which in turn leads to aggressive price competitiveness? How are your margins looking these days? What can you offer your customer than just the lowest possible price?

6. Maybe sales don't need to go up, they need to go out. You need to diversify. Take a risk in complementary business activities. Partnerships and joint ventures. If you have capital, more returns may be earned from taking a strategic initiative than to resink it into creating conditions for those "higher sales" that won't come.

7. How is your business sustainable, and, how can it lower energy costs over time? Telecommunication costs? Rent? How can it get lean fast?

8. Are your employees prepared for self-directed activities? Freelance employment? Multiple jobs? Are you prepared for it? Is your family prepared for it?

You see, I really don't think I'm a pessimist. I do think the survival of your small business - or even the student, the hourly wage-earner, or the working professional - has less to do with waiting and hoping for the best but more to do with seeing things as they really are.

What we're experiencing is a dramatic, systemic change that has come around as a result of our own inaction as a culture, and it's not likely to improve quickly.

Taking urgent action now - with clarity of thought and purpose - is what will allow you to retool yourself, your business, your stakeholder's expectations, and your customers, in preparing for the new era of scarcity. Especially right now, as everyone is holding their breath, worried, anxious, and waiting... waiting for it to get better. And that is the worst thing you can do in a time that screams for action. Now you have a competitive edge. You know now that it won't get better. So start planning for it.

R

Russell P. Mickler, CISSP | MCSE
Principal Consultant, Mickler & Associates, Inc.
360.601.0818 | rmickler@micklerandassociates.com