Schrödinger’s Business Cat

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At this stage Quantum Physics is mostly theoretical (is there any other kind) with no guarantee that the theory may always work, but therein lies its’ beauty. Quantum physics is all about probabilities and supposed randomness. It deals with unseen energies to enhance the probabilities in the business, or in terms that business owners prefer – potentiality. Is there anyone in business who doesn’t feel there is potentiality in what they do? Generally we get into business because of the potential we see in it.

So let’s look at a couple of principles of Quantum mechanics.

When physicists use quantum mechanics to predict the results of an experiment, the only thing they can predict is the probability of detecting each of the possible outcomes. When we do marketing plans, projections, cash flows and such the only thing in business we can predict is the probability of success in each of our fields. One could argue that marketing agencies mainly work in the field of probability and marketing in a business, whether you are a 1 man band and doing it yourself or a multinational, works solely on probabilities, measuring them and mitigating risks to increase the probability of success. No matter the industry we all work in probabilities.

A particle’s state cannot be determined until it is measured. The weird supposition in all this is that a business’s success needs to be measured. How each business or person relates success is a personal choice. Success may be measured in terms of $$ or how you enhance someone else’s life or simply by the amount of time you get to spend with family, friends and pets. Which brings us to cats, specifically one cat…. Schrödinger’s cat. The popularity of shows such as Big Bang Theory (now I’m thinking about trains), has brought this theory into relative mainstream thinking.  Contrary to popular belief it wasn’t just a cat in the box, it also included variables…poison, a hammer, a Geiger counter and some radioactive material. So until someone opened the box and observed the system, therefore measuring and collapsing the system into 1 reality, the cat is both alive and dead.

Measurements are so important in business. Sometimes we all get so tied up in our business, our lives, other people’s lives, that we forget to take stock of what we are doing. There is no doubt that businesses can be viewed as Schrödinger’s theoretical cat. There are variables that can affect what we do and it is these variables that we need to try to predict- competition, GFC’s, policy changes. Sometimes we just don’t know how our business is going, until we measure it. Neil Bohr took this a little deeper through his Copenhagen interpretation, which asserts that a particle is whatever it is measured to be (for example, a wave or a particle), but that it cannot be assumed to have specific properties, or even to exist, until it is measured. So in business perhaps success cannot be deemed to exist until it is measured.

What physicists do is try to predict the probability in each outcome- and I think that is what we do in business. Not only try to predict the outcome but we mitigate risk and follow the path with the most chance of success. There is no doubt business is unpredictable, like particles at the quantum level.

As business owners is there a way we can predict business outcomes? Measuring the success of past experiments is as good a place as any to start.

So we have probability and we have measurement. My last thought on this matter is as controversial as any – the Many-Worlds Theory.

According to a hypothesis devised by quantum physicist Hugh Everett, we live in a universe — or more accurately a multiverse — where timelines are constantly branching off and creating distinct and coherent worlds, each experienced by a different version of you It holds that as soon as there is potential in any object, there is potentiality for a series of parallel universes, with each universe containing a unique single possible state of that object. Strangely there is interaction between all these universes, that somehow permits all states to be accessible in some way and for all possible states to be affected in some manner. Stephen Hawking advocates this so it can’t be discounted.

It seems there is little doubt that the Many Worlds Theory can be related to business. Every decision we make, every meeting we have, every interaction we have with staff, clients or stakeholders can have a myriad of potential outcomes.

So whilst Quantum Mechanics is still theoretical, so too is business and what we can learn from it – the way we conduct our businesses on a day to day basis is limitless.

The Trickle Down Effect – the Benefits of the Development Ecosystem

Posted by on 10:24 am in IBN News | 0 comments

It has often been said, and whinged about, that developers make so much money. This is certainly a superficial view of it and though partly true, there is far more to it than simply building and making money. Certainly the development landscape is littered with far more spectacular failures than it is with resounding successes. But let’s for now concentrate on the successes.

Who benefits? Well certainly the developer for one. But what is the trickledown effect?

A developer may have between 2-50 employees (more for some big players). Each of those staff receive a wage, they go home to their families and with that money earned from the developer they buy food, they send their kids to school, they purchase property, they put petrol in their cars, they drink coffee, they do their part to keep the economy moving.

The builder makes money. They are generally, though not always, separate from the developer. They too have staff and families of their own. However here another trickle starts. They have subbies. Those subbies have to buy specialist gear- work boots etc. They also spend well in the economy. How well does the Ute/SUV trade do out of tradies?

Manufacturers- someone needs to make the nails, timber, tilt slabs etc.

Plumbers, electricians, suppliers….. all make a living.

Then the background that few people see or take notice of. Lawyers- some needs to do conveyancing. Quantity surveyors, valuers, architects, mortgage brokers- they all generally have staff and do their part in keeping the economy moving. Of course there is the banks or private lenders- they have the potential to bloom or bust our economy. Love them or hate them, lenders help keep this country growing.

We have real estate agents- they market and sell the properties.

And finally we come to the end user- if you own, or aspire to own, property, then you are ultimately the beneficiary of the success, or failure, of the developer. The person with the original dream who turned a thought into action. And if you make a profit from your property then you probably have a developer to thank.

Potentially there are hundreds of people affected and in some way, reliant on what the developer does.

The guy I buy my coffee off can, in some small way, thank a development we funded in Footscray for being able to employ his 6 staff. As it is Australian grown organic coffee there is another industry spawning- all part of the development ecosystem.

Whether we realise it or not we are all a part of an ecosystem and an ecosystem works best when it is fed. In business we are all reliant on each other even if we can’t initially see the connection. So when you are buying your coffee, putting petrol in your car or getting your hair done take a moment to reflect on the fact that we are all connected- dozens, hundreds, even thousands are affected by your choices today.

Take care of what you feed your ecosystem and your ecosystem will take care of you.

Remember this:

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Thomas Edison quote - IBN

The little black ad-dress lenders can’t resist

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by Fiona Roberts, Chief Operating Officer, IBN Direct: Alternative Funding Solutions

Appearing originally in the Urban Developer magazine, Issue #91, Sept/Oct 2014

Units and townhouses are the property market ’s new ‘Little Black Ad-Dress ’, netting premium returns and 70 per cent funding options , leaving Aussie dream homes sitting on the rack.

UDIA article blog

Private lenders – high net worth families, superannuation funds and managed investment schemes – are financing the growing demand for high
density housing without a single pre-sale.

Scott Roberts, whose alternative funding company IBN Direct sources private investors, said apartment popularity was simple: units were in fashion and moved fast.

“I have lenders that just won’t finance houses,” said Mr Roberts, whose national business – based on the Sunshine Coast – has access to up to 200 private funders nationwide.

“And that’s because units and townhouses are easier to sell – the stock turns over quicker.”

He said while houses were still the ‘Australian dream’, the unit market was not only an easier point of entry for new owner-occupiers, but for first-time developers as well.

“The biggest selling points for us is that everyone has been conditioned by the bank that they need pre-sales and that is our big point of difference,” the 46-year-old said.

“But when you’re building townhouses many of our funders do not require any pre-sales compared to banks which will require up to 100 per cent pre-sales to have 100 per cent of their risk covered.

“And when the developer doesn’t need to sell off the plan, buyers will pay a premium price because they’ve been able to walk into the unit, go out on the balcony and take in the vista – and virtually every unit these days has a view of oceans, rivers, cities or mountains.”

Mr Roberts, who was a state manager of a leading aggregator before starting IBN Direct 10 years ago, said private lenders were plugging the finance gap as the major banks knocked back an average of eight out of every 10 development deals that landed on his desk.

“We had one case where a developer with a multi-level project near the Brisbane CBD – who had a nod and a wink from their bank that they would fund the deal – started the project themselves only to run out of money and have the bank change its mind,” he said. (more…)

MFAA 2014 Economic Outlook Lunch

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As Gold Sponsor of the MFAA Queensland, IBN Direct are hosting a table at the 2014 Economic Outlook Lunch on Tuesday, 9th September 2014.

Being held in the Portside Wharf complex on the banks of the Brisbane River at Hamilton, the lunch will feature guest speaker Stephen Koukoulas. Stephen has an extensive economic background and will offer a rare insight into top line economic trends that will impact the Australian economy and also delve into housing affordability.

Stephen, also known as “The Kouk”, has presented around the world, speaking to Money Managers in over 35 central banks. He has been a Senior Economic Advisor to the Prime Minister and the Chief Economist to two major banks and he regularly appears in the media for the ABC, Sky TV and various radio programs.

The event, which includes a two course lunch and beverages, will also feature a MFAA Marketing updated form Stephen Hale, Head – Marketing & Communications, covering the great new MFAA Marketing initiatives now available to members. Information and registration for the lunch is available by clicking HERE.

Announcing Exclusive Gold Sponsorship of MFAA (Qld)

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IBN Direct: Alternative Funding Solutions is proud to announce Exclusive Gold Sponsorship of the Mortgage and Finance Association of Australia (MFAA) in Queensland for the 2014/2015 fiscal year. The MFAA is the peak national body providing service and representation to over 10,000 professional credit advisers (mortgage and finance brokers, mortgage managers and aggregators) to assist them to develop, foster, and promote the mortgage and finance industry in Australia.

As long term supporters of our business, we are thrilled to be partnering with the MFA in what promises to be one of our most exciting years yet!

GOLD Sponsor at the UDIA National Congress

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IBN Direct: Alternative Funding Solutions were proud GOLD Sponsors of the UDIA National Congress in Brisbane last week.

At our stand in the Exhibition Hall we had some fantastic prizes up for grabs –  a set of Adams “Tight Lies” golf clubs, a bottle of Bollinger and a remote control Ferrari!!

And the winners are…..

Golf Clubs – Kelly Walsh, Rivergum Homes Group

Bollinger – Mark Brady, SSKB

Remote control Ferrari – Andrew Perkins, Oliver Hume Real Estate Group

Our team enjoyed meeting the many Congress delegates and hosting one of the Study Tours to Hamilton – An Urban Renewal Destination.