Russ: Good morning. This is the Business Makers Show, heard here and online at thebusinessmakers.com. This is that show about the people that-you know-when you cut through all the noise and the hype, they are the ones that most positively affect our lives.

John: My advice to them is to keep their head down and keep on doing what you're doing and hopefully, this will all pass.

Russ: They're going uphill against the wind, I'd say.

John: There are.

Russ: But they are very, very important.

John: Yeah.

Russ: Here's our lineup for this morning. First up for the Aflac Business Makers Flashback, earlier this week, Christian Thilmany visited me in the studio. He is a user experience architect with Microsoft, also known as an architect evangelist. His focus these days is BisSpark, the cool Microsoft program that's designed to work with service partners and software startups, as well as helping startups get connected. Then for our featured guest segment, I had the opportunity just a few days ago to visit with Jason Pontin, the editor-in-chief and publisher of Technology Review, the 100+ year old publication owned the Massachusetts Institute of Technology and known as the authority for the future of technology. But first-That's right, it's time for the Business Makers School of Business, and this is that curriculum that John and I put together every week through a very rigorous process to do everything we can to make sure it's not business as usual school.

John: Well, it's fresh stuff, and I've never ceased to be amazed by the new information we get every week. I'm mean-it's just fresh as fresh can be.

Russ: That's right, yeah, and we kick it off each Saturday morning with the quote of the day, and this morning's quote comes from Samuel Goldwin.

John: Ah yes, the movie guy.

Russ: You bet. Here it is. "I don't want yes men around me. I want everyone to tell the truth, even if it costs them their jobs."

John: Yeah, right. I like that. You want people around you like that.

Russ: You bet, people that are willing to lay it on the line, man. That's right.

John: Yeah, right, and even sacrifice their livelihoods for it.

Russ: That's right.

John: That's what you call a true passion, yes.

Russ: All right, and that brings us to this week in business history. What kind of history lesson do we have this morning, John?

John: Oh, we got a lot of stuff here. Starting in 1626, this week in business history, the Indians sell Manhattan island for $24, and the cloth, and buttons, and wampum, and stuff like that. Now, an interesting topic, but who did the Indians buy it from?

Russ: Good point, yeah.

John: I don't think they did. I think, if anything, they probably conquered it.

Russ: Conquered it? They probably did.

John: There probably could've been other Indians there. He would say hey well-

Russ: So the ones that sold it are the ones that probably got the real good deal.

John: Yeah, right.

Russ: And then the next guy had to pay $24.

John: Yeah, they conquered it, and then they sold it for $24. That's a pretty good profit.

Russ: It is in those days.

John: This week in business history, in 1885, Good Housekeeping magazine is first published. That's amazing.

Russ: Yeah, it is. 1885?

John: Their publication has done a lot for helping people decide what to buy. This week in business history in 1893, Cowboy Bob Pickett invents bulldogging.

[Music: "Rodeo"]

Russ: How do you invent something like that?

John: I bet I know what it was. He was on his horse. He was drunk, and he fell off next to a bull. He thought if I'm going to do this, I might-as-well do it for a living.

Russ: That one epitomizes how tough rodeo guys are.

John: I know. This week in business history, in 1900, Galveston, Texas was hit by a hurricane. 6000 people died. They made a book about it. They've done countless documentaries. I mean-it was just awful.

Russ: You know-we don't have catastrophes like that anymore. We get all excited when a few people die and stuff, but man, this was huge compared to anything that happens these days.

John: Oh yeah, I know, it's a-

Russ: This is bigger than Chernobyl, Katrina, some of the volcanoes, all that stuff combined, 6000.

John: I know-6000, that's more than were killed at Pearl Harbor. Okay, this week in business history in 1912, Soviet communist newspaper Pravda begins publishing.

Russ: Are they still publishing?

John: I think there is a Pravda. I think there really is.

Russ: Yeah, yeah.

John: Okay, this week in business history, in 1918, General Motors acquires a Chevrolet motor company of Delaware.

Russ: And that's when they hired Dinah Shore, right?

John: Dinah Shore, right, yeah.

Russ: To come onboard to sing that song.

John: To sing the U.S.A. in your Chevrolet.

Russ: That's right.

John: This week in business history, in 1933, James Brown, the godfather of soul, is born in Augusta, Georgia.

Russ: The hardest working man in show business.

[Music: "Cold Sweat"]

John: This week in business history in 1940, the birthday of Eric Burdon, singer for The Animals.

Russ: That's part of the English invasion, right?

John: That's right, and that was a great song, The House of the Rising Sun, one of my favorites of all time.

[Music: "The House of The Rising Sun"]

John: This week in business history, in 1940, Winston Churchill becomes prime minister of Britain.

Russ: And boy, did he do a good job.

John: And helped save the world. Okay, this week in business history, in 1941, Joseph Stalin becomes Premier of Russia. Now, there was a psychopath if there ever was one.

Russ: And turned on the heat, and had everybody turn everybody turn everybody in else, right?

John: Oh, yeah, he's reputed to have killed more of his own people than Adolph Hitler did. Okay, this week in business history in 1941, Glen Miller records Chattanooga Choo-Choo for RCA.

[Music: "Chattanooga Choo Choo"]

Russ: Seems like we kind of like Glenn Miller songs.

John: Yeah, he's good. You know-I like Glenn Miller. This week in business history in 1944, Peter Staples is born. Now, this guy's a rocker with that one hit wonder group The Troggs, and we all know their famous song is-

[Music: "Wild Thing"]

John: Okay, this week in business history, in 1952, Mad magazine debuts. I'd say that's been a pretty successful magazine.

Russ: I bet you were a fan, weren't you?

John: Oh, I loved it, yeah. They used to do those parodies on movies and TV shows. One of my favorite ones was Flipper. At the end they found out that Flipper was actually Lassie in a dolphin suit.

Russ: That's great.

John: Okay, this week in business history, the Pulitzer Prize is awarded to John F. Kennedy just before he became president of the United States for a book called Profiles in Courage.

Russ: Now, that was a good book, and that's a good theme.

John: Yeah, everybody talks about how good the book was, but when I ask them if they ever read it-

Russ: I have.

John: You have, you actually read the book?

Russ: I think I had to in high school.

John: Oh, okay, all right.

Russ: But it's good, because it always show political guys that are going against the mainstream, against their own party. I don't think that happens anymore.

John: Okay, this week in business history, Alan Shepherd becomes the first American in space. All right, let's light this candle aboard Freedom 7.

Russ: Yeah, and that was huge. He doesn't get enough credit. I mean-I thought-

John: I know he doesn't.

Russ: Yeah, I thought it was a big deal, our first guy up, but then they immediately want to start talking about the first guy that orbited, and they just kind of blew him off, it seemed like.

John: I know-because it was a flyby. He just went up and came right back down.

Russ: But still, he did it.

John: This week in business history in 1953, Martin Luther King, Jr. delivers his I Have A Dream speech. Wow.

Russ: What a speech.

John: It was a-yeah-that was a great speech. This week in business history in 1966, another one of my favorite groups, The Mamas and the Papas, Monday Monday hits number one.

[Music: "Monday Monday"]

John: Coming up here is-I think-one of the sad moments in broadcasting history because this week in business history, in 1971, the national public radio begins programming.

Russ: They're kind of interesting now because they get government money and now they have sponsors too, right?

John: Yeah, right.

Russ: Here we are just serving sponsors. We've tried to get some government money, but it doesn't seem to be happening.

John: Well, I'm glad we didn't, because they could've come in and fired us.

Russ: They would start controlling how much we get paid too.

John: I know, right. This week in business history in 1972, J. Edgar Hoover dies, head of the FBI. Reputed cross dresser, he was 77 years old at the time. Even though a lot of people make fun of him for all that alleged cross dressing, and all that, he did do a lot to reform the agency back in the mid '20s and '30s.

Russ: He was pretty tough -you said reputed cross dresser. We don't know for sure that he was?

John: Well, I don't think there's anybody that's-

Russ: No photos?

John: I don't think there were any photos of him.

Russ: Yeah, okay. I imagine he would've been not an attractive cross dresser.

John: Most men are not.

John: I know, all right. This week in business history in 1982, IBM releases PC DOS version 1.1.

Russ: Wow, this 1.1 means okay, we're going to fix a few things and make it a little bit better. It was a happening time. Mr. Gates was doing okay. He didn't have all the momentum that he's got going for the prior years, but he was doing okay.

John: Okay, and finally, this week in business history-actually, you have to go back a few weeks before this week in business history-and Gary Hart was alleged to be having an affair on his wife. And he dared the reporters to follow him around-you know-because he flatly denied it. Well, they did follow him around, and his picture, along with Donna Rice shows up in the front of a few tabloid magazines aboard the ship Monkey Business. There is Donna Rice on his lap, and Gary Hart looking like he's had five drinks too many, and the rest is history. It ended his presidential race quite emphatically.

Russ: So, this week in 1987 was when he threw in the towel, ay?

John: Yeah, he threw in the towel. He should've thrown in Donna Rice, uh, in the ocean.

Russ: You can't make this stuff up, man. What do you need fiction for when you got this, man?

John: I know-what do you need serious news for when you got this to laugh at?

Russ: I know-I mean-I wonder when he got on the boat, "Let's choose this one over here. It's called Monkey Business." All right, great history lesson. We really appreciate it, and continuing on with the School of Business, that brings us to our vocabulary lesson called navigating business jargon, where we do our best at helping our audience understand the new terminology. We present it in contest format, where I get to choose the word, and then I say the word and then John is challenged with guessing the meaning.

John: Guessing the meaning, yes. I don't know the word, or the phrase, or whatever it is you're coming up with.

Russ: I'm coming up with a phrase today. I think you're going to enjoy it. I think you're going to get it. You ready?

John: Yeah.

Russ: All right. Here it is, cost shifting.

John: Cost shifting. Okay, that's when you, uh, have costs set up for one thing, and then you find out there's something better out there you want to spend money on, so you shift the costs to that thing. And the other thing dries up.

Russ: I don't know what that means, but I'll tell you what the cost shifting in the jargon world means. I think you'll agree with it. It says, moving the cost of a good or service from the person who incurred the cost to the person in a better position to pay.

John: Oh, okay.

Russ: This happens quite a bit, quite often in healthcare, and regulated industries, and incomes taxes, in funding the government.

John: Yeah, right now the top, what, 5% of the tax payers pay 60% of all the taxes.

Russ: Cost shifting.

John: Bottom half doesn't-they don't pay anything.

Russ: That's right.

John: Which is really anti-constitutional because-you know-the American Revolution was promulgated on the no taxation without representation. Well, people should not have representation if they're not being taxed, which is what's going on now. One is just as unfair as the other, in my book.

Russ: That's right. All right. Good point. Okay, and that brings us to dumbest moments. Do you have a story for us this week?

John: Oh, this is a dozy, back from the old dot com era.

Russ: All right.

John: And here we go. These two guys are born in Sweden, in 1970, Kajsa Leander and Earnst Malmsten. And together, later on, in 1998, they decide to get some investment money from JP Morgan to invest in their new company boo.com.

Russ: Boo.com.

John: A high-fashion e-tailer. We all know about these e-tailers.

Russ: Oh, yeah.

John: They start with about $135 million.

Russ: That's good. That's a good start.

John: That's a lot of money. I've got an itemized list on it, because you see that they were really smart and really focused in making sure their company would be a success. The $150,000 annual salary for the founders. Then $100,000 apiece to rent apartments in London, and then another $150,000 to redecorate them, $654,000 on promotional giveaways like disposable cameras and snow globes, $600,000 in public relations fees to Hill and Nolton mostly for setting up luncheons with fashion editors, $42 million ad campaign. A staff of 100 people also known as the boo crew, housed in offices spanning from New York, to Paris, to Munich, to Stockholm, and $5000 a day to a crew of fashion consultants and hair stylists to perfect the look of Ms. Boo, the site's computer mascot. They start beginning advertising on TV and print in '99, in anticipation of June 21st launch. The site isn't ready and doesn't go live until November. Later on, they launch on November 3, 1999. Everything's riddled with glitches. Less than one week later Federated Department stores reportedly goes back on its pledge to invest $10 million in the company. And it just gets worse, and worse, and worse. These guys had no business being in business.

Russ: They just ran out of capital. I can't believe they didn't buy their own airplane though, man. Why didn't they do that?

John: I don't know. Maybe it's in there.

Russ: I think that's why they failed. And before we wrap up this morning's School of Business, it's time for the very popular PKF Texas, the Entrepreneur's Playbook. Let's welcome Mr. Greg Price on the piano.

John: On the piano.

Russ and John: A one, and a two, and a-

[PKF Texas - The Entrepreneurs Playbook]

Russ: All right, and that wraps up this morning's School of Business. You're listening to The Business Makers Show, heard here and online at thebusinessmakers.com. Stay tuned in for Christian Thilmany with Microsoft, followed by Jason Pontin, the chief editor and publisher of Technology Review.