State of MGX – 08.03.11

State of MGX

In the last State of MGX, I wrote heavily about what type of printing company that we wanted to become. We would push ourselves to be a company that understood what the potential of printing could be. Since that time, I believe everyone on the team has gained a better understanding of what that means, and how we would get there.

A lot of my time is spent trying to craft a plan as to how we can move forward and grow as a company. For the past 2 years, I feel that we have done fairly well in this regard. We have continued to be a nimble, aggressive company that seeks out new opportunities. Everyday has been new and filled with exciting challenges. In the last 6 months, our company has tripled in size, both in production capacity and personnel.

In addition to this, we begun to take steps that will really build up our internal systems, such as in the realm of software, standard operating procedures, and human resources. Perhaps the most important area of growth has been in how our customers perceive MGX Copy. With a constantly improving website, production facility, and email/telephone presence, we have been attracting a larger and more affluent client base that trusts our ability to fulfill their orders.

As we continue forward in trying to attain our goals, I wanted to again, put down in writing, a general sense of direction as to where we are headed. As always, I welcome as much discussion as possible, and I would love to hear your thoughts.


As we continue to grow, I would like to speak about a concept that is near and dear to me – the concept of Phronesis.

Phronesis is a complex subject, and it is something that I have spent a considerable amount of time trying to understand. In Aristotle’s work on ethics, Aristotle spoke about Phronesis and described it as the “capability to consider the mode of action in order to deliver change, especially to enhance the quality of life.” The simplest definition I have heard is that Phronesis is “the virtue of practical thought” or “Practical Wisdom”.
Imagine if you were an archer. Your goal would be to fire an arrow straight into a target 75 feet away. In this situation, there is really only one way to be successful – make sure that the arrow goes straight into the bullseye.
Think for a minute, however, all the different ways that you could possibly not be successful.
An archer, when they try to hit the bullseye, needs to compensate for myriad variables. The weight of the arrows, gravity, wind resistance, distance, strength of the bow, vision, and even muscle fatigue. The archer has a million ways to miss the target, but only one way to be successful. As it is in real life – it is infinitely more difficult to hit the target than to simply miss it.
At MGX, we need to consider Phronesis in order to make the proper decisions every time. At MGX, the strength of our bows is the feasibility of our ideas, wind resistance is our budget and cash flows, and gravity is our customer’s preferences and perceptions of us.

I challenge our staff to become “phronetics”. Everyday, we are presented with a new set of decisions with complex dependencies. Before you make a big decision, ask yourself –
-Is this what we want?
-Who will gain and who will lose?
-Where will this decision take us?
-What should we do?

Having a clearer understanding of our situations and the impact of your decisions will help drive us in the right direction.  If we take the time to apply honest practicality into our decision making processes,  I believe it will help us continue our pattern of success.

Why Paper?

A lot has been made of the decline of print and the decline of paper usage. There are certainly some elements of truth to that statement, however, I believe that we are in a select group of businesses that will be able to adapt to these changing market conditions and thrive.

I have done a lot of research on this topic, and I truly believe that usage of printing and paper can be more compelling than ever – it just takes an innovative company such as ours to show people this.
First off, paper is the only marketing medium that is easy for recipients to hold. Studies have shown that when you increase the amount of senses that are involved in an experience, the better the comprehension and results. To be able to hold a message in your hands is something that is unique to the printing industry.
“In a Neuromarketing study conducted by Royal Mail through Millward Brown, it was reported that direct mail triggered more activity in the parietal cortex, which is associated with the integration of visual and spatial information. This suggests that print-based material may be more easily integrated into the brain. Because we can see and touch paper, it’s seen as more concrete, and can act as a cue for memory. Subjects also formed more connections between the printed material and their own memories and personal experiences. In contrast, online materials elicited responses in the temporoparietal junction, which has been associated with filtering out irrelevant information.
Jakob Nielsen, Web-usability expert, has also commented on a ‘filtering’ through studies in which he monitored the eye movements of people reading web pages. “The online medium lends itself to a more superficial processing of information. You’re just surfing the information. It’s not deep learning,” Neilsen notes.”
Knowing how the brain responds to a printed product, it is not surprising to know that direct mail generates the highest response rates. Targeted direct mail has been shown to have results in single or even double digit figures, while broadcast media(such as radio and television) have been shown to result in response rates measured in the thousandths of a percentage point. Paper helps people learn better and comprehend better. When we apply this to helping our customers improve their marketing, we can see how this could be a great combination for success.
In a recent Pitney Bowes survey, 81% of people still read the advertising mail that they receive. Compare that to spam emails which are typically deleted immediately. Last year, 85% of businesses reported that they were pleased with their direct mail response rates – leading us to believe that those businesses were able to establish and maintain a positive return on investment through their direct mail campaigns.
The argument that I hear most frequently against paper is that it is not considered to be “green”. The problem with that argument is, that it is simply wrong.
The paper that we source at MGX Copy is almost always FSC Certified. In addition to the FSC Certification, all the paper we use comes from paper mills that get their wood pulp from forests that are managed, and replanted. Simply put, our paper comes from “tree farms” – the more paper we need, the more that they will plant. The perception that paper production results in the destruction of rainforests is really quite off base. In addition to this, paper is one of the most recycled products in the world.

Basic communication may change, due to cost, capabilities, and ease of use, such as the wide adoption of email. However, with the benefits that printing offers, we can see that it can be a more impactful, more emotional medium. In the future, MGX will care less about how much of something we can print, but rather how many people we can impact with printing, such as with Fresh Prints.

Fresh Prints

The last time we spoke about Fresh Prints, it was still in its infant stages of growth and planning. As of right now, much of the foundation has been set, and the application itself is beginning to take shape. It appears that we are still on our rough schedule of having a feature functional application ready by the end of September.
I wanted to share the possibilities that are afforded to us by entering the personalized, consumer printing market, as well as some of the possible integrations that we may have when we transpose some of the technologies into the corporate printing market.
Fresh Prints, as it stands right now, will be an online photo album creation tool. Users will have the ability to create their own digital photo albums that can be shared or printed for keepsake and entertainment purposes. Fresh Prints will also have the capability to change how personalized media products are created and distributed among people. Not only will our software allow for creative collaborations among members in a group, but workload sharing and personal input will also be supported. To clarify this point, I’d like you to think about how much more engaging, emotional, and fun it is to have friends or families, team members or co-workers, all working together on a photo project if they so choose. Imagine the applications that we could build towards, such as calendars, collages, and even yearbooks!

The software that is currently being developed is an online preview tool that shows how your pictures would be laid out on a page if you were designing your own photo album. With the code that is being written, we should be able to expand the possibilities of that platform into the corporate printing market.
Imagine if you will, the possibilities that the Fresh Prints platform provides for our corporate customers. The Fresh Prints application allows for adding and removing content, such as text. In many large corporations, there are “shell” documents that basically outline what the templates should generally look like. These can be applications, location specific documentation, and even business cards. Many large companies need a place where they can go to order these products, customize it slightly, and have it printed and delivered to their location in a quick, professional manner. We would be able to start offering a centralized ordering platform for large organizations that are greatly interested in efficiency.

Currently, the products that generate the highest amount of revenues for MGX Copy are booklets. Wouldn’t our customers stand to benefit greatly if our website could show a preview of what their booklet would look like prior to printing? Wouldn’t we be able to eliminate a huge number of samples and layout requests with an online digital proofing system? Wouldn’t we be able to help curb the number of full bleed questions and full bleed issues when we can show an online preview of what their file would look like when it is actually printed? The customer service and sales team will have a very powerful tool in helping to shape customers perceptions about the product that they will be receiving. It should go without saying that MGX will likely benefit greatly in regards to revenue and a more positive customer experience after we implement these systems.

From Print Shop to Business Solutions

The way that our customers have interacted with MGX will change dramatically starting in the next few weeks. Customers have always had to find our services when they realized that they had a need for printing. They would contact us, and we would help answer any questions they have had.
With a greater emphasis on attracting new customers directly, we will begin to start teaching and informing new customers about our products and services. It’s been no secret that we have had one of the most compelling printing businesses in San Diego because of our combination of quality, great service, quick turnaround, and price. The problem with being a startup company is that we are not yet as well-known as we would like. The sales team will push to make inroads on this issue by going out, meeting customers, and gaining their trust.

I have shared with the sales team the exciting possibilities of a new service that the Post Office now offers – saturation mail. Saturation mail allows us to send out direct mail pieces on behalf of our clients, at a lower rate than what bulk mailing rates currently charge. What’s meaningful about this new mailing service is that we can now hit residences with location specific, targeted mailing campaigns in a manner that is even less expensive than before. Saturation mail will provide value to any type of business that needs to attract customers in its local vicinity.
As we begin to approach new customers with our newfound capability to target specific locales, our company will begin a meaningful transition. No longer will we just be a printing company, but rather a print marketing solutions provider that helps companies attract and grow existing customer bases through print media.

As exciting as these ventures will be, and as fruitful as they will become, we have to maintain our even keel and maintain proper phronesis as we pursue these goals. Saturation mail cannot be the focus of what we offer, at least not yet. Too much of our company, from our website, to our image, to our marketing, and even down to the way we speak and think, revolves around us being a printing company. This may be a paradigm that we are used to and will eventually transition away from. But at this point right now, we will have too difficult of a time competing and speaking about print marketing. The transition to become a business marketing solutions provider will take time, effort, and a few stumbles before we will accumulate a strong enough customer base to sustain our revenue requirements. Make no mistake – we will get there. But we need to make the transition in proper time in order to keep our credibility with our current, as well as our new customers.

As it stands right now, sales from MGX Copy come directly from the website and online advertising efforts. We will maintain and continue growing this segment of our company. Our outside sales team and its budget will be independent of our Google and Microsoft advertising budgets. I have found that a quick, hard transition in regards to sales, is rarely successful. It is best for us to continue doing what we do well, while trying to grow a new piece of the pie.

Final Thoughts

Starting MGX Copy required a huge investment in equipment and machinery. With 3 fully operational, high quality/volume digital production presses, we are now able to handle a volume and variety of print orders that we were previously unable to do. In support of these production presses, we have either purchased or continued maintenance on new bookletmakers, paper cutters, and paper folders. Investment in equipment from here on out will likely seek to improve the quality and speed of our current offerings, not necessarily to develop and offer new products altogether.

I believe we have also made a smart business decision by outsourcing our perfect binding jobs. Without the relationship that we have developed with International Bindery here in San Diego, we would need to bring on a trained operator, plus invest in a perfect binding machine and cutter. What would add to the complexity already generated would be the labor that it might take to complete these jobs. We will look to bring perfect binding in house after we have secured steady orders of over 10,000 books a month.

The last couple of years should be characterized as setting the vision, foundation, and equipment base to support MGX Copy to grow into the future. Now we are in a phase where our investment is in our people and we have since added additional software engineers, sales staff, customer service staff, and production staff.

I believe that a struggling company looks at the human element of a business, and thinks about them as a necessary cost. I believe that a growing company looks at the human element of a business as a source for growth and inspiration. With the new people that have joined the company, I expect that they will bring about great new ideas and great new viewpoints that will only seek to help propel us into the future.
I’m more excited than I have ever been with regards to the opportunities here at MGX Copy. Our company is sprinting towards a new future – one that is filled with Fresh Prints, new corporate offerings, and a team of core members that will strength and develop our company.


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State of MGX – 10.27.2010

State of MGX

There is always an urge to start all my “State of MGX” letters with “things have changed dramatically in the last few months”. I don’t write that, but it almost always seems that way. I consider it a great thing that we have always been a company that is nimble and aggressive in seeking out new opportunities.

In this letter, I try to lay out some of my thoughts so you will have an approximate idea as to where we are, and where we are heading. I also hope to elaborate on some topics that will help to explain the rationale behind some of our business choices. As always, I welcome as much discussion as possible, and I would love to hear your thoughts.


MGX Copy

As I was about to flip through the October 2010 edition of American Printer Magazine, a certain line on the cover page jumped out at me – “Serving Senior Executives in Commercial Printing Since 1883”. It’s shocking to think that a printing publication has been around for nearly 130 years, and perhaps more shocking to think that the printing press was invented over 500 years ago.

Printing is such an old industry.

But as old as printing is, the industry has not settled down, and is in the midst of major transformation. The biggest transformative elements I believe are the diminishing reliance on static printing, as well as the continued consolidation of industry into a few large online print retailers.

A few months ago as I was trying to gather my thoughts about the future direction of MGX Copy, as well as the other potential growth avenues, I tried to simplify down to the core as to the essence of what printing was about. The simplest answer I could come up with was that printing was a medium by which information could be effectively disseminated. This seemed to be a basic, if overly broad answer. However, if we view printing as a information dissemination medium, we can see heavy encroachment from competing mediums and industries.

There was a time where print was the only option for cheap mass marketing. Now, the cheapest medium is, and may always be, digital. As communication mediums, email, websites, and text messaging exhibit extraordinarily low operating costs and are arguably just as good if not better than print, what is print to do?

There has been a significant decline in print demand, as evidenced by the scores of traditional offset printers going out of business in the past few years. Companies and organizations are cutting down on their print marketing campaigns, especially since the internet has provided a robust medium by which much of the same information can be hosted. As digital solutions have provided our customers with a lower cost alternative, I have noticed a growing dissatisfaction with traditional printing pricing structures and models. I will discuss our response to these momentum shifts later.

In Peter Kaufman’s book Poor Charlie’s Almanac, there is a poignant story that has always stood out to me when I look at the state of the printing industry. The passage speaks about the time when people in the textile industry came to textile owner Warren Buffett and said “They’ve invented a new loom that we think will do twice as much as our old ones.” Warren promptly responds to say that he hopes that the new loom will not work, because if the new loom is as productive as the people claim, Warren will close the textile mill.

What was Buffett’s reasoning behind this statement? The reasoning was that the textile business has a heavy emphasis on a much commoditized product. With larger productivity increases, the benefits would go to buyers of the textiles – not to the owners of the looms.

There are some obvious parallels that we can draw between the textile industry and the printing industry. Both are mature industries that have products that are being driven by increasingly better and more productive capital equipment. It will be a major goal of mine to ensure that we do not focus on selling a much commoditized product, competing against non-differentiated companies simply selling on price, running more and more productive machines that engage companies in pricing wars with each other, all the while requiring heavy capital investment. At the sign of any downturn, the profits will dry up, and solvency issues will arise, which we have witnessed and are witnessing today with traditional offset printers.

As tumultuous as the past few years have been for printing, there have been a few green shoots, and I would like to highlight these green shoots.

 The growth sectors in printing have been mostly in the digital market. Digital is mostly different from offset in the sense that jobs can be printed on demand with minimal setup time, as well as the fact that digital can handle variable data and graphics printing. In addition, digital prints are cheaper, at least until the print run reaches into the higher volumes. MGX Copy is a strictly digital printing company, with all the offset work currently being outsourced.

Variable data and graphics refers to each individual printed page that comes off the press having the potential to have unique data and graphics. This can be a static background design with unique addresses(great for mailing services, which is a growing revenue stream for MGX Copy), as well as unique graphics.

Mark my words – printing at MGX Copy will be less focused on how many copies we make, and more focused on how many different copies we can make.

The company that we will not be is a company that is saddled with heavy capital investment, seeking marginal returns on price competitiveness, selling a commoditized product. We are saying no to a focus of printing of times past, characterized by high volume, static print jobs. We are saying yes to a high volume of unique variable data and graphics print runs with differentiation established by a creative and professional marketable corporate image.

Let me speak a bit about how we as a company have approached the printing industry differently. First off, we have already practiced for years, but will officially launch what I believe is an amazing customer service policy. It’s called Client Advantage, and the program is structured to give our customers full satisfaction throughout their entire shopping experience with MGX Copy.

Client Advantage has many benefits, but there are a few major ones. First, if any customer has any design issues, or problems understanding printing, we will offer our help and guidance. Second, Client Advantage gives access to a wealth of printing information geared toward creating and implementing a successful print marketing campaign. This can cover design specifications, paper choices, etc. Lastly and perhaps most importantly, with Client Advantage, in the chance that a customer is ever so slightly dissatisfied with their order, we can offer either a full reprint, or a full refund.

I believe the total satisfaction philosophy is the only prudent and moral way to run a business. In addition, from a business perspective, as more and more people shop online, we must realize that a single negative review online can negatively impact an incredible amount of potential sales.

The other major way in which we have approached the printing industry differently, is by our emphasis on technology. Since our inception, MGX Copy has focused on the internet sales channel. The bulk of our business has been driven by search engine marketing and the maintenance of a professional web shopping portal. On a similar note, our newest website, version 3.0, will be launched in less than a month. Version 3.0 is designed to compete with the top 10 online printing companies and in my opinion, the graphic design and basic functionality rivals, if not bests, most of our competitor’s websites.

I want to say that the idea that we have to adapt to the changing print market even though we have barely even gotten our feet wet in the industry is inaccurate. If anything, we are the trailblazers. Out of the 30,000+ printing companies in the United States, how many printing companies have more programmers than people working on the printing floor? How many of those companies are traditional offset printers who are just beginning to add digital to their offerings? How many printers are like us, already established in the digital market and looking to expand the digital opportunities?

How many printing companies are developing MGX Fresh Prints?



MGX Fresh Prints

MGX Fresh Prints is a great opportunity that we have in front of us. We will are currently building an application that we will launch on Facebook, which will allow Facebook users to design and order photobooks using the Facebook photos hosted on their account. Facebook is the largest, and fastest growing collection of pictures on the internet, as well as the largest social networking community. I think the potential is beyond the scope of any description I could provide in my musings in this paper.

The photobook market is currently pegged at over a billion dollars, and growing 20-30% per year. There is a revealing quote that helps to explain why I am so excited about Fresh Prints.

“Although the photo book market is growing in popularity, most potential customers have yet to engage in the creation of a photo book – nor have any knowledge that they exist.” – Muller Martini (Binding and Finishing Company)

The fact of the matter is, photobook printing is already a large market, but it will be dramatically bigger when people realize that this product exists and provides great emotional value. It reminds me a lot of what Apple has seemingly been able to do – show people that they need a product that they don’t really understand or realize exists yet. What is shocking is that there hasn’t been any meaningful market penetration in trying to integrate Facebook photos with photobook printing. I am sure we are all as eager as I am to have the opportunity to tackle this challenge.

Lastly, I am also excited that Fresh Prints allows us to explore our abilities in developing and launching our own software and hardware technology. I firmly believe that Fresh Prints will not only be a driver of future growth, but it will also act as a gateway venture by which we will be able to expand into some of our older, but perhaps even more amazing ideas such as MGX Inc. and Project Armonica.


MGX Investments

Although much emphasis is given toward our fund, I have chosen not to elaborate fully in regards to MGX investments. However, I can say that over the past year, we have been involved in holding equity in publicly traded companies, as well as a having a heavy emphasis on derivative instruments. As the volatility of derivative instruments are well documented, it’s not entirely clear what the current value of our holdings is. In addition, we do currently hold contracts with a time element embedded in valuations, further adding to the complexity of discerning the total book value of our holdings. However, it appears that over the past year, MGX investments have returned over 900%. 

I would like to touch upon some of the best trades recently as well as our worst trading day in the past year.

By far, the best trades we have had recently are best summarized by our continuous investment in Apple Inc. MGX investments has held derivative positions from $180 until now, even as Apple has crossed $300. Needless to say, these trades have been remarkable in terms of return, and the only other trade that has come close in terms of alpha magnitude was our belief in the price floor of BP stock as it neared the upper $20’s.

The May 6th “flash crash” will likely be the worst trading day for the foreseeable future. On May 6th, our positions lost dramatic value over a period of 15 minutes. The recent reports in regards to the cause of the “flash crash” have supposedly pinpointed a large sale of futures contracts, but I am still convinced that computerized trading algorithms were the true drivers of the crash, as well as the subsequent, almost immediate recovery. Computerized trading algorithms have always had serious flaws in my opinion, especially since I believe that interconnected social systems exhibit Pareto distribution characteristics as opposed to Gaussian distributions. To develop models using assumptions that are incorrect usually lead to models that are poor predictors, nullifying the goal of the model in the first place.

Do I believe another “flash crash” is likely? Absolutely. The temporary trading halts that are currently being tested are an improvement, and should help passive investors from being sold out on their stop loss orders. However, I want to make clear that my opinion on this matter is still undeveloped at the moment. We are not relying heavily on passive stop loss orders at the moment.

My intuition is that the MGX investments will continue to perform well for the foreseeable future. We have at our disposal different instruments that will allow us to take advantage of nearly any trading situation.


MGX Weddings – Keep the Kiss

A few years ago, MGX was a wedding video company that booked roughly 150 weddings a year, at roughly $1400 each. We had great ideas on how to run a wedding video brokerage company, with hiring teams of videographers and outsourcing all the video editing to lower income cities in an effort to build a wedding video production line. There were even plans to outsource all the video editing to India to really create a competitive moat of low prices. There was a San Diego branch, as well as a San Francisco branch, with Los Angeles and Las Vegas branches in development.

As great as things were, we soon realized what vast and scalable opportunities existed in MGX Copy, as well as our investment vehicles. Two weeks ago, we shot our last wedding video and with the delivery of the final videos, we will have effectively phased out the very time consuming wedding video productions.

It is a bittersweet moment for us, as we cut our business teeth on video productions.

I’ll never forget our first bridal show where we tried to sell our video services to brides at a booth in a convention center. It was extremely intimidating, and even more so since we were all 17 and younger.

I won’t forget watching our company become the largest wedding video production company in San Diego within 1 year because of our unique and aggressive marketing campaign. The average wedding videographer does 5-15 weddings a year – we did 20 our first year, 100+ the second year. Was there any other company that had the gall to use an ice cream theme as their marketing backbone?

I’ll never forget signing a $23,000+ video contract at age 18. We were floored with that amount of money – it seemed almost surreal.

We leave the weddings industry with video production experience, business experience, marketing experience, and most importantly, a better sense of what hard work and dedication can bring.

My deepest and sincerest thanks to everyone and anyone who helped build the weddings business.

Thank you Ian for your stewardship of the company while I was away at UCLA.
Thank you Andrew for all your input and support throughout the years.
Thank you Oliver for handling data storage and video conversion.
Thank you Aaron, Joaquin, Rino, Alex, Matt, Sasha, Sara, Cody, and Akira for the great videography throughout the years.
Thank you Todd for the creative, but countless edits and re-edits.

It was tough and challenging, but I hope that when we look back on this learning experience, we will be proud of what we accomplished.


Final Thoughts

With the launch of a new website, a new 3000 square foot office/production facility, uniquely favorable market conditions, and exciting new business prospects, I am very bullish for calendar year 2011. It is amazing that even in the face of such a tough recession, we have experienced amazing growth.

Just recently, we had discussions with investor Jeffrey Wu and his team in regards to debt and/or equity investment. The current offer on the table is a 1% ownership of the company, with an option for MGX to buyback the 1% in 5 years. We are also looking at other investor’s offers, especially if we deem it necessary to raise significantly more capital for the Fresh Prints project.

As for personnel, Ed Yamamoto will be joining us full time for print production in the next few months, and we will also be adding additional customer service help. Erik Krueger is currently helping with the programming side of the Fresh Prints project and we look forward to the input he can provide.

As for hardware, we will be bringing in a saddle stitcher, booklet folder, and face trimmer onto the production floor to assist in booklet production. There will be continued discussions as to the necessity of bringing in additional printing presses. I am sure these discussions will amplify as our print volumes increase from the aggressive marketing campaign that will coincide with the launch of website 3.0 for MGX Copy.

I would like to end my letter with some final thoughts that have an underlying tone of urgency. It’s great to look back and appreciate what we’ve done, but we need to stay competitive and grab new opportunities as they come along.

We need to continue our urgency in our MGX Copy/Fresh Prints work. Although I feel that we are at the vanguard of a new generation in printing, all the while doing better than most of our printing competitors at the moment, the printing industry is simply changing so dramatically. I strongly believe many, many of the small time, traditional offset printers will continue to go out of business. I believe that there will continue to be consolidation in the industry, and print buyers will shift to purchasing through the internet.

As this shift happens, the internet will make it extremely difficult for companies that do not have a great differentiation strategy, or were not able to have some sort of Stackelberg advantage of being the first mover. We need to firmly entrench ourselves as one of the big online print companies, and we need to do this soon. If we don’t move fast enough, the bigger online print companies will simply leverage their scale to further increase their competitive moat.

Fresh Prints is such a great opportunity for us to make a major splash in the variable graphics printing market. However, I expect the variable graphics market to exhibit power law distribution characteristics. There will be just a few, very large players, and very many small players.

It’s the same situation as MGX Copy – soon, we’ll either be a big online player, we won’t be a player at all.

Let’s really work together and make this happen. We’ve got the chance to do something really amazing.



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Bone Thugs n Harmony

Exciting news.

Bone Thugs n Harmony, one of the greatest rap groups of all time, selling over 50 million records worldwide, is preparing to leave on an European Tour to support their upcoming album scheduled to be released near the end of November. For this European tour, a tour DVD that includes interviews, as well as a live concert of their London show will be shot, edited and released.

Guess what? MGX is the sole investor of the DVD project, as well as the sole rights holder to the manufacture and sale of the DVDs!

I’m fairly excited about this project considering the scope of involvement that MGX will have. Not only will this be my first time offering major direct investment in a project that was not related to starting an MGX company, but the prospect of creating a website to process potentially thousands of orders, along with manufacturing and shipping thousands of DVDs will be extremely demanding. I do believe this project will test our limits as a fulfillment company, but I am positive we can handle the workload.

Going to London in 3 weeks!

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Catching Vistaprint

I make no secret that I believe the leader in the online printing industry is Vistaprint. Vistaprint is a publicly traded company, with revenues of 152 million in 2006, 256 million in 2007, 400 million in 2008, and 515 million in 2009. In terms of revenue growth, their rate has been incredibly, and  subject to much of my envy. What I believe Vistaprint holds as its advantages are its very advanced website, which gives it a professional and clean image, large cash reserves in which to leverage its buying power to stay at the forefront of print technology, and its innovative marketing schemes(although this can be debated). In addition, from what I can gather, Vistaprint runs a very automated system workflow, allowing it to reduce its costs and improve its efficiencies.

The question that needs to be asked is, how are we to compete with Vistaprint?

Head to head, I don’t believe MGX Copy is at a position where it can effectively compete against Vistaprint. We will have to start out with our own niche, and slowly expand our services to include more and more services. I am confidence that the print industry has synergistic appeal between its differing products, as well as the ability to expand its services to related industries. For example, MGX Copy does not simply focus on printing-we understand that our corporate clients who need printing generally need dvd/cd duplication services, fulfillment/warehousing services, as well as customized products.

To maintain our growth rate and continue to win market share, we will have no choice but to pursue a technological route of advancement. I expect to continuously invest in new systems while managing our cash flow situation. It’s important to note that MGX Copy does not directly compete with Vistaprint-as mentioned before, we have more of a large business-corporate direction as opposed to a small business focus.

To sum it up and put it simply, in order to compete with Vistaprint and establish substantial market share, MGX Copy will have to take a corporate direction, and effectively build its automated systems to reduce costs and improve quality. Without sacrificing customer service, we will push to have larger clients automate their ordering processes while reducing their outlays.

More to come later. I’m visiting Print 09 next week(compliments of Xerox and Presstek) where I will be checking out new technologies and systems. Hope to find something great!

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MGX Copy

I wanted to take some time and talk about the competitive advantages and vision that we have for MGX Copy.

MGX Copy is an internet based printing, disc duplicating, fulfillment and corporate services company. I know that’s a mouthful, but in essence what it means is that we serve corporate clients through printing business cards, brochures, flyers, booklets, newsletters, duplicating dvds and cds, as well as packaging and shipping products for them.

I’m very bullish on our company’s long term prospects-I’ve always enjoyed taking a traditional industry and applying new technology and new methods of execution to improve on its productivity and efficiency.

What’s particularly encouraging is the emerging technology that is available for us to use and implement. For example, traditional printers have had to deal with long and expensive setup times, resulting in slow turnarounds and higher prices. Here at MGX, we are currently building systems that will nearly fully automate the production process. It would be unwise for me to get into specifics, but the production workflow will allow a customer to price, pay, transfer files, and order their job completely without our intervention. Afterwards, the files would become automatically  converted and transferred to the point where our operators simply need to push 1 button before the production begins. This type of full automation dramatically speeds up production, reduces errors, and perhaps most importantly, heavily cuts down on costs by eliminating a huge portion of operator input.

Long story short-I’m excited to see how far we can take this technology. By reducing our costs and speeding up our workflow, we can expand ourselves to handle more clients and more effectively compete online, where pricing is paramount.

If I had to choose 3 phrases to describe MGX Copy, I would go with technology driven, customer oriented, and aggressive. You can decide what aggressive means :)

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Hello and Welcome.

Hi, I’m Lawrence and welcome to Think MGX! Thanks for taking the time to check out the site.

With any luck, I will be posting updates on my companies, MGX Copy and Keep the Kiss, as well as providing updates on the new businesses that are in the works, such as Project Armonica. I will also be using Think MGX as a place to post my thoughts on economics and finance, as well as my thoughts on economics and finance. In addition, from time to time I will include some papers/publications that I am currently working on.


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How The Internet Works

In 1996, the theoretical physicist Per Bak published a book titled “How Nature Works: The Science of Self-Organized Criticality,”. That title was the inspiration for a paper that Caitlin Keane and I authored together regarding power law distributions and their prevalence among internet based entities.

Essentially, this paper argues that power law distributions occur when interconnectivity becomes more and more present. The internet is perhaps the epitome of interconnectivity, and we explore and survey how blogs, search engines, social networking sites, news sites, etc exhibit power law distributions. Enjoy.

How The Internet Works-condensed

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In the long run, we are all dead.

Last October 2008, I had written this post as we were about to descend into the midst of the “Great Recession”. As nearly a year has past, my predictions have been fairly accurate, and I’ve also attached some links from articles to add extend some legitimacy to my proposals and arguments.

The possibility of the FDIC going bankrupt is documented here:
The “closed door negotiations and strong-arming that I suspected is documented here:

My original post follows as below:

I think it is high time that Generation Y reassess their view on America’s place in the modern and world economy.

Let’s set something straight. I was born in 1987, but the first president that I can recall, was named Clinton. Growing up, I think it is fair to say, that we were presented with a very rosy, fairytale view of the world. The United States was far superior militarily, economically, and in the sense of prestige. Perhaps we were young and naive, but it almost seemed as if we couldn’t be touched.

Fast forward to our current situation in society. We are currently dragged down in a war that apparently we shouldn’t have been in, an economic situation and stock market that resembles the newest coaster at Six Flags, and as far as I am concerned, whoever coined “freedom fries” should be removed from the gene pool.

Let’s talk the bank failures. Does everyone know why we’re in this position, what just happened, and what’s coming up?

Anyways, here’s something we need to seriously consider. 11 federally insured banks have failed this year. As for the deposits, supposedly, the omnipotent FDIC will cover any deposits that we have in the bank, at least up to $100,000. The truth is, does the FDIC even have the money? Not a chance in hell. At least not until the government pumps more money into the FDIC, of which we taxpayers will need to foot the bill.

Let’s think about this for a second. When IndyMac failed, it cost the FDIC roughly 7-8 billion dollars. Well, just last week, we had “failures” of Washington Mutual and Wachovia. Wamu has a market capitaliztion of over 300 billion dollars. Obviously not all of this money is in the form of deposits, CDs, or other FDIC insured funds, and the closest estimates I have heard is that if Wamu were to be bailed out by the FDIC, it would cost the FDIC 48 billion dollars.

Guess what, the FDIC only has 45 billion dollars on tap.

See the problem here? Know what’s even scarier. I hear that Wachovia is a bigger bank than Washington Mutual.

Is it just me, or is it coincidence that Merill Lynch was acquired by Bank of America, Wachovia was acquired by Citibank, and Washington Mutual was acquired by JP Morgan all with a little “encouragement” by the government?

Ladies and gentlemen, think about all of this. What does the government do when it lacks the funds necessary to let a bank completely fail, so that it would be on the hook for the FDIC insurance policy payout? It should not be an impossibility that Capitol Hill and Wall Street are meeting for tea, and the politicians are “forcing/begging/encouraging” JP Morgan to buy out Washington Mutual, otherwise the FDIC would go bankrupt.

The mega corporations are bailing out the mega corporations, because the FDIC(government) can’t do it right now. Did anyone ever mention that, more than ever, corporations are running more of the world?

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