Spreadsheets are fun. They allow a layperson to create some very powerful data models. There are limitations for extreme cases, but will suffice for an average analyst.

According to IBM’s Spreadsheet Modeling Best Practice, a spreadsheet model should:

1. Easy to use
2. Focused on important issues
3. Easy to understand
4. Reliable

These are my top recommendations based on my experience. There’s no scientific research, just my experience.

1. Properly Documented – Whether the documentation is included in the spreadsheet or written as a separate document, the model should have instructions that label the assumptions, methodology, and limitations of the model. It should allow someone that’s reasonably knowledgable in basic spreadsheet usage to pick up the model and make modifications and gain confidence in the reliability of the model.
2. Variables Clearly Labeled – The spreadsheet should let the user know where functions are used and where variables should be entered. If necessary, the formula cells should be protected. I like to pull elements of Web 2.0 styles and make large, bright, and visually stimulating data entry fields.
3. Traceable – If formulas and macros are used, it should be relatively easy to trace the data and formula and come to the same conclusions.
4. Simple – The model should be as simple as possible to achieve the objective. If a simple formula can be used, do so. Using non-traditional formulas can create unnecessary complexities and make it difficult to trace.

Also check out the Spreadsheet Standards Review Board for some spreadsheet-geek standards.

This morning, if you check for updates on your Mac, you’ll get Mac OSX Update 10.6.6. This includes a number of bug fixes and most notably a new icon next to your finder icon. The Mac App Store is live. After success with the App store for iPhone, iPod, and iPad, Apple is moving this platform to the desktop.

I previously wrote how Apple is a master at change management. It has gotten people used to the ease and comfort of the mobile app store. Many purchase apps on their phones and others through iTunes. Now, by creating a similar store on the desktop, it’s going to draw people to the same user experience on the desktop. Previously, buying software meant going through the vendors site, download or receiving the software, and entering serial numbers. Each process is different and serial numbers are a pain to manage. As a third party, Apple manages all that, allowing developers to create and consumers to buy (and of course taking a 30% cut in the middle).

This morning, I quickly downloaded the update and gave everything a go. The design and feel is very familiar. With only 1000 apps at launch, feels a little sparse. Look out for Apple to quickly ramp up.

Each application page seems to be custom designed for that specific application. In this case, Sketchbook Pro has its own special background. From the pricing perspective, Sketchbook Pro is $29.99 special introductory price. The retail price of the software is $79.99 from Amazon or Autodesk.

Expect prices to fluxuate as developers navigate through the new App system. As apps are put side by side, there will be more competition among developers and we should expect to see prices slide. From the mobile perspective, we see $0.99 apps succeeding over higher priced apps.

Below is an example of some of the apps currently in the store:

• Pixelmater – $29.99 – Normally $59.99
• Aperture 3 – $79.99 – Normally $199
• iLife apps (iPhoto, iMovie, Garage Band) – $14.99 each, previously you had to buy them as a bundle.
• iWorks (Pages, Numbers, Keynote) – $19.99 each, previously you had to buy them as a bundle. It appears that iWorks 2011 is not available yet. Don’t buy until the new version comes out.
• Angry Birds – $4.99, expect to see a proliferation of quick games and fast decline in the American workforce productivity levels.
• Twitter – Free, previously known as Tweetie. This is the official twitter app, now on Mac.

Apps bought outside of the App Store

It’s a little uncertain on what happens to your apps that you previously purchased. For Apple apps, it appears that the store recognizes it and shows it as installed. I own a copy of Pixelmater and it shows the buy now price rather than installed.

Apps already installed

It appears that Apple apps such as iWorks and iLife are instantly recognized. I already had a copy of Evernote installed previously and the Mac Store showed it as free. I downloaded a copy and now it shows installed. When I opened it, Evernote launched just as normal and my data appeared intact.

Be careful not to pay for apps you already own previously.

Other app stores coming

Several other software stores are already available or coming.

• Steam – an all games store.
• Bodega – an alternative and more developer friendly app store.
• Cydia – the iOS jailbreak store. Expect to see heavy mods to the OSX environment.

Bottom Line

I suggest holding off on buying apps until prices normalize. Expect to see similar “sales” as in the iOS environment. Developers tend to have fire sales to encourage word of mouth and feedback on their software. I’m very excited to see a unified store and more reasonable software prices coming soon.

Photo by gruntzookiIt’s been a long time since I’ve played economist. It really doesn’t take much training because all economists don’t really know how to predict the future. Economics is all about assumptions.

As we’re looking to buy a home in Seattle, WA, we’re finding that home prices are still expensive. There’s a big disconnect between listing price vs. actual value. I pulled data from the Standard and Poor’s Case-Shiller index. Lets assume that the methodology for developing the index is correct and a good representation of home values in Seattle (first assumption). My second assumption is that homes should appreciate by the rate of inflation. The real estate mantra is location, location, location. Prices in up and coming neighborhoods should in theory increase more than homes that are already priced in the demand for hot neighborhoods. As an investment vehicle, homes are suppose to track inflation in developed neighborhoods and in up and coming neighborhoods, prices should appreciate to reward investors for the risk. Thirdly, improvements to homes from remodeling, renovation, and enhancements should add equity to homes, but only as a fraction of the original investment.

If we focus only on the index and assume that the period between 1990 and 1997 is a good representation of normal growth, we can extrapolate the “correct” growth in home values. This is shown in the flow line below. The grey line represents actual home prices with the recent “bubble” in home values. When the bubble popped in 2007/2008, we see a sharp decline in home values. Macroeconomic factors such as joblessness rate, rising national debt, and expectations of increasing tax rates creates uncertainty. As uncertainty in the state of the economy increases, buyers are less likely to take on the risk of home ownership.

If we assume the blue line represents a more realistic model of growth in home values, home prices will need to either do two things:

1. Decline – the prices should drop until it reaches the support blue line and then track that line. The question is how fast will it drop and what artificial policies will be enacted to keep such a sharp decline. If the decline is too sharp, everyone will lose faith in the ponzi-scheme system and the system collapses.
2. Flatline – alternatively, home prices should stabilize and stay flat until it intersects the blue line. Based on my assumptions, this could take upwards of a decade to reach a stable price point.

A rebuttal to this model is that there’s only so much land and population increases will create demand. However, there are unforeseen alternatives. People could move. Technology allows people to be less location dependent. There’s no need to live central to the city for jobs. New housing policies could push for high density homes. There’s no specific reasons why home prices need to appreciate more than inflation.

In my future analysis, I’ll look at the impacts on generational changes (baby boomers retiring) and first time home buyers influx.

Disclaimer: The analysis presented above should be used for entertainment purposes. Please do not use it to make financial decisions. I am not a home owner and have financial interest in seeing home prices decline.

No explanation needed. Go to informationisbeautiful.net for more great infographics.

Photo by Anthony AlbrightIn our digital word, it’s possible to never pick up a pen or pencil and write something. In fact, I recently found out that my handwriting is all but gone. Typing has replaced the typical letter writing. Even my hand markings are now digital with my tablet. One of my 2011 new year resolution is to go back to analog to be better at the digital world.

Typewriter – I bought a couple Remington Travel-riter mechanical typewriters. These are old typewriters that don’t plug in. There’s no backspace, spell check, or formatting. As a result, it requires focus, attention, and care when crafting a document.

Handwriting – I’m going back old school and working on my “font.” What we learned in elementary school actually applies as an adult. First, write big letters to work out the stroke. Then, start reducing the size until its an adult size.

Calligraphy – Part of my Zen training classes include Japanese calligraphy techniques. I’ll continue to use this to improve my handwriting and also be able to make more ornate text as well.

Sketching – I will be taking visual meeting and graphical recording courses to learn to be a visual facilitator. In an all digital world, all these default stencils and shapes all start to look alike. I’m finding that analog can come a long way.

I often hear “this is the last book I’ll ever read” after someone is about to graduate. Schools force us to read an ungodly amount of pages. The real world forces us to read just the same but in a less structured way. It’s easy to differentiate yourself from your competition: read. It lets you learn new subjects, expand your horizons, and learn new ways of analysis. This is my reading list for the holiday season.

Visual Meetings: How Graphics, Sticky Notes and Idea Mapping Can Transform Group Productivity

David Sibbet’s book on using visual thinking and sketching techniques for group sessions. So far, this is really practical and can apply to real world applications.

Gamestorming: A Playbook for Innovators, Rulebreakers, and Changemakers

David Gray and Sunni Brown’s book on using games to solve problems. There’s a huge amount of games on this. I’m thinking of developing a one page cheat sheet card for each potential game.

slide:ology: The Art and Science of Creating Great Presentations

Nancy Duarte’s book on designing better presentations. Best bang for the buck. There’s so much good reference material in this book.

What are you reading?

I’m always interested in alternative energy. How can we power our many devices without plugging in. This is particularly important out in the wild away from a power socket. Solar Joos is a rugged solar panel with a lithium battery. It’s highly efficient at charging, even under a lightbulb. The enclosure is water proof and works even under water. However, it can’t charge while under water. EDIT – It can charge underwater, but powering another device via the plug isn’t recommended. It’s possible using silicon gel to protect the contact. As shown below, it’s a fair size, about the size of an iPad but much thicker. It’s heavy too due to the large capacity battery.

The Solar Joos comes with an assortment of charging tips and two cables, one for charging devices and the other for hooking up to a computer to access the information panel. To charge Apple products, it requires a female USB plug. The Apple plug goes into this USB plug. I’m a little disappointed that it doesn’t come with the default tip for charging Apple devices. It costs about $5 online.

I’m looking forward to taking this out on the field and to coffee shops, campgrounds, and out on the water. Check back later for a long-term field review.

Here’s a video demo of the device working under water.

This is a great short documentary on letterpress printing.