As I mentioned previously, we are in the market for a new car this year.  We are expecting our third child in June. The existing 2000 Toyota Camry Solara won’t cut it because it’s a two-door coupe!  Imagine the problems we already have getting our existing two children into this car. A third child will turn it into a clown-car!  So we desperately need to buy a new car this year.

The Toyota Camry Solara we own, while a Japanese designed car, it was built in the states.  The build quality reminds me of some of the older GM made cars (like my 1970 1/2 Camaro).  It has heavy doors with the window seal as part of the roof of the car (not part of the door).  Overall, I’ve not been too happy with the quality of the build.  Anyway, I digress with my rant.

I suspect Toyota with all of it’s recalls, and bad press will offer some great promotions to entice people back to their brand.  If that happens should I purchase a Toyota?  Are their cars safe?  Let’s assume worst case, Toyota’s fix doesn’t resolve the problem.  What are the chances of sudden acceleration?  Let’s talk about odds and put this issue into perspective.

According to this CBS News report, since 2000 there have been 34 deaths directly tied to sudden acceleration.  Since 2000 to 2009 Toyota has sold over 20 million cars.  So if you have bought any Toyota model during that period you have a 1 in 58,823 chance of dying.  To put simply, you have a very remote chance of dying while driving a Toyota!  If you are a male, you have a much greater chance dying from a heart attack (1 in 1,078), than dying from sudden acceleration in a Toyota. According to the Book of Odds web site, you have a great chance of a:

• White man 20 – 54 will die by drowning in a year are 1 in 56,050 (US, 1999 – 2006).
• Person in Tennessee will die from exposure to an uncontrolled fire in a year are 1 in 57,340 (TN, US, 1999 – 2005).
• Black female will die from a fall in a year are 1 in 57,950 (US, 1999 – 2005)

I’m not minimizing the loss of life, and trying to put this into perspective.  This obviously doesn’t comfort the families affected by their tragedy, but sudden acceleration won’t occur to most people driving a Toyota.  These odds are almost at the level of dying because you got hit by that proverbial bus when crossing the street in red pants, on a Sunday at 3 PM.  You get the idea.

Let’s increase the odds based upon the amount of cars recalled, and assume the amount of deaths is under reported. From Consumer Commentary stats, let’s use only the 7.6 million cars recalled, and make the 2,273 incidents into deaths.    You still have a 1 in 3344 chance of dying by owning a Toyota.  According to the Book of Odds web site, you have a better chance of a:

• Teenager 15 – 19 will die from an accident in a year are 1 in 3,196 (US, 2005)
• Black man 20 – 54 will die from a transportation accident in a year are 1 in 3,249 (US, 1999 – 2005).
• Female will die of breast cancer in a year are 1 in 3,367 (US, 1975 – 2006).

You can search for other uncommon events, but you get the idea.  There are many other things in life that are much more deadly and that you should be concerned about.  Yes Toyota should take action and fix a known problem with their cars. It is also possible they knew about the issue for too long, and didn’t do anything about it.  The issue I have is the media sensationalism (as they always do) makes it a more pressing and more important problem than the odds show.  Based upon the odds alone, I most certainly would buy a Toyota car, even BEFORE the fix was done.  Life itself is always inherently risky, unless you don’t move.

I look at the opportunity like a value investor in stocks, be greedy while others are fearful.  If Toyota offers some great promotions to restore their creditability, I’ll be the first in line buying a Toyota.  Oh what a feeling Toyota!

Readers, do you think the media sensationalizes issues like this?

Related posts:

1. Are You Saving Too Much?
2. How I Learned Everything About Business By Owning A Lemonade Stand

My company is an IT consulting firm, and one of the services we offer is on-site technical support for servers and IT operations.  The client is an 80 million plus year net income business, yet their IT budget was less than 1% annually.  This is a company that has over 300 employees.  To give perspective, in some years our own IT budget for servers was greater.  Even in their case, with manufacturing businesses being on the slightly cheap side, they are typically in the range of  5 – 10%.  We were always the fall guys for their lack of spending in IT.

How does this story relate to risk?  The client once told us, if their servers were down for an 8-hour business day, they loose a mythical $100,000.  You would think that with a potential loss that large, you would invest money and time in the proper infrastructure.  A little $50,000 from petty cash would have put enough in place to prevent any major crisis.  Problem solved, you’re the hero.  You know the things most business should do; proper risk assessment and risk management.  We’ve pitched them five ways to Sunday on why this is a no brainier of an investment.  I’ve unfortunately learned from life, like many Americans engorging too much on debt, most people don’t plan to fail, but fail to plan.  Business, as in life, and investing, is a chess game.  I try to plan five or more moves ahead. With system administration, if people see you running around like a headless chicken doing a lot of work, they assume you must be doing a great job.  The secret is that the exact opposite is true.  The system administrator who monitors their setup very closely, and takes action before items become critical is the one to follow by example.

In the case of this poorly planned customer, wouldn’t you know that one day, their myth turned into reality.  The manager calls me directly, and in a panic, needs to have my tech get to their office immediately.  Of course caring for the customer, we dropped every other customer, and were able to get over there within an hour.  Even then, their one server for the task was down the entire day.  The point of the matter, in business, as in investing, and even life there is risk all around you.

If the customer invested $50,000, it would have prevented them from losing $100,000 in worker productivity.  It’s the classic, penny-wise, but pound-foolish.

I know in the end, loosing this customer, is best for my company.  To put a positive spin on it, I’m glad they are moving on to another vendor.  This also puts the flame under my butt to find other customers that are more aligned with our beliefs.  I’m happy to replace that income with a more positively aligned customer. I’m not so much disgusted with the customer leaving, it more a matter that I have tried to have a somewhat personal relationship with the manager.  Like many previous un-returned phone calls and E-mails, I assume he will not contact me directly to cancel service.  The guy doesn’t have the integrity for that.  I’m sure we’ll get the notice from their billing department.

I left the corporate world to better my community and myself.  I wanted to run a business in the way I would feel proud.  It’s interesting; many people start their own business so they don’t have to work for “the man”.  When in-fact, I’ve got news for you, “the man” works everywhere.  He’s your customer, vendor and employees.  By becoming an entrepreneur and starting a business, you will ALWAYS have to deal with “the man”.  In some cases in even more annoying ways. I’ll give you a little secret to my business success.  Have a solid ground on your beliefs, ideologies on how to run your business, and stick to them no matter what. After all, you have to be happy with yourself in the end.  Life is too short to not ensure you have a meaningful impact with the people around you.  Shed the client, customers and employees that have shown to have a negative influence.  In the past I have “fired” customers because of their rudeness, or if they had unreasonable expectations with our service.  I won’t kid you, we work 110% to try to keep our customers are happy.  Unfortunately the 80/20% rule (otherwise known as the Pareto principle) applies to your customers and this customer was in the lower 20%.  A funny side note – the cheaper customers are usually the most difficult clients.

You’ll have to excuse me now while I go try to get some new customers.  Merry Christmas, Happy Holiday’s and I hope you have a great and prosperous New Year!

Update (December 23rd 2009): The client has finally responded to our Emails, after we approached them about the domain registrar changes.

No related posts.