Who is Stratfor?

Michael Pollak mpollak at panix.com
Mon May 10 01:53:21 PDT 1999


On Mon, 10 May 1999, Doug Henwood wrote:


> >The Stratfor Gang deconstructs the embassy bombing.
>
> This stuff is always interesting, but do these guys have sources, or are
> they just talking off the top of their heads?

Just off the top of their heads, plus everything they can suck up by computer. But some people have turned out some excellent newsletters that way ;o) Here's their self-description.

Who is STRATFOR?

August 3, 1998

For reasons not altogether clear to us, we have begun receiving a

large number of E-mails asking (some demanding) that we identify

ourselves and explain why we write the daily Global Intelligence

Updates. So we've decided to devote this week's Weekly Summary to

explaining not only who we are and why we write these, but also to

explaining a bit about how the Global Intelligence Update is written.

We are not in any way associated with the CIA, MI5, Mossad, KGB or any

of its descendants or any other national intelligence agency. We are a

private, for-profit company that provides intelligence services to

businesses or other organizations that meet three criteria. First,

what they ask must be legal. Second, we will not serve any client who,

in our judgment, threatens the fundamental interests of the security

of the United States. Third, we require that our clients must be able

to pay for our services. The last is very dear to us. Since our

founding, we have served clients in a large number of fields,

including petrochemical, financial, telecommunications and many other

areas.

* STRATFOR does not go to parties

If you think of intelligence services in terms of James Bond movies,

we will greatly disappoint you. Indeed, all of us at STRATFOR have

been hoping to be invited to elegant cocktail parties, having our

martinis shaken, not stirred. Alas, we mostly search electronic

databases, go to the library and spend enormous amounts of time

reading and thinking and arguing with one another.

In fact, we rarely go anywhere. We do not have dinners with Asian

bankers. We don't hobnob with Middle Eastern rulers. Alan Greenspan

never calls us. Because we don't have much to do with Asian bankers,

we were able to believe our eyes and predict the Asian meltdown. As

our readers know, we have been negative about Asia for several years,

and warning of disaster since last summer. If we had dinner with

Japanese bankers we might have believed their assurances that

Westerners don't understand that in Asia a decade of miserable profits

does not mean what similar figures meant in the West. Since we never

visited the State Department, we were able to predict the U.S.

overture to Iran. Since the IMF never calls us, we were able to remain

bullish on the U.S. stock markets in spite of the Asian meltdown. Now,

when we made these predictions, most "serious" analysts dismissed our

views. We enjoy letting others have their laugh, so long as we have

the last laugh.

Why are we better than our well-connected, globe trotting, conference-

attending competitors? We know a secret. The brother-in-law of the

Minister of Finance is no better informed than we are. Moreover, he

usually has ulterior motives in providing information. Chances are he

wants you to invest in his country, so that he can get a cut of the

deal. Now, it may or may not be a good deal, but the locally

well-connected relative is not going to tell you which it is. First,

what makes you think he has any idea? Second, if it is a bad idea, he

isn't going to tell you because it might sink the deal. Remember all

the well connected businessmen who were assured by the Shah's

relatives that the Ayatollah was a minor irritant? Well, they were the

same people assured by Suharto's son-in-law's partner that an

investment in Indonesia was a sure thing. STRATFOR listens to what

everyone has to say, but is especially wary of the well connected who

make money off a deal.

STRATFOR makes money whether the deal goes through or not. It is

STRATFOR's policy never, ever to take a brokerage fee. Our strength is

that we never care whether the deal goes through or not. That means

that we bring bad news to our clients quite frequently. They sometimes

get irritated at us. That's OK. The clients we persuaded to stay out

of Asia were irritated at the time, since they really wanted to do the

deal. But they are really happy with us now. STRATFOR succeeds when

the client makes the right move. Sometimes the best move is to do

nothing, or do it somewhere else. We frequently find ourselves serving

as a "B-Team," reviewing the recommendations of in-house staff. It is

a role that suits us.

Our strength is our ability to take a multi-disciplinary look at a

situation and provide an unbiased and disinterested analysis that

integrates economic, political and military considerations. We

maintain a growing staff (now over forty people) all trained at

STRATFOR, using our techniques, able to gather information and analyze

it rapidly and honestly. We use a technique called "zero-based

analysis," which we also call "being stupid." Being stupid means

approaching a problem without sophisticated preconceptions. Being

stupid means not allowing the nonsense you picked up at the last

conference you attended at a top-ten business school, or at a dinner

with your bankers, get in the way of looking at the situation as if

you had never heard anything about it. Being stupid means starting as

if you knew nothing, and building your analysis out of solid reality.

Being stupid means never saying, "as everyone knows," and never

relying on anyone's insights save your own, tested in STRATFOR's own,

demanding crucible. Being stupid means, we think, being very smart.

* Why a Private Intelligence Service Works Today

Governments have long used intelligence services. They were designed

to identify threats and opportunities. They used spies and satellites

and spent enormous amounts of money. Sometimes they worked and

sometimes they failed very publicly and disastrously. It has been said

that the CIA, for example, is extremely effective. Well, for what we

are spending on them, they had better be.

Modern businesses have threats and opportunities to be identified as

well. Sometimes what is needed is an analysis of a particular

investment. What is the future of the government? Will the economy

collapse? Will a guerrilla movement shut down operations? What

STRATFOR specializes in is cost-effective intelligence gathering and

analysis, for businesses of all sizes. We understand that our

effectiveness cannot depend on a vast budget. What we spend must be

consistent with the risk and potential reward. Fortunately, the world

has evolved in such a way as to make private intelligence

cost-effective.

There are two things that make a private intelligence service possible

today. First, the fact is that 95 percent of all information is

available in the public domain. There are very few secrets in the

world. In fact, there is so much information surging through the world

that the problem is not ferreting out secrets but finding the

information that is needed in the torrent of words that pours out.

That is what we specialize in. We know how to find necessary

information. More important, we are good at recognizing its

significance and understanding its relationship to other, related

facts. We gather information and analyze it.

The second thing that makes our work possible is the computer. In

order to make intelligence services affordable, we need to hold down

costs. People are expensive. Computers are cheap. People need to do

the things that people do best: read and think. We try to make

computers do the rest by writing computer programs to speed up our

work and protect our data. Two of these programs, Shredder and

Sanitizer, have been made available to the public. Other software

designed to search for information automatically and to assist our

analysts in rapidly understanding the meaning of that information,

will also be made available to the public by the end of this year.

This knowledge management software will, we think, revolutionize the

way people use their computers by improving information storage,

search, and retrieval methods. Our advantage at STRATFOR is that our

intelligence analysts, who specialize in knowledge management in its

extreme form, are the people who design and use our software. At other

companies, programmers try to guess what users need. Here, our users

task the programmers.

Now, we understand that a lot of people have become confused by what

we do. People downloading Shredder demos are baffled by why a software

company is issuing reports on Sudanese civil wars. Intelligence

customers, interested in Sudan, are wondering why STRATFOR is trying

to sell them software. OK, that's fair enough. We will shortly be

dividing the software company from the intelligence service, since we

like to keep the customer happy. There will be an intelligence company

called Strategic Forecasting Intelligence Services and a software

company, whose name we are currently debating. Suggestions are

invited.

* The Global Intelligence Update

Why do we do the Global Intelligence Update? There are two reasons.

The first is marketing. Most of our clients are sensitive about the

fact that they have hired an intelligence consultancy. We can't

advertise the fact that we have been hired by some of the most

important companies in the world. So, instead, we have to show what we

can do. Our staff produces the Global Intelligence Update daily. Every

day, we demonstrate our ability to find and analyze events ignored by

most people, which point the way to our future. Our goal is simple:

people should read what we give away for free and wonder about what

they could get if they paid us.

The Global Intelligence Update is designed to be of general interest,

showing our global capabilities and the outstanding quality of our

research and analysis. If anyone wonders whether we are any good, we

demonstrate how good we are very publicly. We're proud of our work and

are happy to take the risk of making predictions so our clients can

evaluate our skills. We have certainly been wrong on some things, but

on the whole, we will compare our track record anyone out there. If

your consultants always give you the same three possibilities that you

could have thought of yourself, and refuse to commit themselves, fire

them and hire us.

The second reason for putting out the Global Intelligence Updates is

that we use the production process to refine our understanding of how

information management and analysis work. This helps drive our

software design process. The Global Intelligence Update is almost

entirely produced from electronically available, open source

information. One person is able to sort through the mass of

information in less than one hour every day, identifying a handful of

interesting stories and then settling on one. We then produce the

analysis you read in less than an hour. It is fair to say that each

Global Intelligence Update is produced each day with less than two

man-hours of effort. In about six months, we will be selling this

ability as software.

We have no ideology in the conventional sense. To be more precise, we

are a jumble of ideologies working together to create a coherent view

of the world. Many of you have asked us if we were Left or Right,

Pro-Arab or Pro-Israeli, Pro-Yeltsin or Anti-Yeltsin. If you are

baffled, then we have succeeded. Our goal is not to grind our favorite

axe. Our goal is to describe the world as we see it, trying to make

sense out of the apparently unconnected events that surround us. We do

believe certain things: politics is still important, wars are still

being fought, and economics frequently are overwhelmed by both. Beyond

believing the world to be a complex and dangerous place, however, we

stay neutral as an organization, although our staff is a diverse and

cantankerous lot.

In the course of this, we try to make an honest living. That's why we

ask for information about each of you. We are trying to identify

potential clients. But we are happy to send our free E-mails to any

who request them, whether or not they might buy services from us. We

never sell this information. However, we occasionally send you

information about products or events involving STRATFOR. In the

future, we may be offering new services for a fee. But apart from

this, we hope you enjoy your Global Intelligence Updates and we hope

that this report helps clear up the mystery.

info at stratfor.com

© 1998 Stratfor, Inc. All rights reserved.

__________________________________________________________________________ Michael Pollak................New York City..............mpollak at panix.com



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