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.
© 1998 Stratfor, Inc. All rights reserved.
__________________________________________________________________________ Michael Pollak................New York City..............mpollak at panix.com