It turns out that if you didn't grow up with Oreos and develop an emotional attachment to the cookie, it can be a weird-tasting little thing. And this started a whole process in the Chinese division of Kraft of rethinking what the essence of an Oreo really is.
Key terms in this article include "the essence of Oreoness" and "Twist, Lick, Dunk".
This is the story of the worst project I've funded on Kickstarter. I am posting this not to single out the creators behind it, or bad mouth their business, but to go over my disappointment in the hopes that future Kickstarter project creators can learn from it. It's all about communication with your funders, setting up and delivering on expectations for funders, and doing the right thing when things go wrong.
Shipping a product or app is hard. It requires experience, hard work, and a little luck. But providing effective and genuine customer service might be even harder because you just have sit there, take it, and react well under pressure over and over and over. The entrepreneur side of your brain is saying "this is a great product and I am proud of it and anyone who says otherwise is wrong and I will show them and succeed" and sometimes customer service is acknowledging publicly and repeatedly the exact opposite thing...that the product isn't meeting needs, you are right, we will fix it, and thank you sir may I have another? That's a lot of potential cognitive dissonance! The best teams and companies deflect that dissonance and turn customer service problems into opportunities to improve their products, their teams, and their relationships with their customers (current and potential). That's when the magic happens.
The New Groupthink has overtaken our workplaces, our schools and our religious institutions. Anyone who has ever needed noise-canceling headphones in her own office or marked an online calendar with a fake meeting in order to escape yet another real one knows what I'm talking about. Virtually all American workers now spend time on teams and some 70 percent inhabit open plan offices, in which no one has "a room of one's own." During the last decades, the average amount of space allotted to each employee shrank 300 square feet, from 500 square feet in the 1970s to 200 square feet in 2010.
The new offices of Foursquare and Buzzfeed (where I work from) are a perfect example of the New Groupthink Cain refers to....rows and rows of people sitting next to each other in open spaces. Much of this is because of NYC's insane rental market, but Fog Creek's offices are a nice counterexample:
Every developer, tester, and program manager is in a private office; all except two have direct windows to the outside (the two that don't get plenty of daylight through two glass walls).
Interesting things happen when we cut out the middleman. In addition to reducing cost, we often end up creating an internal byproduct that can be productized and sold to a completely new customer. (Amazon Web Services is an example of this.) Sometimes the middleman's market is so huge, that a freaking enormous business can be built simply by providing their customers a lower cost and more efficient option.
The message I get is that Americans love the movies as much as ever. It's the theaters that are losing their charm. Proof: theaters thrive that police their audiences, show a variety of titles and emphasize value-added features. The rest of the industry can't depend forever on blockbusters to bail it out.
In today's paradoxical world of maximizing shareholder value, which Jack Welch himself has called "the dumbest idea in the world", the situation is the reverse. CEOs and their top managers have massive incentives to focus most of their attentions on the expectations market, rather than the real job of running the company producing real products and services.
In Fixing the Game, Roger Martin reveals the culprit behind the sorry state of American capitalism: our deep and abiding commitment to the idea that the purpose of the firm is to maximize shareholder value. This theory has led to a massive growth in stock-based compensation for executives and, through this, to a naive and wrongheaded linking of the real market -- the business of designing, making, and selling products and services -- with the expectations market -- the business of trading stocks, options, and complex derivatives. Martin shows how this tight coupling has been engineered and lays out its results: a single-minded focus on the expectations market that will continue driving us from crisis to crisis -- unless we act now.
I've never had a million dollars all of a sudden. and since we're all sharing this experience and since it's really your money, I wanted to let you know what I'm doing with it. People are paying attention to what's going on with this thing. So I guess I want to set an example of what you can do if you all of a sudden have a million dollars that people just gave to you directly because you told jokes.
Amazon is somewhat of an unusual company for American investors because it focuses on the long-term (10- 20-year timelines) instead of the short-term (quarterly earnings).
"If everything you do needs to work on a three-year time horizon, then you're competing against a lot of people," Mr. Bezos told reporter Steve Levy last month in an interview in Wired. "But if you're willing to invest on a seven-year time horizon, you're now competing against a fraction of those people, because very few companies are willing to do that. Just by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue. At Amazon we like things to work in five to seven years. We're willing to plant seeds, let them grow-and we're very stubborn."
Like Apple, Amazon is one of those large market cap growth stocks that investors don't really know what to do with. Both stocks are still undervalued compared to much of the rest of the market, IMO.
At this volume, and with the impermanence of the sandwich, it only makes sense for McDonald's to treat the sandwich as a sort of arbitrage strategy: at both ends of the product pipeline, you have a good being traded at such large volume that we might as well forget that one end of the pipeline is hogs and corn and the other end is a sandwich. McDonald's likely doesn't think in these terms, and neither should you.
Oh and speaking of pipelines:
And for its part, the McRib makes a mockery of this whole terribly labor-intensive system of barbecue, turning it into a capital-intensive one. The patty is assembled by machinery probably babysat by some lone sadsack, and it is shipped to distribution centers by black-beauty-addicted truckers, to be shipped again to franchises by different truckers, to be assembled at the point of sale by someone who McDonald's corporate hopes can soon be replaced by a robot, and paid for using some form of electronic payment that will eventually render the cashier obsolete.
There is no skilled labor involved anywhere along the McRib's Dickensian journey from hog to tray, and certainly no regional variety, except for the binary sort -- Yes, the McRib is available/No, it is not -- that McDonald's uses to promote the product. And while it hasn't replaced barbecue, it does make a mockery of it.
More than a year ago, Facebook engineer Andrew Bosworth wrote a post about how best to work with Facebook CEO Mark Zuckerberg.
I think one of the biggest mistakes people make when first working with Zuck is feeling that they can't push back. As long as I have been at Facebook, I have been impressed with how much he prefers to be part of an ongoing discussion about the product as opposed to being its dictator. There are a number of exceptions to this, of course, but that comes with the territory. In those instances where he is quite sure what he wants, I find he is quite good at making his decisions clear and curtailing unneeded debate.
Barring that, you should feel comfortable noting potential problems with a proposal of his or, even better, suggesting alternative solutions. You shouldn't necessarily expect to change his mind on the spot, but I find it is common for discussions to affect his thinking over a longer time period. Don't necessarily expect acknowledgment for your role in moving the discussion forward; getting the product right should be its own reward. If you do that, you'll find you are invited back more and more to the debate.
Facebook is certainly an interesting company...they're a large company that appears to operate much like a small company. Will be interesting to see if they can keep that up as they get larger, go public, etc.
I'd never heard the story of how Richard Branson started Virgin Atlantic...interesting story.
In '79, when Joan, my fiancee and I were on a holiday in the British Virgin Islands, we were trying to catch a flight to Puerto Rico; but the local Puerto Rican scheduled flight was cancelled. The airport terminal was full of stranded passengers. I made a few calls to charter companies and agreed to charter a plane for $2000 to Puerto Rico. Cheekily leaving out Joan's and my name, I divided the price by the remaining number of passengers, borrowed a blackboard and wrote: VIRGIN AIRWAYS: $39 for a single flight to Puerto Rico.
An analysis by complex systems theorists at the Swiss Federal Institute of Technology reveals that a "super-entity" of just 147 companies that controls 40% of the wealth among the world's transnational corporations. And even worse is how tightly integrated these companies are...large pieces tightly coupled is a recipe for economic disaster.
John Driffill of the University of London, a macroeconomics expert, says the value of the analysis is not just to see if a small number of people controls the global economy, but rather its insights into economic stability.
Concentration of power is not good or bad in itself, says the Zurich team, but the core's tight interconnections could be. As the world learned in 2008, such networks are unstable. "If one [company] suffers distress," says Glattfelder, "this propagates."
"It's disconcerting to see how connected things really are," agrees George Sugihara of the Scripps Institution of Oceanography in La Jolla, California, a complex systems expert who has advised Deutsche Bank.
Here's the idea they came up with: Americans themselves would start lending to small businesses, with Starbucks serving as the middleman. Starbucks would find financial institutions willing to loan to small businesses. Starbucks customers would be able to donate money to the effort when they bought their coffee. Those who gave $5 or more would get a red-white-and-blue wristband, which Schultz labeled "Indivisible." "We are hoping it will bring back pride in the American dream," he says. The tag line will read: "Americans Helping Americans."
This should be a bigger story, shouldn't it? Banks seem less and less interested in lending money to people as their primary business and things like Kickstarter and this Starbucks initiative are taking their place.
A common reaction to Apple's announcement of the iPhone 4S yesterday was disappointment...Mat Honan's post at Gizmodo for instance.
I was hoping for something bold and interesting looking. The iPhone 4 was just that when it shipped. So too were the original iPhone and the iPhone 3G. If I'm going to buy a new phone, of course I want it to look new. Because of course we care about having novel designs. If we didn't we'd all be lugging around some 10-inch thick brick with a 12 day battery life.
Mat's is an understandable reaction. After I upgraded my iPhone, Macbook Pro, and OS X all at once two years ago, I wrote about Apple's upgrade problem:
From a superficial perspective, my old MBP and new MBP felt exactly the same...same OS, same desktop wallpaper, same Dock, all my same files in their same folders, etc. Same deal with the iPhone except moreso...the iPhone is almost entirely software and that was nearly identical. And re: Snow Leopard, I haven't noticed any changes at all aside from the aforementioned absent plug-ins.
So, just having paid thousands of dollars for new hardware and software, I have what feels like my same old stuff.
Deep down, when I stop to think about it, I know (or have otherwise convinced myself) that these purchases were worth it and that Apple's ease of upgrade works almost exactly how it should. But my gut tells me that I've been ripped off. The "newness" cognitive jolt humans get is almost entirely absent.
For me, yesterday's event, Apple's continued success in innovation *and* business, and the recent CEO change provided a different perspective: that Apple makes two very complementary types of products and we should be excited about both types.
The first type of product is the most familiar and is exemplified by Steve Jobs: Apple makes magical products that shape entire industries and modify social structures in significant ways. These are the bold strokes that combine technology with design in a way that's almost artistic: Apple II, Macintosh, iPod, iPhone, and iPad. When they were introduced, these products were new and exciting and no one quite knew where those products were going to take us (Apple included). That's what people want to see when they go to Apple events: Steve Jobs holding up a rainbow-hued unicorn that you can purchase for your very own.
The second type of product is less noticed and perhaps is best exemplified by Apple's new CEO, Tim Cook: identify products and services that work, continually refine them, innovate at the margins (the addition of Siri to the iPhone 4S is a good example of this), build interconnecting ecosystems around them, and put processes and infrastructure in place to produce ever more of these items at lower cost and higher profit. The wheel has been invented; now we'll perfect it. This is where Apple is at with the iPhone now, a conceptually solved problem: people know what they are, what they're used for, and Apple's gonna knuckle down and crank out ever better/faster/smarter versions of them in the future. Many of Apple's current products are like this, better than they have ever been, more popular than they have ever been, but there's nothing magical about them anymore: iPhone 4S, iPod, OS X, iMacs, Macbooks, etc.
The exciting thing about this second type of product, for investors and consumers alike, is Apple is now expert at capturing their lightning in a bottle. 'Twas not always so...Apple wasn't able to properly capitalize on the success of the Macintosh and it almost killed the company. What Tim Cook ultimately held up at Apple's event yesterday is a promise: there won't be a return to the Apple of the 1990s, when the mighty Macintosh devolved into a flaky, slow, and (adding insult to injury) expensive klunker and they couldn't decide on a future direction for their operating system (remember Copland?). There will be an iPhone 5 in the future and it will be better than the iPhone 4S in significant & meaningful ways but it will also *just work*. And while that might be a bit boring to Apple event watchers, this interconnected web of products is the thing that makes the continued development of the new and magical products possible.
New Tumblr: Things Apple is Worth More Than. Such as: the GDP of Singapore, every single home in Atlanta, Georgia, and all the illegal drugs in the world.
Qwikster will rent you DVDs and Netflix will rent you streaming movies. Two separate sites/companies, no interop, you have to sub to both separately, etc. Here's the explanation from Netflix CEO Reed Hastings. This seems amazingly dumb at first blush. (ps. Qwikster?!!)
Netflix's holy grail is to get each person, not each household, to have a separate streaming subscription, the way everyone also has a separate Facebook account. Separating a per-household service like DVD rentals-by-mail helps simplify that eventual transition.
Speaking of fruit, you may think a banana is just a banana, but it's not. Dole and other banana growers have turned the creation of a banana into a science, in part to manipulate perceptions of freshness. In fact, they've issued a banana guide to greengrocers, illustrating the various color stages a banana can attain during its life cycle. Each color represents the sales potential for the banana in question. For example, sales records show that bananas with Pantone color 13-0858 (otherwise known as Vibrant Yellow) are less likely to sell than bananas with Pantone color 12-0752 (also called Buttercup), which is one grade warmer, visually, and seems to imply a riper, fresher fruit. Companies like Dole have analyzed the sales effects of all varieties of color and, as a result, plant their crops under conditions most ideal to creating the right 'color.'
TO SEE how profoundly the book business is changing, watch the shelves. Next month IKEA will introduce a new, deeper version of its ubiquitous "BILLY" bookcase. The flat-pack furniture giant is already promoting glass doors for its bookshelves. The firm reckons customers will increasingly use them for ornaments, tchotchkes and the odd coffee-table tome-anything, that is, except books that are actually read.
In the first five months of this year sales of consumer e-books in America overtook those from adult hardback books. Just a year earlier hardbacks had been worth more than three times as much as e-books, according to the Association of American Publishers. Amazon now sells more copies of e-books than paper books. The drift to digits will speed up as bookshops close. Borders, once a retail behemoth, is liquidating all of its American stores.
By 1941, The advertising agency reported to [De Beers] that it had already achieved impressive results in its campaign. The sale of diamonds had increased by 55 percent in the United States since 1938, reversing the previous downward trend in retail sales. N. W. Ayer noted also that its campaign had required "the conception of a new form of advertising which has been widely imitated ever since. There was no direct sale to be made. There was no brand name to be impressed on the public mind. There was simply an idea -- the eternal emotional value surrounding the diamond." It further claimed that "a new type of art was devised ... and a new color, diamond blue, was created and used in these campaigns.... "
In its 1947 strategy plan, the advertising agency strongly emphasized a psychological approach. "We are dealing with a problem in mass psychology. We seek to ... strengthen the tradition of the diamond engagement ring -- to make it a psychological necessity capable of competing successfully at the retail level with utility goods and services...." It defined as its target audience "some 70 million people 15 years and over whose opinion we hope to influence in support of our objectives." N. W. Ayer outlined a subtle program that included arranging for lecturers to visit high schools across the country. "All of these lectures revolve around the diamond engagement ring, and are reaching thousands of girls in their assemblies, classes and informal meetings in our leading educational institutions," the agency explained in a memorandum to De Beers. The agency had organized, in 1946, a weekly service called "Hollywood Personalities," which provided 125 leading newspapers with descriptions of the diamonds worn by movie stars. And it continued its efforts to encourage news coverage of celebrities displaying diamond rings as symbols of romantic involvement. In 1947, the agency commissioned a series of portraits of "engaged socialites." The idea was to create prestigious "role models" for the poorer middle-class wage-earners. The advertising agency explained, in its 1948 strategy paper, "We spread the word of diamonds worn by stars of screen and stage, by wives and daughters of political leaders, by any woman who can make the grocer's wife and the mechanic's sweetheart say 'I wish I had what she has.'"
It's fascinating to watch the advertising beast change its tactics as the diamond monopoly's needs shift with new supply, new markets, and unexpected success.
There's been a lot written about Steve Jobs in the past week, a lot of it worthy of reading, but one piece you probably didn't see is David Galbraith's piece on Jobs' similarity to architect Norman Foster. The essay is a bit all over the place, which replicates the experience of talking to David in person, but it's littered with insight and goodness (ditto).
The answer is what might be called the sand pile model and it operated at Apple and Fosters, the boss sits independently from the structural hierarchy, to some extent, and can descend at random on a specific element at will. The boss maintains control of the overall house style by cleaning up the edges at the same time as having a vision for the whole, like trying to maintain a sand pile by scooping up the bits that fall off as it erodes in the wind. This is the hidden secret of design firms or prolific artists, the ones where journalists or historians agonize whether a change in design means some new direction when it just means that there was a slip up in maintaining the sand pile.
And I love this paragraph, which integrates Foster, Jobs, the Soviet Union, Porsche, Andy Warhol, Lady Gaga, and even an unspoken Coca-Cola into an extended analogy:
Perfecting the model of selling design that is compatible with big business, Foster simultaneously grew one of the largest architecture practices in the world while still winning awards for design excellence. The secret was to design buildings like the limited edition, invite only Porsches that Foster drove and fellow Porsche drivers would commission them. Jobs went further, however, he managed to create products that were designed like Porsches and made them available to everyone, via High Tech that transcended stylistic elements. An Apple product really was high technology and its form followed function, it went beyond the Porsche analogy by being truly fit for purpose in a way that a Porsche couldn't, being a car designed for a speed that you weren't allowed to drive. Silicon Valley capitalism had arguably delivered what the Soviets had dreamed of and failed, modernism for the masses. An iPhone really is the best phone you can buy at any price. To paraphrase Andy Warhol: Lady Gaga uses an iPhone, and just think, you can have an iPhone too. An iPhone is an iPhone and no amount of money can get you a better phone. This was what American modernism was about.
And as usual, the definitive review of any new version of OS X is John Siracusa's for Ars Technica. This time around, it runs 19 pages. If that's not to your liking, you can just download Lion right now from the Mac App Store for $30.
Two other misc Apple thoughts: 1) They appear to have discontinued the MacBook. There are Airs and Pros but no plain-old MacBooks. 2) Apple Inc, already among the largest companies in the world in terms of market cap, announced yesterday that the company's "revenue [is] up 82 percent and profits [are] up 125 percent" over the same quarter last year. That level of growth in such a big company...that's just astounding. And much of the revenue and profit are from products that didn't exist even five years ago...the iPad alone was a ~$5 billion business in Q3 (for comparison, Google had $9 billion in total revenues in Q2). If that's not unprecedented, it's damn close.
From 1990, a NY Times article on a new factory built by Next, the company Steve Jobs started after he left Apple. The more you learn about Next, the more you realize just how much Next DNA there is in the current incarnation of Apple. The story of Apple's second coming could easily be written as the triumph of Next. This section from the middle of the article articulates perfectly Apple's current approach to manufacturing:
Indeed, critics of Mr. Jobs, who is 35 years old, say he is wasting his money by building a factory at this point. With the small number of machines he is building today, it would have been cheaper simply to contract with other companies to assemble the computers, they say.
But Dr. Piszczalski said the initial high investment in an automated factory may permit Next more control of its expenses while volumes are low.
And backers of Mr. Jobs note that he has a long-term strategy in which manufacturing makes sense. "Steve will be in business for the long pull," said H. Ross Perot, one of Next's investors. "He's not in business for six months."
Next's products have yet to gain a significant share of the marketplace, but Mr. Jobs, who has a reputation for painstaking attention to detail and a passion for the importance of manufacturing, argues that by linking this flexible factory more closely than ever to Next's research and development process, his company can gain a strategic advantage in the industry that will eventually pay off in larger sales.
In Mr. Jobs's view, the factory testifies to the fact that the United States can still compete as both a low-cost and a world-class manufacturer when it sets its mind to the task.
Mr. Jobs said he modeled the factory after those of Japanese corporations like the Sony Corporation that have perfected a design-for-manufacturing strategy that transforms the factory floor into an extension of the company research and development center.
Update: Next made a documentary on how computers are made at the new factory.
That's got to be a Hans Zimmer soundtrack, yes? (via @mgrdcm)
UBS: If we were playing Russian roulette and had one bullet, I randomly spun the chamber and fired but nothing was fired. Would you rather fire the gun again or respin the chamber and then fire on your turn?
I'd rather get the fuck out of your office and run away very fast. What the hell are you people on? Haven't you heard of email? Or official dispute procedures? Jesus.
Based on his answer to P&G's "sell me an invisible pen", I'd hire Turnbull in a second if I were selling invisible pens.
We get a much clearer picture of the real standing of countries if we consider economic growth and GDP per capita. Western Europe GDP per capita was higher than that of both China and India by 1500; by 1600 it was 50% higher than China's. From there, the gap kept growing. Between 1350 and 1950 -- six hundred years -- GDP per capita remained roughly constant in India and China (hovering around $600 for China and $550 for India). In the same period, Western European GDP per capita went from $662 to $4,594, a 594 percent increase.
But in the future, corporations will find it more difficult to achieve such easy growth:
Attention behaves the same way. Take an average housewife, the target of much time mining early in the 20th century. It was clear where her attention was directed. Laundry, cooking, walking to the well for water, cleaning, were all obvious attention sinks. Washing machines, kitchen appliances, plumbing and vacuum cleaners helped free up a lot of that attention, which was then immediately directed (as corporate-captive attention) to magazines and television.
But as you find and capture most of the wild attention, new pockets of attention become harder to find. Worse, you now have to cannibalize your own previous uses of captive attention. Time for TV must be stolen from magazines and newspapers. Time for specialized entertainment must be stolen from time devoted to generalized entertainment.
[...]
Each new pocket of attention is harder to find: maybe your product needs to steal attention from that one TV obscure show watched by just 3% of the population between 11:30 and 12:30 AM. The next displacement will fragment the attention even more. When found, each new pocket is less valuable. There is a lot more money to be made in replacing hand-washing time with washing-machine plus magazine time, than there is to be found in replacing one hour of TV with a different hour of TV.
Groupon has filed its S-1 and hopes to raise $750M in its initial public offering. Given they're currently losing a staggering $117M per quarter, despite revenues of $644M, they'll be burning through that cash almost as soon as it hits their account.
At the moment, it's costing them $1.43 to make $1, and it doesn't look like it's getting any cheaper. They're already projected to make close to three billion dollars in revenues this year. If you can't figure out how to make money on three billion in revenue, when exactly will the profit magic be found? Ten billion? Fifty billion?
I feel like the Groupon IPO is an elaborate practical joke.
It was a different time and (as DHH notes) a different company, but when Amazon IPOed in 1997, they lost $27.6 million that year on net sales of $147.8 million. That's an 18% loss for Amazon compared to Groupon's, hey, 18% loss. Amazon didn't report their first profit until Q4 2001. No guarantee whether Groupon will ever turn a profit but something to consider anyway. Oh, and probably not relevant but interesting nonetheless: Amazon CEO Jeff Bezos is an investor in DHH's company, 37signals...and until recently, 37signals co-founder Jason Fried was on Groupon's board of directors.
My situation is blessed and I rarely let a day go by that I don't say a silent prayer in thanks for the position in which I've found myself, but good gracious is this hard.
The most frustrating part is that it is difficult to get into a rhythm in your work when you have no real understanding of the next steps you need to take. There's no opportunity for flow if both outcome and process are foreign experiences. There's just a lot of poking around and mystery and inadvertent negligence.
Svpply has been open to the public for six months now. Our progress has been slow for a variety of reasons. We have not launched as many new features as I would expect, or even drastically improved the ones we launched with. I own these problems, they can be traced directly back to my inabilities and inexperience, sometimes directly, other times in the form of my not having anticipated or recognized situations for what they were as soon as I could have.
James Somers noticed that his equity derivative-trading roommate was the only one of his young professional friends who comes home from work "buoyant and satisfied", so he accompanied him to work one day to see what his job entailed. Turns out he basically plays video games all day.
A trader's job is to be smarter than the market. He converts a mess of analysis and intuition into simple bets. He makes moves. If his predictions are better than everyone else's, he wins money; if not, he loses it. At every moment he has a crystalline picture of his bottom line, the "P and L" (profit and loss) that determines how much of a bonus he'll get and, more importantly, where he stands among his peers. As my friend put it, traders are "very, very, very competitive." At the end of the day they ask each other "how did you do today?" Trading is one of the few jobs with an actual leaderboard, which, if you've ever been on one, or strived to get there, you'll recognize as being perhaps the single most powerful driver of a gamer's engagement.
That seems to be the core of it, but no doubt there are other game-like features in play here: the importance of timing and tactile dexterity; the clear presence of two abstract levels of attention and activity, one long-term and strategic, the other fiercely tactical, localized in bursts a minute or two long; the need for teams and ceaseless chatter; and so on.
Athleticism and competitiveness are often downplayed when we talk about white collar careers but are essential in many disciplines. Doctors (surgeons in particular) have both those traits, founding a startup company is definitely competitive and can be as physically demanding as running, teachers are standing or walking all day long, and even something like programming requires manual dexterity with the mouse & keyboard and the stamina to sit in a chair paying single-minded attention to a task for 10-12 hours a day. (via @tcarmody)
Why has Yahoo! chosen to transition Delicious to AVOS? While we love Delicious (and our users love Delicious), we wanted to find a home for the product where it can receive more love and attention. We think AVOS is that place.
When will AVOS officially start running Delicious? We anticipate Delicious in its current form will be available until approximately July 2011. By agreeing to AVOS's terms of service upfront, you will allow us to move your data when the time comes to transfer control to AVOS.
In the near term, companies making iPhone and iPad competitors are never going to beat Apple at their own game. Apple has supply chain advantages, a massive number of their customers' credit card numbers (why do you think Jobs brings this up at every single Apple event...it's important!), key patents, one-in-lifetime personnel like Steve Jobs and Jony Ive, solid relationships with key media companies, and an integrated ecosystem of stores, apps, applications, and hardware. They are an imposing competitor.
But Apple also has some weak spots which a canny competitor should be able to exploit to make compelling products that Apple won't be able to duplicate or directly compete with.
1. Apple doesn't do social well on a large scale. Ping? Game Center? Please. Social applications don't seem to be in Apple's DNA...their best applications are still single-player or 2/3/4-player. Someone should figure out how to leverage Facebook's social graph to make the phone/app/gaming/music/video experience significantly better than on the iPhone/iPad and then partner exclusively with Facebook to make it happen. The Facebook Fone would be a massive hit if done right.
2. Apple can't do the cloud either. Mobile Me has been around since January 2000 (when it was called iTools) and the service is still not as compelling as newcomer Dropbox. iPods, iPhones, and iPads are still very much tethered to plain-old desktop/laptop computers and iTunes...there's an opportunity here for a better way.
3. iTunes is getting long in the tooth. The cloud and social are the two Apple weaknesses, but iTunes is showing its age and over the years has become a bloated collection of functionalities...music store, video store, app store, mobile device manager, "social" network, and, oh, by the way, you can also use it to play your music. Spotify, Pandora, and Rd.io point the way to a different approach.
4. I can't remember if this is my own theory or I read about this on Daring Fireball or something, but the Apple products & services that Apple does well are the ones that Steve Jobs uses (or cares about) and the ones he doesn't use/care about are less good (or just plain bad). Jobs uses Keynote and it's very good...but I'm pretty sure Jobs never has had to schedule his own appointments with iCal so that program is less good. Cloud apps and social apps are at the top of this list for a reason...I just don't think Jobs cares about those things. I mean, he cares, but there's not a lot of passion there...they aren't a priority for him so he doesn't really know how to think about them and attack those problems.
And then there are a couple of Apple weaknesses that actually aren't weaknesses at all:
1. Price. Everyone still thinks that Apple products are expensive, or, more to the point, overpriced. But no one else has made a compelling tablet for under $500 yet. And if you attack Apple on price, potential gothchas lurk: Apple is absurdly profitable and cash-rich; if they feel the need to compete with anyone on price in order to protect their business interests, they can do so with price cuts deep enough and long enough to drive most potential competitors out of business.
2. Openness and secrecy. Competitors should take a page from Apple's playbook here and be open about stuff that will give you a competitive advantage and shut the hell up about everything else. Open is not always better.
Business Insider has a pair of articles about what they say is the real story about the founding of Twitter. The first is a general outline of the unofficial history of the company versus what you generally hear from the company and its founders.
Glass insists that he is not Twitter's sole founder or anything like it. But he feels betrayed that his role has basically been expunged from Twitter history. He says Florian Webber doesn't get enough credit, either.
"Some people have gotten credit, some people haven't. The reality is it was a group effort. I didn't create Twitter on my own. It came out of conversations."
"I do know that without me, Twitter wouldn't exist. In a huge way."
The second is an interview with Noah Glass, who many people who were there at the beginning of the service consider one of the true cofounders of Twitter.
Jack [Dorsey] was someone who was one of the stars of the company and I got the impression he was unhappy with what he was working on. He was doing a lot of cleanup work on Odeo. He and I had become pretty close friends and were spending time together.
He started talking to me about this idea of status and how he was really interested in status. He developed this bicycle messenger status system in the past. I was trying to figure out what it was he found compelling about it. At the same time, we were looking at 'groups' models and how groups were formed and put a couple things together to look at this idea of status and to look at this idea of grouping and it sort of hit me - the idea for this product. This thing that would be called Twitter, what it would look like. This ad hoc grouping mechanism with non-realtime status updates all based on mobile phones.
There was a moment when I was sitting with Jack and I said, "Oh, I do see how this could really come together to make something really compelling." We were sitting on Mission St. in the car in the rain. We were going out and I was dropping him off and having this conversation. There was a moment where it all fit together for me.
We went back to Odeo and put together a team. A very separate working team, mostly it was myself, Jack, and Florian [Webber], a contractor. [Florian] was working from Germany at the time.
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Jason Fried reveals how he got good at making money. I am not a full-fledged member of the Church of 37signals, but one of my favorite lessons from them is that a business needs to practice how to make money in order to get good at it...it's not something that you just turn on when monetizing mode strikes.
So here's a great way to practice making money: Buy and sell the same thing over and over on Craigslist or eBay. Seriously.
Go buy something on Craigslist or eBay. Find something that's a bit of a commodity, so you know there's always plenty of supply and demand. An iPod is a good test. Buy it, and then immediately resell it. Then buy it again. Each time, try selling it for more than you paid for it. See how far you can push it. See how much profit you can make off 10 transactions.
Start tweaking the headline. Then start fiddling with the product description. Vary the photographs. Take some pictures of the thing for sale; use other photos with other items, or people, in them. Shoot really high-quality shots, and also post crappy ones from your cell-phone camera. Try every variation you can think of.
Here's how you do it well, courtesy of Zappos (of course). Yesterday I tweeted:
I think my wife is having an affair with someone named "Zappos". He sends her a package at least every third day. I am on to you, Mr Zappos!
Almost immediately, Zappos' customer service Twitter account replied:
@jkottke I'm sorry sir, but our relationship with your wife is strictly professional.
Great, right? A company that gets the joke and participates meaningfully in an actual conversation with a full awareness of the context.
Here's how not to do it, courtesy of United Airlines. Mena Trott, a co-founder of Six Apart, had her flight to NYC randomly cancelled on Monday night by "a robot". (They actually blamed it on a robot!) In a series of threetweets, Mena voiced her displeasure:
Thanks @unitedairlines for randomly canceling my miles booked ticket for tonight, taking the miles & not letting me rebook for lack of miles
And then hanging up on me after I waited for an hour! I hate you @unitedairlines
Apparently the automated voice recognition system can't tell what I'm saying through my tears @unitedairlines #IhateYouSoMuch
Reply from @unitedairlines? Nothing. But then while on her rebooked flight the next morning, Mena tweets sarcastically:
Thanks to @unitedairlines I can finally watch that Frasier episode I missed in 1994.
And unbelievably, @unitedairlines replied, pouring burning acid into Mena's obviously still-tender wound:
@dollarshort "...I hear the blues a-callin', Tossed salad and scrambled eggs.."
That is some serious customer service tone deafness right there. It would be easy to blame whatever social media jockey they've got manning the Twitter account for the faux pas, but obviously United customer communication problems run deeper (and originate higher up the pay scale) than that.
Totally depressing article about how Hollywood movies suck worse than ever and "the potential death of the great American art form".
For the studios, a good new idea has become just too scary a road to travel. Inception, they will tell you, is an exceptional movie. And movies that need to be exceptional to succeed are bad business. "The scab you're picking at is called execution," says legendary producer Scott Rudin (The Social Network, True Grit). "Studios are hardwired not to bet on execution, and the terrible thing is, they're right. Because in terms of execution, most movies disappoint."
With that in mind, let's look ahead to what's on the menu for this year: four adaptations of comic books. One prequel to an adaptation of a comic book. One sequel to a sequel to a movie based on a toy. One sequel to a sequel to a sequel to a movie based on an amusement-park ride. One prequel to a remake. Two sequels to cartoons. One sequel to a comedy. An adaptation of a children's book. An adaptation of a Saturday-morning cartoon. One sequel with a 4 in the title. Two sequels with a 5 in the title. One sequel that, if it were inclined to use numbers, would have to have a 7 1/2 in the title.
We have to be very clever about those things. You have to remember that it's only a few hundred years, if that much, that artists are working with money. Artists never got money. Artists had a patron, either the leader of the state or the duke of Weimar or somewhere, or the church, the pope. Or they had another job. I have another job. I make films. No one tells me what to do. But I make the money in the wine industry. You work another job and get up at five in the morning and write your script.
This idea of Metallica or some rock n' roll singer being rich, that's not necessarily going to happen anymore. Because, as we enter into a new age, maybe art will be free. Maybe the students are right. They should be able to download music and movies. I'm going to be shot for saying this. But who said art has to cost money? And therefore, who says artists have to make money?
In the old days, 200 years ago, if you were a composer, the only way you could make money was to travel with the orchestra and be the conductor, because then you'd be paid as a musician. There was no recording. There were no record royalties. So I would say, "Try to disconnect the idea of cinema with the idea of making a living and money." Because there are ways around it.
I've probably written about this somewhere and somewhen before, but here it is again because I want to make sure I have it in case the original source is lost. Back when Stewart Butterfield & co. started Ludicorp (which was sold to Yahoo! along with Flickr), their about page listed a corporate philosophy so fantastic that it's the only such philosophy I've pumped my fist at. It takes the form of a passage from Disclosing New Worlds: Entrepreneurship, Democratic Action and the Cultivation of Solidarity by Charles Spinosa, Fernando Flores & Hubert Dreyfus:
Business owners do not normally work for money either. They work for the enjoyment of their competitive skill, in the context of a life where competing skillfully makes sense. The money they earn supports this way of life. The same is true of their businesses. One might think that they view their businesses as nothing more than machines to produce profits, since they do closely monitor their accounts to keep tabs on those profits.
But this way of thinking replaces the point of the machine's activity with a diagnostic test of how well it is performing. Normally, one senses whether one is performing skillfully. A basketball player does not need to count baskets to know whether the team as a whole is in flow. Saying that the point of business is to produce profit is like saying that the whole point of playing basketball is to make as many baskets as possible. One could make many more baskets by having no opponent.
The game and styles of playing the game are what matter because they produce identities people care about. Likewise, a business develops an identity by providing a product or a service to people. To do that it needs capital, and it needs to make a profit, but no more than it needs to have competent employees or customers or any other thing that enables production to take place. None of this is the goal of the activity.
To which the Ludicorporate added: "The goal is to kick ass."
The jewelry business -- like many other businesses, especially those that depend on selling -- lends itself to lies. It's hard to make money selling used Rolexes as what they are, but if you clean one up and make it look new, suddenly there's a little profit in the deal. Grading diamonds is a subjective business, and the better a diamond looks to you when you're grading it, the more money it's worth -- as long as you can convince your customer that it's the grade you're selling it as. Here's an easy, effective way to do that: First lie to yourself about what grade the diamond is; then you can sincerely tell your customer "the truth" about what it's worth.
As I would tell my salespeople: If you want to be an expert deceiver, master the art of self-deception. People will believe you when they see that you yourself are deeply convinced. It sounds difficult to do, but in fact it's easy -- we are already experts at lying to ourselves. We believe just what we want to believe. And the customer will help in this process, because she or he wants the diamond -- where else can I get such a good deal on such a high-quality stone? -- to be of a certain size and quality. At the same time, he or she does not want to pay the price that the actual diamond, were it what you claimed it to be, would cost. The transaction is a collaboration of lies and self-deceptions.
Let the design team be the design experts. Your job is to be the business expert. Ask them how their design solutions meet your business goals. If you trust your design team, and they can explain how their recommendations map to those goals, you're fine. If you neither trust them, nor can they defend their choices it's time to get a new design team.
This should be printed out and nailed into the forehead of every designer and their clients a la Luther's Ninety-Five Theses, you know, for easy reference.
- my word is my bond
- take my game to the next level (from the concrete streets to executive suites)
- take care my bitches more better
- minimize my budget (cash cars, houses, etc.)
- keep a good photographer
The merchant, Vitaly Borker, 34, who operates a Web site called decormyeyes.com, was charged with one count each of mail fraud, wire fraud, making interstate threats and cyberstalking. The mail fraud and wire fraud charges each carry a maximum sentence of 20 years in prison. The stalking and interstate threats charges carry a maximum sentence of five years.
He was arrested early Monday by agents of the United States Postal Inspection Service. In an arraignment in the late afternoon in United States District Court in Lower Manhattan, Judge Michael H. Dolinger denied Mr. Borker's request for bail, stating that the defendant was either "verging on psychotic" or had "an explosive personality." Mr. Borker will be detained until a preliminary hearing, scheduled for Dec. 20.
Lord Adair Turner, the chairman of Britain's top financial watchdog, the Financial Services Authority, has described much of what happens on Wall Street and in other financial centers as "socially useless activity" -- a comment that suggests it could be eliminated without doing any damage to the economy. In a recent article titled "What Do Banks Do?," which appeared in a collection of essays devoted to the future of finance, Turner pointed out that although certain financial activities were genuinely valuable, others generated revenues and profits without delivering anything of real worth -- payments that economists refer to as rents. "It is possible for financial activity to extract rents from the real economy rather than to deliver economic value," Turner wrote. "Financial innovation...may in some ways and under some circumstances foster economic value creation, but that needs to be illustrated at the level of specific effects: it cannot be asserted a priori."
Turner's viewpoint caused consternation in the City of London, the world's largest financial market. A clear implication of his argument is that many people in the City and on Wall Street are the financial equivalent of slumlords or toll collectors in pin-striped suits. If they retired to their beach houses en masse, the rest of the economy would be fine, or perhaps even healthier.
I particularly enjoyed the characterization of banking as a utility:
Most people on Wall Street, not surprisingly, believe that they earn their keep, but at least one influential financier vehemently disagrees: Paul Woolley, a seventy-one-year-old Englishman who has set up an institute at the London School of Economics called the Woolley Centre for the Study of Capital Market Dysfunctionality. "Why on earth should finance be the biggest and most highly paid industry when it's just a utility, like sewage or gas?" Woolley said to me when I met with him in London. "It is like a cancer that is growing to infinite size, until it takes over the entire body."
p.s. Thanks to Typekit, the New Yorker's web site now uses the same familiar typefaces that you find in the magazine. Looks great.
Incanto owner Mark Pastore explains why his restaurant isn't on Opentable. His analysis is that Opentable is too expensive and monopolistic to offer much in the way of value to restaurants.
The recurring themes were the opinion that OpenTable took home a disproportionate (relative to other vendors) chunk of the restaurants' revenues each month and the feeling of being trapped in the service, it was too expensive to keep, but letting it go could be harmful. The GM of one very well known New York restaurant group, which spends thousands of dollars on OpenTable each month, put it to me this way, "OpenTable is out for itself, the worst business partner I have ever worked with in all my years in restaurants. If I could find a way to eliminate it from my restaurants I would." Another high-profile, 3.5-star San Francisco restaurateur told me he feels held hostage by OpenTable. For the past several years, his payments to them have been substantially more than he has himself earned from 80-hour workweeks at his restaurant. But he believes that if he stops offering it, his customers will revolt and many would stop coming to his restaurant. So he keeps paying, but carries a grudge and wishes for something better.
In his office, by a coffee table stacked with art books (Damien Hirst, Ed Ruscha), his Forbes magazine and a humidor, he perches on the edge of a chair with his fingers tucked into his pockets. He says he'll always rap about variations on the same themes: drug hustling, business boasts, luxury hopscotching from Gucci to Louis Vuitton to the new Dior suit he says is a perfect fit. They're all narrative devices:
"I'm just describing a scene, but the crux of the story is the message. Almost like a movie. Setting: South of France. This is what's happening. This guy from out the projects who didn't graduate from high school is now living this sort of life. And this is how he got here."
"My friends keep talking to me about how they want to start a Web site, but they need to get some backing, and I look at them and ask them what they are waiting for," Mr. Sicha said. "All it takes is some WordPress and a lot of typing. Sure, I went broke trying to start it, it trashed my life and I work all the time, but other than that, it wasn't that hard to figure out."
I enjoyed this extensive interview with John Sculley about his time at Apple (he was CEO from 83-93) because of 1) his insight into Steve Jobs' way of thinking, 2) his willingness to talk about his mistakes, and 3) his insights about business in general...he gives Jobs a lot of credit but Sculley is clearly no slouch. Some high points:
[Jobs] felt that the computer was going to change the world and it was going to become what he called "the bicycle for the mind."
On the small size of teams actually building products:
Normally you will only see a handful of software engineers who are building an operating system. People think that it must be hundreds and hundreds working on an operating system. It really isn't. It's really just a small team of people. Think of it like the atelier of an artist.
Sculley was president of Pepsi before coming to Apple:
We did some research and we discovered that when people were going to serve soft drinks to a friend in their home, if they had Coca Cola in the fridge, they would go out to the kitchen, open the fridge, take out the Coke bottle, bring it out, put it on the table and pour a glass in front of their guests.
If it was a Pepsi, they would go out in to the kitchen, take it out of the fridge, open it, and pour it in a glass in the kitchen, and only bring the glass out. The point was people were embarrassed to have someone know that they were serving Pepsi. Maybe they would think it was Coke because Coke had a better perception. It was a better necktie. Steve was fascinated by that.
On why he should not have been hired as Apple's CEO:
The reason why I said it was a mistake to have hired me as CEO was Steve always wanted to be CEO. It would have been much more honest if the board had said, "Let's figure out a way for him to be CEO. You could focus on the stuff that you bring and he focuses on the stuff he brings."
Remember, he was the chairman of the board, the largest shareholder and he ran the Macintosh division, so he was above me and below me.
After Jobs left, Sculley tried to run the company as Jobs would have:
All the design ideas were clearly Steve's. The one who should really be given credit for all that stuff while I was there is really Steve. [...] Unfortunately, I wasn't as good at it as he was.
And finally, Sculley and Jobs probably haven't spoken since Jobs left the company:
He won't talk to me, so I don't know.
Jobs is pulling a page from the Don Draper playbook here. In season two, Don tells mental hospital patient Peggy:
Peggy listen to me, get out of here and move forward. This never happened. It will shock you how much it never happened.
Maybe Jobs is still pissed at Sculley and holds a grudge or whatever, but it seems more likely that looking backwards is something that Jobs simply doesn't do. Move forward, Steve.
The problem -- in Blockbuster's case, at least -- was that the very features that people thought were strengths turned out to be weaknesses. Blockbuster's huge investment, both literally and psychologically, in traditional stores made it slow to recognize the Web's importance: in 2002, it was still calling the Net a "niche" market. And it wasn't just the Net. Blockbuster was late on everything -- online rentals, Redbox-style kiosks, streaming video. There was a time when customers had few alternatives, so they tolerated the chain's limited stock, exorbitant late fees (Blockbuster collected about half a billion dollars a year in late fees), and absence of good advice about what to watch. But, once Netflix came along, it became clear that you could have tremendous variety, keep movies as long as you liked, and, thanks to the Netflix recommendation engine, actually get some serviceable advice. (Places like Netflix and Amazon have demonstrated the great irony that computer algorithms can provide a more personalized and engaging customer experience than many physical stores.) Then Redbox delivered the coup de grace, offering new Hollywood releases for just a dollar.
A reporter for the Toronto Star handed out prepaid credit cards to panhandlers and waited to see what happened.
"Can I trust you with this?" I said, handing him a $50 card and telling him to buy what he needs, but that I need it back when he was done. He nodded and scrambled to his feet. He said he would be back in a half-hour.
He came back right on time, slurping from a large McDonald's soft drink cup -- root beer -- and with sweat on his brow. He wanted to have pork and rice from a Vietnamese noodle joint on Spadina but they wouldn't take the card. So, he scrambled to McDonald's. Lunch was a double quarter-pounder with cheese.
The reporter's offer was frequently declined, which seems surprising at first. But panhandlers are savvy businesspeople. They didn't want a short-term and potentially risky venture interfering with their main panhandling income stream. Eyes on the prize. (via the browser)
Privately held Trader Joe's is highly secretive and doesn't do interviews, so Fortune did some digging around to see what makes the retail chain such a success.
A ringing bell instead of an intercom signals that more help is needed at the registers. Registers don't have conveyor belts or scales, and perishables are sold by unit instead of weight, speeding up checkout. Crew members aren't told the margins on products, so placement decisions are made based not on profits but on what's best for the shopper. Every employee works all aspects of the store, and if you ask where the roasted chestnuts are he'll walk you over instead of just saying "aisle five." Want to know what they taste like? He can probably tell you, and he might even open the bag on the spot for you to try.
Customer service, pay people well, and trust them to do good work. That and be clever about what you sell and to whom.
Patrick Calello tells the story of how Automoblox (a wooden car toy) came about. Lots of business lessons to be gleaned from this one.
Mr. Ling, one of the partners from the injection molding factory, picked up Henry and me at our hotel. Henry was quick to inform Mr. Ling that he did not speak Cantonese, the local language. This deception positioned Henry as a spy for me, pretending to not understand the conversations between my agent, Lenny, the molder, Mr. Ling, and the tool maker. After a short while, Henry pulled me aside and advised me to get my business out of Swift Tread as swiftly as possible. He overheard the toolmaker tell Mr. Ling that there was nothing else he could do to adjust the mold. Henry also learned that my agent, Vinnie -- who was supposed to have my interests at heart -- was really protecting the interests of the molder.
My three-year-old son has four Automoblox cars. He loves them and plays with them as much as all his other toys and books combined. (via hello typepad)
I left Seattle pretty sure that Amazon would be a better partner for Zappos than our current board of directors or any other outside investor. Our board wanted an immediate exit; we wanted to build an enduring company that would spread happiness. With Amazon, it seemed that Zappos could continue to build its culture, brand, and business. We would be free to be ourselves.
One friend, an American who works in film, was paid to represent a Canadian company and give a speech espousing a low-carbon future. Another was flown to Shanghai to act as a seasonal-gifts buyer. Recruiting fake businessmen is one way to create the image -- particularly, the image of connection -- that Chinese companies crave. My Chinese-language tutor, at first aghast about how much we were getting paid, put it this way: "Having foreigners in nice suits gives the company face."
Charles Munger, who works with Warren Buffett as Vice-Chairman of Berkshire Hathaway, gave a talk at USC Business School in 1994 that is very much worth reading. Although the main point of Munger's talk is how to pick stocks, he spends much of the time talking about "the art of worldly wisdom"...basically what you need to know to be a functional human being who can make informed decisions.
I have a name for people who went to the extreme efficient market theory-which is "bonkers". It was an intellectually consistent theory that enabled them to do pretty mathematics. So I understand its seductiveness to people with large mathematical gifts. It just had a difficulty in that the fundamental assumption did not tie properly to reality. [...]
The model I like -- to sort of simplify the notion of what goes on in a market for common stocks -- is the pari-mutuel system at the racetrack. If you stop to think about it, a pari-mutuel system is a market. Everybody goes there and bets and the odds change based on what's bet. That's what happens in the stock market.
Any damn fool can see that a horse carrying a light weight with a wonderful win rate and a good post position etc., etc. is way more likely to win than a horse with a terrible record and extra weight and so on and so on. But if you look at the odds, the bad horse pays 100 to 1, whereas the good horse pays 3 to 2. Then it's not clear which is statistically the best bet using the mathematics of Fermat and Pascal. The prices have changed in such a way that it's very hard to beat the system.
O'Reilly says he sometimes wonders what would have happened if he had raised venture capital and given his company a chance to get really big. But he sounds more amused by this question than truly troubled by it. "Money is like gasoline during a road trip," he says. "You don't want to run out of gas on your trip, but you're not doing a tour of gas stations. You have to pay attention to money, but it shouldn't be about the money."
Management is the ideal technology if you're seeking compliance -- getting people to do what you want them to do, the way you want them to do it. But in today's workforce, which demands much more in the way of creative and conceptual capabilities, we don't want compliance. We want engagement. And self-direction is a far better technology for engagement.
Twitter announced their long-awaited advertising model last night: Promoted Tweets. Companies and people will be able to purchase tweets that will show up first in certain search results or right in people's tweet streams. Which, if you rewind the clock a few years, is exactly the sort of thing that used to get people all upset with search engine results...and is one of the (many) reasons that Google won the search wars: they kept their sponsored results and organic results separate. It will be interesting to see if the world has changed in that time.
The magic to our hamburgers is quality control. We toast our buns on a grill -- a bun toaster is faster, cheaper, and toasts more evenly, but it doesn't give you that caramelized taste. Our beef is 80 percent lean, never frozen, and our plants are so clean, you could eat off the floor. The burgers are made to order -- you can choose from 17 toppings. That's why we can't do drive-throughs -- it takes too long. We had a sign: "If you're in a hurry, there are a lot of really good hamburger places within a short distance from here." People thought I was nuts. But the customers appreciated it.
Good name too. My son frequently asks if we're "going to go visit the five guys" to get "hangleburgers and peanuts".
To be eligible for employment as a pirate, a volunteer should already possess a firearm for use in the operation. For this 'contribution', he receives a 'class A' share of any profit. Pirates who provide a skiff or a heavier firearm, like an RPG or a general purpose machine gun, may be entitled to an additional A-share. The first pirate to board a vessel may also be entitled to an extra A-share.
In defending itself against a copyright lawsuit brought by Viacom, YouTube notes that the media company has been surreptitiously uploading its copyrighted content to YouTube for years.
For years, Viacom continuously and secretly uploaded its content to YouTube, even while publicly complaining about its presence there. It hired no fewer than 18 different marketing agencies to upload its content to the site. It deliberately "roughed up" the videos to make them look stolen or leaked. It opened YouTube accounts using phony email addresses. It even sent employees to Kinko's to upload clips from computers that couldn't be traced to Viacom. And in an effort to promote its own shows, as a matter of company policy Viacom routinely left up clips from shows that had been uploaded to YouTube by ordinary users. Executives as high up as the president of Comedy Central and the head of MTV Networks felt "very strongly" that clips from shows like The Daily Show and The Colbert Report should remain on YouTube.
I heard that the staff of the Daily Show and Colbert Report upload the shows to YouTube as soon as they can after the shows air and then the next day, lawyers from Comedy Central hit YouTube with takedown requests for the uploaded shows.
Companies who target the middle of the market (Sony, Dell, General Motors) are losing customers to companies like Apple & Hermes at the high end and Ikea & H&M at the low end. From James Surowiecki:
The products made by midrange companies are neither exceptional enough to justify premium prices nor cheap enough to win over value-conscious consumers. Furthermore, the squeeze is getting tighter every day. Thanks to economies of scale, products that start out mediocre often get better without getting much more expensive -- the newest Flip, for instance, shoots in high-def and has four times as much memory as the original -- so consumers can trade down without a significant drop in quality. Conversely, economies of scale also allow makers of high-end products to reduce prices without skimping on quality. A top-of-the-line iPod now features video and four times as much storage as it did six years ago, but costs a hundred and fifty dollars less. At the same time, the global market has become so huge that you can occupy a high-end niche and still sell a lot of units. Apple has just 2.2 per cent of the world cell-phone market, but that means it sold twenty-five million iPhones last year.
I work in the film business, where schmoozing is an art form, lunch hour lasts from 12:30 until 3, and every meeting takes an hour whether there's an hour's worth of business or not. Not so at Vogue, where meetings are long if they go more than seven minutes and everyone knows to show up on time, prepared and ready to dive in. In Anna's world, meetings often start a few minutes before they're scheduled. If you arrive five minutes late, chances are you'll have missed it entirely. Imagine the hours of time that are saved every day by not wasting so much of it in meetings.
Three out of the top 40 Hollywood earners for 2009 are the 20-something stars of the Harry Potter films...Daniel Radcliffe is sixth on the list, below James Cameron but above Jerry Bruckheimer. Robert Pattinson makes the list at #35 (Kristen Stewart is at #37)...I expect those totals will go up if the Twilight films continue to do well.
John Mackey, the co-founder and chief executive of Whole Foods Market, refers to the company as his child-not just his creation but the thing on earth whose difficulties or downfall it pains him most to contemplate. He also sees himself as a "daddy" to his fifty-four thousand employees, who are known as "team members," but they may occasionally consider him to be more like a crazy uncle. To the extent that a child inherits or adopts a parent's traits, Whole Foods is an embodiment of many of Mackey's. A Whole Foods store, in some respects, is like Mackey's mind turned inside out. Certainly, the evolution of the corporation has often traced his own as a man; it has been an incarnation of his dreams and quirks, his contradictions and trespasses, and whatever he happened to be reading and eating, or not eating.
Money in your PayPal account will be held for 180 days. After 180 days, we'll email you information on how to receive your funds. We regret any inconvenience this may cause.
Nice. PayPal can unilaterally decide you're being fraudulent and keep your money for six months while they collect the interest on it. Holy fucking conflict of interest, Batman! Are banks just naturally customer hostile?
Update: Feedback from several people: PayPal is not a bank and therefore they can do (and do do) anything they want.
Jared Diamond has come to believe that some large multinational companies (like Chevron, Wal-Mart, and Coca-Cola) are "among the world's strongest positive forces for environmental sustainability".
The embrace of environmental concerns by chief executives has accelerated recently for several reasons. Lower consumption of environmental resources saves money in the short run. Maintaining sustainable resource levels and not polluting saves money in the long run. And a clean image -- one attained by, say, avoiding oil spills and other environmental disasters -- reduces criticism from employees, consumers and government.
Discontent has steadily grown among formerly stalwart DWR supporters. New York-based textile designer Sandy Chilewich, whose rugs and mats are stocked by DWR ($280 to $600), says she's considering pulling her business and has been talking with other DWR designers about banding together to "tell them we don't approve." Eames Demetrios, grandson of Charles and Ray Eames and the guardian of their legacy, says, "DWR has been a great ambassador for the Eames story and DWR hasn't carried knockoff Eames product, but I think one needs to look beyond that. In the long run, we don't see our authentic product being sold next to knockoff products of any kind."
There is much about the restaurant that is inefficient, as MBAs are quick to note: Adrià should lower his staff numbers, use cheaper ingredients, improve his supply chain, and increase the restaurant's hours of operation. But "fixing" elBulli turns it into just another restaurant, says Norton: "The things that make it inefficient are part of what makes it so valuable to people."
After four years, I've finally figured the show out. The Office is not a random series of cynical gags aimed at momentarily alleviating the existential despair of low-level grunts. It is a fully-realized theory of management that falsifies 83.8% of the business section of the bookstore.
Even if you're only an occasional viewer of the show, this is worth reading through, especially if you work in an office environment. (thx, zach)
I thought about his rant this week as the nation's largest carriers reported first-quarter earnings. Or, more accurately, first-quarter losses. Except for AirTran and JetBlue, they all lost money. The legacy airlines -- Delta/Northwest, American, United, Continental and US Airways -- lost a lot of money. Collectively about $1.9 billion, in fact. Their revenue plummeted, too.
And do you know what most of them wanted to talk about? You guessed it. The baskets of ancillary revenue they're harvesting by charging us fees for checking bags, choosing coach seats or whatever. Forget that their houses are burning down. They found a tap in the bathtub with some water leaking out, so they're thrilled.
We agreed that a lot of what we then considered "working hard" was actually "freaking out". Freaking out included panicking, working on things just to be working on something, not knowing what we were doing, fearing failure, worrying about things we needn't have worried about, thinking about fund raising rather than product building, building too many features, getting distracted by competitors, being at the office since just being there seemed productive even if it wasn't -- and other time-consuming activities. This time around we have eliminated a lot of freaking out time. We seem to be working less hard this time, even making it home in time for dinner.
I would likely give the same advice, but I wonder if it's actually true. Perhaps working hard/freaking out was exactly what was needed at the time, whether or not it seems efficient or correct in retrospect. You need to travel that road so you can find a better way the second time around.
We catch back up with the people we met in 2008, to see how they've fared over the last 18 months. We talk to Clarence Nathan, who in 2008 received a half million dollar loan that he said he wouldn't have given himself; Jim Finkel, a Wall Street finance guy, who put together and managed complicated mortgage-based financial securities; Richard Campbell, the Marine who was facing foreclosure; and Glen Pizzolorusso, the mortgage company sales manager who led the life of a b-list celebrity.
Few technology and device-making companies probably realize it, but they are in direct competition with Apple (or soon will be). How did this happen? Well, the iPhone1 does a lot of useful things pretty well, well enough that it is replacing several specialized devices that do one or two things really well. Space in backpacks, pockets, and purses is a finite resource, as is money (obviously). As a result, many are opting to carry only the iPhone with them when they might have toted several devices around. Here is a short list of devices with capabilities duplicated to some degree by the iPhone:
Mobile phone - All the stuff any mobile phone does: phone calls, texting, voicemail.
PDA - The iPhone meets all of the basic PDA needs: address book, calendar, to-dos, notes, and easy data syncing.
iPod - The iPhone is a full-featured music-playing device. And with 32 GB of storage, the 3GS can handle a huge chunk of even the largest music collection.
Point and shoot camera - While not as full-featured as something like a PowerShot, the camera on the iPhone 3GS has a 3-megapxiel lens with both auto and manual focus, shoots in low-light, does macro, and can shoot video. Plus, it's easy to instantly publish your photos online using the iPhone's networking capabilities and automatically tag your photos with your location.
Personal computer - With the increased speed of the iPhone 3GS, the 3G and wifi networking, a real web browser, and the wide array of available apps at the App Store, many people find themselves leaving the laptops at home and using the iPhone as their main computer when they are out and about.
Nintendo DS or PSP - There are thousands of games available at the App Store and if the folks in my office and on the NYC subway are any indication, people are using their iPhones as serious on-the-go gaming machines.
GPS - With geolocation by GPS, wifi, or cell tower, the Google Maps app, and the built-in compass, the iPhone is a powerful wayfinding device. Apps can provide turn by turn directions, current traffic conditions, satellite and photographic street views, transit information, and you can search for addresses and businesses.
Flip video camera - The iPhone 3GS doesn't shoot in HD (yet), but the video capabilities on the phone are quite good, especially the on-phone editing and easy sharing.
Compass - Serious hikers and campers wouldn't want to rely on a battery-powered device as their only compass, but the built-in compass on the iPhone 3GS is perfect for casual wayfinding.
Watch - I use the clock on my iPhone more often than any other function. By far.
Portable DVD player - Widescreen video looks great on the iPhone, you can d/l videos and TV shows from the iTunes Store, and with apps like Handbrake, it's easy to rip DVDs for viewing on the iPhone.
Kindle - Amazon's Kindle app for the iPhone is surprisingly usable. And unlike Amazon's hardware, the iPhone can run many ebook readers that handle several different formats.
With all the apps available at the App Store, the list goes on: pedometer, tape recorder, heart monitor, calculator, remote control, USB key, and on and on. Electronic devices aren't even the whole story. I used to carry a folding map of Manhattan (and the subway) with me wherever I went but not anymore. With Safari, Instapaper, and Amazon's Kindle app, books and magazines aren't necessary to provide on-the-go reading material.
Once someone has an iPhone, it is going to be tough to persuade them that they also need to spend money on and carry around a dedicated GPS device, point-and-shoot camera, or tape recorder unless they have an unusual need. But the real problem for other device manufacturers is that all of these iPhone features -- particularly the always-on internet connectivity; the email, HTTP, and SMS capabilities; and the GPS/location features -- can work in concert with each other to actually make better versions of the devices listed above. Like a GPS that automatically takes photos of where you are and posts them to a Flickr gallery or a video camera that'll email videos to your mom or a portable gaming machine with access to thousands of free games over your mobile's phone network. We tend to forget that the iPhone is still from the future in a way that most of the other devices on the list above aren't. It will take time for device makers to make up that difference.
If these manufacturers don't know they are in competition with the iPhone, Apple sure does. At their Rock & Roll event last week, MacWorld quotes Phil Schiller as saying:
iPod touch is also a great game machine. No multi-touch interface on other devices, games are expensive, there's no app store, and there's no iPod built in. Plus it's easier to buy stuff because of the App Store on the device. Chart of game and entertainment titles available on PSP, Nintendo DS, and iPhone OS. PSP: 607. Nintendo DS: 3680. iPhone: 21,178.
The same applies to the iPhone. At the same event, Steve Jobs commented that with the new iPod nano, you essentially get a $149 Flip video camera thrown in for free:
We're going to start off with an 8GB unit, and we're going to lower the price from $149 to free. This is the new Apple, isn't it? (laughter) How are we going to do that. We're going to build a video camera into the new iPod nano. On the back of each unit is a video camera and a microphone, and there's a speaker inside as well. Built into every iPod nano is now an awesome video camera. And yet we've still retained its incredibly small size.
"I'm sure there will always be dedicated devices, and they may have a few advantages in doing just one thing," he said. "But I think the general-purpose devices will win the day. Because I think people just probably aren't willing to pay for a dedicated device."
In terms of this competition, the iPhone at this point in its lifetime2 is analogous to the internet in the late 1990s. The internet was pretty obviously in competition with a few obvious industries at that point -- like meatspace book stores -- but caught (and is still catching) others off guard: cable TV, movie companies, music companies, FedEx/USPS/UPS, movie theaters, desktop software makers, book publishers, magazine publishers, shoe/apparel stores, newspaper publishers, video game console makers, libraries, grocery stores, real estate agents, etc. etc....basically any organization offering entertainment or information. The internet is still the ultimate "there's an app for that" engine; it duplicated some of the capabilities of and drew attention away from so many products and services that these businesses offered. Some of these companies are dying -- slowly or otherwise -- while others were able to adapt and adopt quickly enough to survive and even thrive. It'll be interesting to see which of the iPhone's competitors will be able to do the same.
[1] In this essay, I'm using "the iPhone" as a convenient shorthand for "any of a number of devices and smartphones that offer similar functionality to the iPhone, including but not limited to the Palm Pre, Android phones, Blackberry Storm, and iPod Touch". Similar arguments apply, to varying degrees, to these devices and their manufacturers but are especially relevant to the iPhone and Apple; hence, the shorthand. If you don't read this footnote, adequately absorb its message, and send me email to the effect of "the iPhone sux because Apple and AT&T are monopolistic robber barons", I reserve the right to punch you in the face while yelling I WASN'T JUST TALKING ABOUT THE IPHONE YOU JACKASS. ↩
[2] You've got to wonder when Apple is going to change the name of the iPhone. The phone part of the device increasingly seems like an afterthought, not the main attraction. The main benefit of the device is that it does everything. How do you choose a name for the device that has everything? Hell if I know. But as far as the timing goes, I'd guess that the name change will happen with next year's introduction of the new model. The current progression of names -- iPhone, iPhone 3G, iPhone 3GS -- has nowhere else to go (iPhone 3GS Plus isn't Apple's style). ↩
Among the questions voiced by video game executives: How can Nintendo, Sony and Microsoft keep consumers hooked on game-only consoles, like the Wii or even the PlayStation Portable, when Apple offers games on popular, everyday devices that double as cellphones and music players?
And how can game developers and the makers of big consoles persuade consumers to buy the latest shoot'em-ups for $30 or more, when Apple's App store is full of games, created by developers around the world and approved by Apple, that cost as little as 99 cents -- or even are free?
Sometimes I'm looking for a word to describe a certain kind of company. One that's small and cares about quality and is trying to do something great for a few customers instead of trying to mass produce crap in order to maximize profit. A company like Coudal Partners or Zingerman's.
Boutique was deemed too pretentious...small, indie, and QOQ didn't cut it either. Readers offered up craftsman, artisan, bespoke, cloudless, studio, atelier, long tail, agile, bonsai company, mom and pop, small scale, specialty, anatomic, big heart, GTD business, dojo, haus, temple, coterie, and disco business, but none of those seems quite right.
I've had this question rolling around in the back of my mind since Matt posted it and this morning, a potential answer came to me: small batch. As in: "37signals is a small batch business." The term is most commonly applied to bourbon whiskey:
A small batch bourbon is made for the true connoisseur, every sip a testament to the work and love that has gone into each handcrafted bottle.
but can also be used to describe small quantities of high quality products such as other spirits, baked goods, coffee, beer, and wine. When starting a small company that makes high quality web sites (Wikirank) and apps (Typekit), some friends of mine in San Francisco even picked the phrase for their company's name: Small Batch, Inc.
Bottled water is bad but Fiji bottled water is particularly odious. For starters, the country's military regime monitors internet usage at internet cafes in real-time for information about the popular bottled water brand:
I sat down and sent out a few emails -- filling friends in on my visit to the Fiji Water bottling plant, forwarding a story about foreign journalists being kicked off the island. Then my connection died. "It will just be a few minutes," one of the clerks said. Moments later, a pair of police officers walked in. They headed for a woman at another terminal; I turned to my screen to compose a note about how cops were even showing up in the Internet cafes. Then I saw them coming toward me. "We're going to take you in for questioning about the emails you've been writing," they said.
Then the cops threatened the reporter with prison rape. The rest of the story isn't much better.
This slide deck is our current best thinking about maximizing our likelihood of continuous success.
There are literally dozens of great ideas on these 128 slides...a must-read for anyone who wants their business to grow and last for more than a few years.
From John Gruber, an Apple booster, an essay on Microsoft's Long, Slow Decline. And, is if in reply, an essay called Apple: Secrecy Does Not Scale from Anil Dash, Microsoft enthusiast. A perhaps unsubtle reply to both essays might be "I can't hear you over the continual sounds of the cash register"...MS and Apple continue to be enormously profitable doing business the way they do.
For 14 months, we at Azure Capital tried to invest in companies but could not reach an agreement with entrepreneurs and existing investors on valuation and terms -- the gap was too great. Despite meeting with hundreds of companies and reaching the point of discussing terms with a few, we did not make a single new investment.
That gap no longer exists. We recently invested in a company called BlogHer in May. It is an exciting company, whose team and investors were wise enough to realize that taking money now would give them a competitive advantage. And last week we invested in SlideRocket, our second new investment in less than two months.
It is as if the venture-funding environment has finally hit the reset button.
Translation: Now that money is tight, venture capital firms are able to fully dictate the terms of their investments. Entrepreneurs, prepare to part with more of your companies than you wanted to and receive less for the pleasure. Lester goes on to hand-wavingly assert that this is a good thing for entrepreneurs.
Mistakes, bugs, incompatibilities, and related issues that used to affect a handful now affect hundreds. 1% is real number now. This requires some organizational change. More caution, more testing, more contingency planning, more disaster planning.
After one year of work, each employee receives an ownership stake in the company and a free custom bicycle. After five years every employee enjoys an all-expenses-paid trip to Belgium -- the country whose centuries-old beer tradition serves as a model for the Fort Collins, Colo., brewery. Oh yeah, and employees get two free six-packs of beer a week.
Safeway's plan capitalizes on two key insights gained in 2005. The first is that 70% of all health-care costs are the direct result of behavior. The second insight, which is well understood by the providers of health care, is that 74% of all costs are confined to four chronic conditions (cardiovascular disease, cancer, diabetes and obesity). Furthermore, 80% of cardiovascular disease and diabetes is preventable, 60% of cancers are preventable, and more than 90% of obesity is preventable.
The result is that Safeway's healthcare costs have held steady over the past four years while the costs at other American companies have increased almost 40%.
So $83,000,000,000 is what New GM would have to be worth in order for us to break even on our investment. But $56,000,000,000 is what GM was worth at its all time peak in 2000.
Bud Caddell summarizes how to be happy with your work in the form of a Venn diagram consisting of three main overlapping areas: What We Do Well, What We Want to Do, and What We Can Be Paid to Do. (via today and tomorrow)
GM declared bankruptcy yesterday and the rush is on to explain what went wrong. Here are a few explanations I found, along with some possible solutions.
4. Failure to innovate. Since GM was focused on profiting from finance, it did not really care that much about building better vehicles. GM's management failed to adapt GM to changes in customer needs, upstart competitors, and new technologies.
When GM realized how fast 1990s buyers were switching to trucks as personal transportation, it overreacted, pouring time and money into SUVs and pickups at the expense of car development. The result: As long ago as 2000, Wall Street was warning that GM could be overcommitted to trucks and wind up out of phase if the pendulum of buyer preference swung back to cars. Once consumer tastes began changing, the market was awash in new truck models, and profits were sapped by discounts needed to keep sales boiling.
The products built in the factories of GM, Ford and Chrysler are some of the greatest weapons of mass destruction responsible for global warming and the melting of our polar icecaps. The things we call "cars" may have been fun to drive, but they are like a million daggers into the heart of Mother Nature. To continue to build them would only lead to the ruin of our species and much of the planet.
The company reached a deal with Saab to expand its European presence. Having an extensive brand lineup had been a primary strategy at G.M. since its creation in 1908. But this tactic eventually became costly, as brands overlapped and competed for business and money.
GM Reinvention, GM. Twitter, Flickr, Facebook, it's all there. Oy.
The Pontiac Aztec was one of the first major crossover vehicles brought to market in the U.S. [It was] combination of car-like handling and fuel economy with SUV-like space and aggressive appearance. The concept was a hit and now most automakers are shifting towards crossover. The Aztec was a massive failure. It was an attractive idea in an amazingly unattractive shell. It failed almost entirely based upon its appearance.
GM simply was not ready to respond to Toyota Motor and other Japanese manufacturers when they began to gain serious ground in the early 1980s. Toyota, in particular, had developed a lean manufacturing system that was completely different from the mass-assembly-line techniques GM was still using, many decades after Henry Ford perfected them. GM's fractured structure meant that each division had its own manufacturing processes, its own parts, its own engineering, and its own stamping plants.
The picture of a heedless union and a feckless management says a lot about what went wrong at GM. There were many more mistakes, of course -- look-alike cars, lapses in quality, misguided acquisitions, and betting on big SUVs just before gas prices soared. They were all born of a uniquely insular corporate culture.
Over the last five decades, this company has progressively lost touch with car buyers, especially the educated car buyers who flock to European and Japanese brands. Over five decades, this company has tolerated labor practices that seem insane to outsiders. Over these decades, it has tolerated bureaucratic structures that repel top talent. It has evaded the relentless quality focus that has helped companies like Toyota prosper.
We became sick and tired of our cars and even angry at them. Pointy-headed busybodies of the environmentalist, new urbanist, utopian communitarian ilk blamed the victim. They claimed the car had forced us to live in widely scattered settlements in the great wasteland of big-box stores and the Olive Garden. If we would all just get on our Schwinns or hop a trolley, they said, America could become an archipelago of cozy gulags on the Portland, Ore., model with everyone nestled together in the most sustainably carbon-neutral, diverse and ecologically unimpactful way.
Why GM failed, Jack Lessenberry, Detroit Metro Times:
What's wrong, in a nutshell, is that it is a narrow, insular culture. Those who make it to the top of the heap, like Rick Wagoner, tend to be white Anglo-Saxon Protestant males who have worked at the same company their entire career, and have come up with the same set of buddies. Sort of like the Delta Tau Delta fraternity Wagoner joined when he was in business school.
"I thought I was doing the right thing. I wasn't investing in stocks. GM was a solid company. ... The bonds were my entire nest egg. I'm not a whiner and I don't want special treatment. What really ticks me off is that it seems like we are getting less than everyone else and we deserve to be treated equally. I'm just trying to figure out a way to make it to 65 so I can start drawing my social security."
The company did have vast numbers of loyal buyers, but G.M. lost them through a series of strategic and cultural missteps starting in the 1960s. It bungled efforts in the 1980s to cut costs by sharing the underpinnings of its cars across different brands, blurring their distinctiveness. G.M. gave in to union demands in 1990 and created a program that paid workers even when plants were not running, forcing it to build cars and trucks it could not sell without big incentives.
The factors that had once been the company's strengths were now weaknesses. Mass production and piece-rate incentives created a workforce with little pride in the quality of the product. The cadre of professional managers became a complacent, inward-looking bureaucracy. The diversified corporation became a collection of competing baronies.
From a couple of years ago, The Risk Pool, Malcolm Gladwell, The New Yorker:
Surely, if you are losing money on every car you sell, as G.M. is, cutting car prices still further in order to boost sales doesn't make any sense. It's like the old Borsht-belt joke about the haberdasher who lost money on every hat he made but figured he'd make up the difference on volume. The economically rational thing for G.M. to do would be to restructure, and sell fewer cars at a higher profit margin -- and that's what G.M. tried to do this summer, announcing plans to shutter plants and buy out the contracts of thirty-five thousand workers. But buyouts, which turn active workers into pensioners, only worsen the company's dependency ratio. Last year, G.M. covered the costs of its four hundred and fifty-three thousand retirees and their dependents with the revenue from 4.5 million cars and trucks. How is G.M. better off covering the costs of four hundred and eighty-eighty thousand dependents with the revenue from, say, 4.2 million cars and trucks?
How ironic, given NASCAR's role in helping the auto industry race down its path of self-destruction. Major auto companies used NASCAR for years to push cars and trucks with poor fuel economy numbers. The sport, in some ways, came to symbolize America's embrace of consumption. Consider that NASCAR didn't even switch to unleaded gasoline until 2007. And even today, the racecars and trucks that auto companies are marketing through NASCAR are among the least fuel efficient, from the Dodge Charger to the Chevrolet Silverado.
According to Doble, you can haggle pretty much anywhere -- from Macy's to Kmart to your local supermarket -- but, he suggests, your best bets are hotel rooms, bulk purchases, big-ticket items, anything marked down or damaged, floor models, used items or open packages. In those situations, says Doble, "It's almost crazy not to bargain." After all, merely asking for a better price -- on, say, an appliance -- can save you hundreds of dollars.
No, wait: The most amazing thing is that I have often gone into B&H to purchase a specific product, only to be talked into something cheaper. For example, once I went in to buy a field video monitor to use for some interviews I was conducting. I expected to pay $600 until the salesperson said, "Why don't you just get one of these cheap consumer portable DVD players? They have video inputs, they work just as well, and they're under $100." This was no accident. "The entire premise of our store is based upon your ability to come in, touch, feel, experiment, ask, and discuss your needs without sales pressure," B&H's website says.
Re: Circuit City, I'd wager that many of the businesses that have gone under so far have not done so because of the poor economy but because they were poor or unsustainable businesses. (via @anildash)
Just as General Motors has in effect subsidized Big Oil by continuing to build gas-guzzlers in recent years, so has the USPS continued to subsidize Big Mail by shaping its operations to encourage what it now calls, revealingly, "standard mail" -- that is, advertising junk mail. Most American citizens are blissfully unaware of the degree to which USPS subsidizes U.S. businesses by means of the fees it collects from ordinary postal customers. For example, if you wish to mail someone a large envelope weighing three ounces, you'll pay $1.17 in postage. A business can bulk-mail a three-ounce catalog of the same size for as little as $0.14.
Sometimes I link to stuff only because it justifies my organizational laziness. See: Ready, aim...fail.
A few management scholars are now looking deeper into the effects of goals, and finding that goals have a dangerous side. Individuals, governments, and companies like GM show ample ability to hurt themselves by setting and blindly following goals, even those that seem to make sense at the time.
I'll continue stumbling towards the light at the end of the tunnel, thank you very much.
The Economist is leading the charge on expensive subscriptions, and its success is one reason publishers are rethinking their approaches. It is a news magazine with an extraordinarily high cover price -- raised to $6.99 late last year -- and subscription price, about $100 a year on average.
Even though The Economist is relatively expensive, its circulation has increased sharply in the last four years. Subscriptions are up 60 percent since 2004, and newsstand sales have risen 50 percent, according to the audit bureau.
I'm always amazed that something as great as The New Yorker can be had for a buck an issue when people routinely pay $4 for burnt coffee, $10 for crappy movies, and $12 for -tini drinks.
In America today, there are almost as many people making their living as bloggers as there are lawyers.
Understandably, Penn's catching a bit of flack for that and statements and the numbers he uses to back them up. From Waldo Jaquith at VQR:
Penn's thesis is that average American citizens are becoming professional bloggers, offsetting the loss in journalists, with millions enjoying a revenue stream from blogging and nearly half a million making a living at it. That's wrong on its face. There's simply no way there there's more than, say, 10,000 Americans are paying for their basic life expenses purely through blogging.
Scott Rosenberg, who has done all sorts of research about blogging for his forthcoming book, reacted similarly:
Technorati's are the longest-running and most valuable, and consistent, series of blogging studies over time, but like any study's numbers, they can be easily misrepresented: here, Penn relies on them for the datum that bloggers who reach 100,000 uniques a month can earn $75K a year. But if you read the source, you find this:
"The average income was $75,000 for those who had 100,000 or more unique visitors per month (some of whom had more than one million visitors each month). The median annual income for this group is significantly lower - $22,000."
In other words, the $75K average is skewed by a handful of outlier successes, but the great majority of bloggers who get 100,000 uniques/month earn more like $22,000. Here, the median is far more relevant than the average. Penn, of all people, knows this.
From my perspective as someone who does make a living blogging, Penn's numbers, especially this 100,000 uniques --> $75K business, are misleading at best and a complete fucking lie at worst.
The Norwegian study looked at almost 2,000 online music users, all over the age of 15. Researchers found that those who downloaded "free" music -- whether from lawful or seedy sources -- were also 10 times more likely to pay for music. This would make music pirates the industry's largest audience for digital sales.
Not surprising that some people are so crazy for music that they'll *pay* for it. Crazy!
This may be the big blockbuster film of 2009, and one we really need right now. It's miles easier to understand than "The Dark Knight," and tremendously more emotional. Hood simply did an outstanding job bringing Wolverine's early life to the screen.
Fox News is owned by News Corp. 20th Century Fox, the company putting out Wolverine, is also owned by News Corp. You can see where this is heading. Friedman is now out of a job and a large media company has once again made its priorities clear:
We've just been made aware that Roger Friedman, a freelance columnist who writes Fox 411 on Foxnews.com -- an entirely separate company from 20th Century Fox -- watched on the Internet and reviewed a stolen and unfinished version of 'X-Men Origins: Wolverine.' This behavior is reprehensible and we condemn this act categorically -- whether the review is good or bad.
Translation: we're more concerned with piracy than with the quality of the film as perceived by the audience. I bet the filmmakers are happy that someone really liked the film.
Disney investors are getting a little antsy with Pixar and their irritating need to make movies that are good without worrying about their commercial success or how many action figures of the main characters can be sold. Says Disney's CEO:
We seek to make great films first. If a great film gives birth to a franchise, we are the first company to leverage such success. A check-the-boxes approach to creativity is more likely to result in blandness and failure.
Invest in Dreamworks for that check-the-boxes creativity, why don't you. (thx, kabir)
We're placed in hierarchical org charts, remnant of railroad and factory operations of the 19th century, and find ourselves in silos that prevent us from collaborating with our colleagues.
We're given job titles with an explicit set of responsibilities, and discouraged to perform outside that boundary.
Some think it's unfair that the former president of Countrywide Financial, a mortgage company that played a big (and negative) role in the subprime mortgage debacle, is now the head of a company making big money buying troubled mortgages from the US government for cheap and then refinancing with the owner, making big money in the process.
McNulty: Let me understand. Every Friday night, you and your boys are shootin' craps, right? And every Friday night, your pal Snot Boogie... he'd wait til there's cash on the ground and he'd grab it and run away? You let him do that? Suspect: We'd catch him and beat his ass but ain't nobody ever go past that. McNulty: I've gotta ask you: if every time Snot Boogie would grab the money and run away... why'd you even let him in the game?
Drummer Josh Freese is releasing his second solo album in eleven different limited-edition packages. The $75,000 option includes:
-T-shirt -Go on tour with Josh for a few days. -Have Josh write, record and release a 5 song EP about you and your life story. -Take home any of his drumsets (only one but you can choose which one.) -Take shrooms and cruise Hollywood in Danny from TOOL's Lamborgini OR play quarters and then hop on the Ouija board for a while. -Josh will join your band for a month...play shows, record, party with groupies, etc.... -If you don't have a band he'll be your personal assistant for a month (4 day work weeks, 10 am to 4 pm) -Take a limo down to Tijuana and he'll show you how it's done (what that means exactly we can't legally get into here) -If you don't live in Southern California (but are a US resident) he'll come to you and be your personal assistant/cabana boy for 2 weeks.
Oh yeah, and the music on CD or via download. (thx, ainsley)
This is a term I learned from a banker I worked for 20 years ago, people who shine brightly in one direction, but don't let off too much light otherwise. Flashlights are kind of useless as board members, despite big reputations and good resumes -- they're just not lateral thinkers and don't really want to dig in. Every company is allowed one flashlight, but it better be the CEO. It's hard to know where to go when the light is shining in two (or more) different directions.
Blogs can do many wonderful things [but] generating huge amounts of money isn't one of them.
As businesses go, blogging is a lot like shining shoes. There are going to be very few folks who own chains of shoe shining places which make a lot of money and a bunch of other people who can (maybe) make a living at it if they bust their ass 24/7/365. But for many, shining shoes is something that will be done at home for themselves because it feels good to walk around with a shiny pair of shoes. Everyone else will switch to sandals (i.e. Twitter) or sneakers (i.e. Facebook) and not worry about shining at all. (via fimoculous)
In a notice pasted on a wall inside the front door [of his video store], he wrote, "We hope to find a sponsor who can make this collection available to those who have loved Kim's over the past two decades." He promised to donate all the films without charge to anyone who would meet three conditions: Keep the collection intact, continue to update it and make it accessible to Kim's members and others.
This is Canada, right? So there's plenty of nights when it's snowing so hard that you can barely see, nights that you might want to stay home instead of going out to work," he says. "But those are exactly the kind of nights where someone might just set something out beside the loading dock, instead of putting it into the compactor. Those are the nights where you make the big score. I've tried to apprentice people, but they never want to do it like I do, methodically, avoiding left turns and red lights, logging what you found in each dumpster and not wasting time on the ones that are never any good, going out when the weather stinks.
Sometimes all you need is a little text change to save your business a lot of money. Jared Spool once helped a major ecommerce site with their checkout process. The company ended up changing the text of a submit button and making the company an additional $300 million in one year.
The form, intended to make shopping easier, turned out to only help a small percentage of the customers who encountered it. (Even many of those customers weren't helped, since it took just as much effort to update any incorrect information, such as changed addresses or new credit cards.) Instead, the form just prevented sales -- a lot of sales.
37signals recently changed how they labelled charges on credit card statements and reduced chargebacks by 30%.
The most successful companies treat success as a byproduct of achieving their real goal, which is always something bigger and more important than they are.
The best part about Tim's advice is that it works in boom times *and* in a recession. I have some notes jotted down for this whole post that I'm probably not going to write about how to take advantage of the recession -- yes, advantage...the gist: buy low! -- and one of the main points is: recessions are temporary so take the long view and keep trying to do what is most important to you, i.e. stuff that matters.
He said that, in a recession, people wanted hugs. This struck me as a pretty feeble explanation. Surely there are easier ways of getting hugs than putting one's marriage on the line? Hugging one's children or -- if one is desperate -- even one's spouse might seem easier and safer.
He said that this was just the point: that the risk was the lure. That bankers are suffering from a risk deficit: their working lives have been derisked compulsorily and this could be a way of compensating by adding risk to their private lives.
Who's gonna make the "Bankers Want Risky Hugs" tshirts? (via mr)
Oddly, this most suburban American invention was supposed to evoke a European city centre. Hence Southdale's density and its atrium, where shoppers were expected to sit and debate over cups of coffee, just as they do in the Piazza San Marco or the Place Dauphine. Gruen exiled cars, which he thought noisy and anti-social, to the outside of his mall. Most contemporary critics thought Gruen had succeeded in bringing urbanity to the suburbs. Southdale was "more like downtown than downtown itself", claimed the Architectural Record. Another asserted, in a rare example of journalistic hyperbole that turned out to be absolutely right, that the indoor shopping mall was henceforth "part of the American way".
He revisited one of his old shopping centers, and saw all the sprawling development around it, and pronounced himself in "severe emotional shock." Malls, he said, had been disfigured by "the ugliness and discomfort of the land-wasting seas of parking" around them. Developers were interested only in profit. "I refuse to pay alimony for those bastard developments," he said in a speech in London, in 1978. He turned away from his adopted country. He had fixed up a country house outside of Vienna, and soon he moved back home for good. But what did he find when he got there? Just south of old Vienna, a mall had been built -- in his anguished words, a "gigantic shopping machine." It was putting the beloved independent shopkeepers of Vienna out of business. It was crushing the life of his city. He was devastated. Victor Gruen invented the shopping mall in order to make America more like Vienna. He ended up making Vienna more like America.
Update: Whoa, lots of email about this one, especially from Seattlites. There's a bit of controversy that I was unaware of concerning the first mall...here's a list of contenders. (thx, todd)
Lemonade Stand, a remake of the popular Apple II game of the same title, is now available on the iPhone (@ iTunes Store). Everything I know about business I learned from playing Lemonade Stand.
Mary-Kate's contribution to the enterprise is a collector's knowledge. She has been buying vintage Lanvin and Givenchy, among other classic labels of the mid-20th century, for a number of years. (Unlike Ashley, Mary-Kate continues to act, having played, with a perfect semblance of haze and obfuscation, a born-again Christian drug dealer on the third season of "Weeds." This year she appeared opposite Ben Kingsley in the film "The Wackness.") Ashley is the more entrepreneurial, the one who will tell you how much she admires Steve Jobs and Bill Gates.
This radio program made the rounds last week, but I finally got caught up this weekend so I'll add my voice to the chorus urging you to listen to This American Life's episode on the financial crisis, Another Frightening Show About the Economy. Paired with The Giant Pool of Money from back in May, this is an excellent overview of what's going on in the financial markets right now. The hosts of the two shows are also doing a daily blog/podcast thing at Planet Money In addition, the last half of this week's TAL concerns the political angle of the financial mess. I haven't had a chance to listen yet, but check it out if you're into that sort of thing.
Conventional wisdom and prevailing opinion among hardcore Boston Red Sox fans is that LA Dodgers left fielder Manny Ramirez finally sulked his way out of a Boston Red Sox uniform by basically phoning it in and causing trouble for his team for a couple of months earlier in the season, which phoning and trouble resulted in a trade of Ramirez to LA for very little in return. Two rebuttals have surfaced recently that seem more plausible to me. The first is Facts About Manny Ramirez by Joe Sheehan. Sheehan uses some of those pesky facts to illustrate that on the field, Manny played as well or better during the supposed phoning-it-in period than he has in the past.
When he played, Ramirez killed the league. He hit .347/.473/.587 in July. His OBP led the team, and his SLG led all Red Sox with at least 25 AB. The Sox, somewhat famously, went 11-13 in July. Lots of people want you to believe that was because Manny Ramirez is a bad guy. I'll throw out the wildly implausible idea that the Sox went 11-13 because Ortiz played in six games and because veterans Mike Lowell and Jason Varitek has sub-600 OPSs for the month.
Four days before he was traded, Manny Ramirez just about single-handedly saved the Red Sox from getting swept by the Yankees, with doubles in the first and third innings that helped the Sox get out to a 5-0 lead in a game they had to win to stay ahead of the Yankees in the wild-card race.
In Manny Being Manipulated, Bill Simmons attempts to answer the question, Ok, so why did Manny suddenly want to be traded and, more importantly, why did the Red Sox actually oblige? Simmons' answer: Scott Boras, Ramirez's agent and "one of the worst human beings in America who hasn't actually committed a crime". According to Simmons, it all boiled down to mismatched incentives and following the money.
Manny's contract was set to expire after the 2008 season, with Boston holding $20 million options for 2009 and 2010. Boras couldn't earn a commission on the option years because those fees belonged to Manny's previous agents. He could only get paid when he negotiated Manny's next contract. And Scott Boras always gets paid.
Boras could only get paid for representing Ramirez if Manny signed a new contract. Which he will next year because as part of the trade, the Dodgers agreed to waive his 2009 option and allow him to become a free agent. And the Red Sox went along because they decided they'd rather have a good relationship with Scott Boras going forward instead of a weird relationship with Ramirez. As for Manny, he gets paid either way, rarely appreciated the weird pressure/adulation put on him and every other Red Sox player by Boston fans, and, I get the feeling, likes swinging a bat, no matter what team he plays for.
As anticipated, Muxtape was unable to maintain its original form under assault from the RIAA and slow moving legal negotiations with the labels.
The first red flag came in August. Up until then all the discussion had been about numbers, but as we closed in on an agreement the talk shifted to things like guaranteed placement and "marketing opportunities." I was denied the possibility of releasing a mobile version of Muxtape. My flexibility was being constricted. I had been worried about Muxtape getting a fair deal, but my biggest concern all along was maintaing the integrity and experience of the site (one of the reasons I wanted to license in the first place). Now it wasn't so simple; I had agreed to a variety of encroachments into Muxtape's financials because I wanted to play ball, but giving up any kind of editorial or creative control was something I had a much harder time swallowing.
Instead, the site will become more of a stripped-down MySpace for bands wanting to put their music online. Disappointing because Muxtape, as originally conceived, was obviously what everyone but the "music industry" wanted. Some of that simplistic magic will likely transfer over to the new incarnation but it won't be as cool as mix tapes for your pals. (thx, mark)
Update: For posterity, I'm pasting Justin's whole note in here.
I love music. I believe that for people who love music, the desire to share it is innate and crucial for music itself. When we find a song we love, we beckon our friends over to the turntable, we loan them the CD, we turn up the car stereo, we put it on a mixtape. We do this because music makes us feel and we want someone else to feel it, too.
The story of Muxtape began when I had a weekly show at my university's radio station in Oregon. In addition to keeping the station's regular log I compiled my playlists into a web page, with each show represented by a simple block that corresponded to a cassette recording for that week. At the time, mixtapes were already well into their twilight, but long after my show ended I couldn't stop thinking about how the playlist page served a similar purpose, and in many ways served it better. Like a mixtape, each playlist was a curated group that was greater than the sum of its parts. Unlike a mixtape, it wasn't constrained by any physical boundaries of dissemination, but... it also didn't contain any actual music. Someone might come across the page and smile knowingly at the songs they knew, but shifting the burden of actually compiling the mix to its intended listener defeated the purpose entirely.
Five years later, internet technology had advanced significantly. I was working on experimental user interfaces for web sites when I started thinking about that playlist page again, and ultimately set out to bring it to life. My desire to share music (in the mixtape sense) hadn't gone anywhere, but the channels to do so were becoming extinct. Popular blogging services allow you to post audio files in an ephemeral sort of way, but it wasn't the context I was looking for. A physical cassette tape in your hands has such an insistent aesthetic; just holding one makes you want to find a tape player to fulfill its destiny. My goal with Muxtape's design was to translate some of that tactility into the digital world, to build a context around the music that gave it a little extra spark of life and made the holder anxious to listen.
The first version was a one-page supplement to my tumblr, and was more or less identical to what it would become later. The feedback was great, and the number one question rapidly became "can you make one for me, too?" At first I started thinking about ways I could package the source code, but the more I thought about it the more it seemed like massively wasted potential. Distributing the source would mean limiting access to the small niche of people who operate their own web server, whereas I wanted to make something that was accessible to anyone who loves music. The natural conclusion was a centralized service, which suddenly unfolded whole other dimensions of possibility for serendipitous music discovery. What seemed before like the hollow shell of a mixtape now seemed like its evolution. I knew I had to try building it. Three weeks of long nights later, I launched Muxtape.
It was successful very quickly. 8,685 users registered in the first 24 hours, 97,748 in the first month with 1.2 million unique visitors and a healthy growth rate. Lots of press. Rampant speculation. Tech rags either lauded it or declared it an instant failure. Everyone was excited. I was thrilled.
There was a popular misconception that Muxtape only survived because it was "flying under the radar," and the moment the major labels found out about it it'd be shut down. In actuality, the labels and the RIAA read web sites like everyone else, and I heard from them both within a week or so. An RIAA notice arrived in triplicate, via email, registered mail, and FedEx overnight (with print and CD versions). They demanded that I take down six specific muxtapes they felt were infringing, so I did.
Around the same time I got a call from the VP of anti-piracy at one of the majors. After I picked up the phone his first words were, "Justin, I just have one question for you: where do I send the summons and complaint?" The conversation picked up from there. There was no summons, it was an intimidation tactic setting the tone for the business development meeting he was proposing, the true reason for the call. Around the same time another one of the big four's business developers reached out to me, too.
I spent the next month listening. I talked to a lot of very smart lawyers and other people whose opinions on the matter I respected, trying to gain a consensus for Muxtape's legality. The only consensus seemed to be that there was no consensus. I had two dozen slightly different opinions that ran the gamut from "Muxtape is 100% legal and you're on solid ground," to "Muxtape is a cesspool of piracy and I hope you're ready for a hundred million dollar lawsuit and a stint at Riker's."
In the end, Muxtape's legality was moot. I didn't have any money to defend against a lawsuit, just or not, so the major labels had an ax over my head either way. I always told myself I'd remove any artist or label that contacted me and objected, no questions asked. Not a single one ever did. On the contrary, every artist I heard from was a fan of the site and excited about its possibilities. I got calls from the marketing departments of big labels whose corporate parents were supposed to be outraged, wanting to know how they get could their latest acts on the home page. Smaller labels wanted to feature their content in other creative ways. It seemed obvious Muxtape had value for listeners and artists alike.
In May I had my first meeting with a major label, Universal Music Group. I went alone and prepared myself for the worst, having spent the last decade toeing the indie party line that the big labels were hopelessly obstinate luddites with no idea what was good for them. I'm here to tell you now that the labels understand their business a lot better than most people suspect, although they each have their own surprisingly distinct personality when it comes to how they approach the future. The gentlemen I met at Universal were incredibly receptive and tactful; I didn't have to sell them on why Muxtape was good for them, they knew it was cool and just wanted to get paid. I sympathized with that. I told them I needed some time to get a proposal together and we left things in limbo.
A few weeks later I had a meeting with EMI, the character of which was much different. I walked into a conference room and shook eight or nine hands, sitting down at a conference table with a phonebook-thick file labeled "Muxtape" laying on it. The people I met formed a semi-circle around me like a split brain, legal on one side and business development on the other. The meeting alternated between an intense grilling from the legal side ("you are a willful infringer and we are mere hours from shutting you down") and an awkward discussion with the business side ("assuming we don't shut you down, how do you see us working together?"). I asked for two weeks to make a proposal, they gave me two days.
I had to make a decision. As I saw it I had three options. The first was to just shut everything down, which I never really considered. The second was to ban major label content entirely, which might have solved the immediate crisis, but had two strong points against it. The first, most visibly, was that it would prevent people from using the majority of available music in their mixes. The second was that it did nothing to address the deeper questions surrounding ownership and usage for everyone else who wasn't a major label: mid-size labels and independent artists who have just as fundamental a right to address how their content is used as a large corporation, even if they don't carry quite as big a stick.
The third option was to approach a fully licensed model, which I had been edging toward since I met with Universal. I knew other licensed services so far had met with mixed success, but I also knew Muxtape was different and that it was at least worth exploring. The question about whether or not the labels saw value in it had been answered, the new question was how much it was going to cost.
It was June. I approached a Fifth Ave law firm about representing me in licensing negotiations with the major labels, and they took me on. Two weeks later I met with all four, flanked by lawyers this time, and started the slow process of working out a deal. The first round of terms were stiff and complex, but not nearly as bad as I'd imagined, and I managed to convince them that allowing Muxtape to continue to operate was in everyone's best interest. Things were going well. I spent the next two months talking with investors, designing the next phases of the site itself, and supervising the negotiations. A big concern was getting a deal that took into consideration the fact that Muxtape wasn't a straightforward on-demand service, and should pay accordingly less than a service that was. Another reason I liked the licensing option from the outset was that it seemed like an uncommon win-win; I didn't want the ability to search and stream any song at any given notice, and they were reluctant to offer it (for the price, anyway). Muxtape's unusual limitations were its strength in more ways than one.
The first red flag came in August. Up until then all the discussion had been about numbers, but as we closed in on an agreement the talk shifted to things like guaranteed placement and "marketing opportunities." I was denied the possibility of releasing a mobile version of Muxtape. My flexibility was being constricted. I had been worried about Muxtape getting a fair deal, but my biggest concern all along was maintaing the integrity and experience of the site (one of the reasons I wanted to license in the first place). Now it wasn't so simple; I had agreed to a variety of encroachments into Muxtape's financials because I wanted to play ball, but giving up any kind of editorial or creative control was something I had a much harder time swallowing.
I was wrestling with this when, on August 15th, I received notice from Amazon Web Services (the platform that hosts Muxtape's servers and files) that they had received a complaint from the RIAA. Per Amazon's terms, I had one business day to remove an incredibly long list of songs or face having my servers shut down and data deleted. This came as a big surprise to me, as I'd been thinking that I hadn't heard from the RIAA in a long time because I had an understanding with the labels. I had a panicked exchange of emails with Amazon, trying to explain that I was in the middle of a licensing deal, that I suspected it was a clerical error, and that I was doing everything I could to get someone to vouch for me on a summer Friday afternoon. My one business day extended over the weekend, and on Monday when I wasn't able to produce the documentation Amazon wanted (or even get someone from the RIAA on the phone), the servers were shut down and I was locked out of the account. I moved the domain name to a new server with a short message and the very real expectation that I could get it sorted out. I still thought it was all just a big mistake. I was wrong.
Over the next week I learned a little more, mainly that the RIAA moves quite autonomously from their label parents and that the understanding I had with them didn't necessarily carry over. I also learned that none of the labels were especially interested in helping me out, and from their perspective it had no bearing on the negotiations. I disagreed. The deals were still weeks or months away (an eternity on the internet) meaning that at best, Muxtape was going to be down until the end of year. There was also still the matter of how to pay for it; getting investment is hard enough in this volatile space even with a wildly successful and growing web site, it became an entirely different proposition with no web site at all.
And so I made one of the hardest decisions I've ever faced: I walked away from the licensing deals. They had become too complex for a site founded on simplicity, too restrictive and hostile to continue to innovate the way I wanted to. They'd already taken so much attention away from development that I started to question my own motivations. I didn't get into this to build a big company as fast as I could no matter what the cost, I got into this to make something simple and beautiful for people who love music, and I plan to continue doing that. As promised, the site is coming back, but not as you've known. I'm taking a feature that was in development in the early stages and making it the new central focus.
Muxtape is relaunching as a service exclusively for bands, offering an extremely powerful platform with unheard-of simplicity for artists to thrive on the internet. Musicians in 2008 without access to a full time web developer have few options when it comes to establishing themselves online, but their needs often revolve around a common set of problems. The new Muxtape will allow bands to upload their own music and offer an embeddable player that works anywhere on the web, in addition to the original muxtape format. Bands will be able to assemble an attractive profile with simple modules that enable optional functionality such as a calendar, photos, comments, downloads and sales, or anything else they need. The system has been built from the ground up to be extended infinitely and is wrapped in a template system that will be open to CSS designers. There will be more details soon. The beta is still private at the moment, but that will change in the coming weeks.
I realize this is a somewhat radical shift in functionality, but Muxtape's core goals haven't changed. I still want to challenge the way we experience music online, and I still want to work to enable what I think is the most interesting aspect of interconnected music: discovering new stuff.
Thank to you everyone who made Muxtape the incredible place it was in its first phase, it couldn't have happened without your mixes. The industry will catch up some day, it pretty much has to.
If you've spent any time at all walking around Manhattan, you've likely run across Joe Ades, the English gent hawking vegetable peelers at the top of his lungs on a bit of sidewalk. An occasional part of his current routine is a laminated copy of a profile of him that Vanity Fair published in May 2006. No surprise: Ades is a character.
Mayhew and the patterers might have been surprised at just how far Joe has taken this gent thing. At the end of each day he returns with his gear to a commodious three-bedroom apartment on Park Avenue, the home that he shares with his present wife, Estelle. (In spite of the polished ways of the patterers, their typical abode was the "vagrant hovel.") Then it's out again for an early dinner in a style unheard of in London Labour. Six nights a week, accompanied by Estelle, he hits some of the biggest-name restaurants in town-Elio's, Jean Georges, Milos, Centolire. He never has trouble getting a table. In the soft light his hands glow pink from the half-hour hot-water-and-nailbrush treatment he performs as part of his evening toilette.
Joel Spolsky, popular tech writer and founder of Fog Creek Software, has an article in the September 2008 issue of Inc. called How Hard Could It Be: How I Learned to Love Middle Managers. In it, Spolsky details how he came to the idea of building a small company where middle management was unnecessary. He took particular inspiration from an article he read about a GE plant.
It was about a General Electric plant in Durham, North Carolina, that made jet engines, and it offered a portrait of the perfect work environment: a factory that had more than 170 employees but just one boss. All the engine technicians reported directly to the plant manager, who did not have the time or the inclination to micromanage. There was no time clock, and people set their own schedules. Pay was egalitarian (there were only three pay grades), and workers who assembled the engines could switch tasks each day so their jobs were not monotonous. The result? In terms of quality, the plant was nearly perfect. Three-quarters of the engines it produced were flawless, and the remaining 25 percent typically had only a slight cosmetic defect.
The no-management rule worked at Fog Creek for a time but as the employee count crept up, cracks appeared in the system. Employees became disgrunted, in part because of a perceived lack of availability of the only two members of management, the CEO (Spolsky) and the president. To fix the problem, Fog Creek established a small layer of middle management.
First, we eliminated the need to get both me and Michael in the room. You have a question? I'm the CEO. Talk to me. If I want to consult with Michael, that's my problem, not yours. Second, we appointed leaders for two of the programming teams -- in effect, creating that layer of hierarchy that I had tried to avoid.
And frankly, people here seem to be happier with a little bit of middle management. Not middle management that's going to overrule the decisions they make on their own. Not symbolic middle management that only makes people feel important. But middle management that creates useful channels of communication. If my job is getting obstacles out of the way so my employees can get their work done, these managers exist so that, when an employee has a local problem, there's someone there, in the office next door, whom they can talk to.
Given his inital progressive approach to building a company, I'm surprised that Spolsky didn't try something a bit different. For instance, Adaptive Path is structured using an advocate system. AP co-founder Peter Merholz explained the system to me via email.
It's a way of avoiding typical management structures, where you have people reporting up a hierarchy. Our current structure has two levels... Executive management, and everyone else. That "everyone else" doesn't report to the executive management. Instead, the report to one another through the advocate system. Each employee has an advocate. An advocate is like a manager, except they don't tell you what to do. They are there to help you achieve what you want, professionally. Employees choose their own advocates. They simply ask someone if they would be their advocate.
Merholz allows that what the advocacy system doesn't help with is communication across the organization -- the very problem that was plaguing Fog Creek -- and would likely work best alongside a light layer of middle management. But with the right guidelines and some slight changes, I believe it could work well in a company of 20-30 employees.
The Grey Dog's Coffee restaurants -- there are two locations in Manhattan -- use a slightly different system of rotating management. Co-owner David Ethan explains.
From a historic perspective, I like to think that it's one of the few truly bohemian places left in New York City, just based on the way we run it, like a commune. The management system here is that everybody manages. In order to work here you have two tries to show you can manage the place and if you can't, you're fired. Everybody manages about one shift a week and everybody's equal. People work hard for each other. I don't want to let you down because tomorrow it will be me. And I think they enjoy the responsibility of running a New York City restaurant. They get to pick the music, set the vibe, the lighting, everything. And they're all pretty laid back, so it's got a bohemian nature.
Running a restaurant each day and operating a software development company are quite different (for one thing, having a new boss every week wouldn't work at a company like Fog Creek), but rotating managers on a project-by-project basis might work well. (BTW, I think Adaptive Path at one point rotated the presidency of the company through each of the founders in one-year chunks.)
Pentagram's organizational structure provides a third possible way of avoiding a traditional system of middle management...although probably less germane to the Fog Creek situation than the previous two examples. The company is composed of several loosely connected teams that operate more or less autonomously while sharing some necessary services. Pentagram partner Paula Scher explained the system in her book, Make It Bigger.
As a design firm Pentagram's structure is unique; it is essentially a group of small businesses linked together financially through necessary services and through mutual interests. Each partner maintains a design team, usually consisting of a senior designer, a couple of junior designers, and a project coordinator. The partners share accounting services, secretarial and reception services, and maintain a shared archive. Pentagram partners are responsible for attracting and developing their own business, but they pool their billings, draw the same salary, and share profit in the form of an annual bonus. It's a cooperative...
She goes on to add:
Pentagram's unique structure enabled me to operate as if I were a principal at a powerful corporate design firm while maintaining the individuality of a small practitioner.
Working small with the resources of a bigger firm, that's the common thread here. I imagine there are many more similar approaches but these are a few I've run across in the past couple of years.
She sought out Michel Roudnitska, a perfumer who lives in France, to be her collaborator. Her family in her hometown of Villanova, Pa., served as her focus group. A friend volunteered to tie by hand the grosgrain ribbon bow that decorates each package. Then Ms. Dunne cold-called Claudia Lucas, the perfume buyer at Henri Bendel in Manhattan, and asked whether she could send a sample of the perfume.
More information about Ellie, as well as a more contemporary scent called Ellie Nuit, is available on Dunne's site.
Yesterday developer Armin Heinrich posted an iPhone app to the App Store called I Am Rich. The program displays a red gem, has no function but to display your wealth to others through ownership, and costs $1000. It has since been removed from the App Store, although no one knows whether Apple or Heinrich pulled it.
I Am Rich isn't the most clever piece of art, but it's not bad either. For some, the iPhone is already an obvious display of wealth and I Am Rich is commenting on that. Plus, buying more than you need as an indication of wealth is practically an American core value for a growing segment of the population. Is paying $5000 for a wristwatch or $50,000 for a car when much cheaper alternatives exist really all that different than paying $1000 for an iPhone app?
When news of the app got out onto the web, the outcry came swiftly. VentureBeat implored Apple to pull it from the App Store, as did several other humorless blogs. Blog commenters were even more harsh in their assessments. What I can't understand is: why should Apple pull I Am Rich from the App Store? They have to approve each app but presumably that's to guard against apps which crash iPhones, misrepresent their function, go against Apple's terms of service, or introduce malicious code to the iPhone.
Excluding I Am Rich would be excluding for taste...because some feel that it costs too much for what it does. (And this isn't the only example. There have been many cries of too many poor quality (but otherwise functional) apps in the store and that Apple should address the problem.) App Store shoppers should get to make the choice of whether or not to buy an iPhone app, not Apple, particularly since the App Store is the only way to legitimately purchase consumer iPhone apps. Imagine if Apple chose which music they stocked in the iTunes store based on the company's taste. No Kanye because Jay-Z is better. No Dylan because it's too whiney. Of course they don't do that; they stock a crapload of different music and let the buyer decide. We should deride Apple for that type of behavior, not cheer them on.
8. Ditch the underperformers: In July, Starbucks announced its closure of 600 stores. Check this map for a closure near you, or peep the full list. It's also dropping 61 of its 84 stores in Australia, and eliminating 1,000 support jobs (not including all layoffs due to stores closures).
Yahoo is grown up. They know what they're great at. They are great at news. When it comes to news, they absolutely crush Google. So here's a whacky idea my Yahoo friends. Why not define yourself by your news services and the other stuff where you destroy the competition?
After yesterday's iPhone 3G revelry, the inevitable hangover. AT&T is done playing nice with iPhone customers. First off, the data plan for 3G is $10 more than the old plan. Second, in-store activation is required, "which takes 10-12 minutes"...with the old version of the iPhone, you could activate through iTunes and it took 2 minutes. (That means no online ordering of phones either.) Third, Apple and AT&T may be working on a purchase penalty for those who don't activate their phones within 30 days...so no more buying a phone to use on another network. Four: no prepaid plans. Yay?
Every year or so, the same question is asked: how is the Moneyball strategy working out for the Oakland A's. This year's answer is: pretty damn good.
Additions like [Frank] Thomas, motivated by this incremental approach, help explain why the A's have won so many games in recent years even though they've consistently traded away or declined to re-sign their top players (Jason Giambi, Miguel Tejada, Tim Hudson, etc.), who demand top dollar--and largely on the basis of past performance. In short, Beane has bought low and sold high repeatedly and systematically, and as a result the A's have won more games this decade than every team in the league except the Yankees (whose team payroll is routinely two-to-four times larger than Oakland's).
"There is an assumption in the corporate world that you need to integrate swiftly," Mr. Iger said. "My philosophy is exactly the opposite. You need to be respectful and patient." Key to the successful integration, analysts say, has been Mr. Iger's decision to give incoming talent added duties. Instead of just buying Pixar and moving on, Mr. Iger understood what made the acquisition valuable, said Mr. Price, the author. "If you are acquiring expertise," he said, "then dispatch your newly purchased experts into other parts of the company and let them stretch their muscles."
It also sounds as though Pixar has loosened their high standards since the acquisition...they're outsourcing some animation, doing more sequels (Cars 2, presumably for the merchandising), and making several direct-to-DVD movies.
From this quick overview of why internet shoe retailer Zappos is such a great company, this clever hiring practice:
When Zappos hires new employees, it provides a four-week training period that immerses them in the company's strategy, culture, and obsession with customers. People get paid their full salary during this period. After a week or so in this immersive experience, though, it's time for what Zappos calls "The Offer." The fast-growing company, which works hard to recruit people to join, says to its newest employees: "If you quit today, we will pay you for the amount of time you've worked, plus we will offer you a $1,000 bonus." Zappos actually bribes its new employees to quit!
That's pretty fucking brilliant. It applies a direct incentive of cold hard cash against what the company wants: employees dedicated not primarily to their paycheck but to the company/customers.
Picking a subject from his upcoming book, Malcolm Gladwell talked about the difficulty in hiring people in the increasingly complex thought-based contemporary workplace. Specifically that we're using a collection of antiquated tools to evaluate potential employees, creating what he calls "mismatch problems" in the workplace, when the critera for evaluating job candidates is out of step with the demands of the job.
To illustrate his point, Gladwell talked about sports combines, events that professional sports leagues hold for scouts to evaluate potential draftees based on a battery of physical, psychological, and intelligence tests. What he found, a result that echoes what Michael Lewis talks about in Moneyball, is that sports combines are a poor way to determine how well an athlete will eventually perform as a member of their eventual team. One striking example he gave is the intelligence test they give to NFL quarterbacks. Two of the test's all-time worst performers were Dan Marino and Terry Bradshaw, Hall of Famers both.
A more material example is teachers. Gladwell says that while we evaluate teachers on the basis of high standardized test scores and whether they have degrees and credentialed training, that makes little difference in how well people actually teach.
City Café Bakery in Kitchener, Ontario doesn't have a cash register. Instead, they let their customers add up their own bill and put the money into a an old bus fare box. Here's how it works:
"I liked the idea of simplifying things and ... the honour system made a whole lot of sense," Bergen says. "What irritated me about going into Tim Hortons, for example, was waiting in line for something as simple as getting a donut and a coffee. So the thought was, someone can pour his own coffee, grab his own bagel, cut it himself, throw the money in, and walk out. We don't touch 60 per cent of the transaction."
"Everything is rounded off to the nearest quarter with taxes included where applicable," he says. "So every desert is $1.50 (tarts, brownies, and date squares), every pizza lunch is $5, every beverage is $1.25, every loaf of bread is $2.75 (Italian sourdough, multi-grain, and raisin bread on weekends), croissants are $1 each, and bagels are three for $2 (plain, sesame, and multi-grain)."
The bakery conducts audits every six months and Bergen says only once did things come up short.
"Our theory is that two per cent of our sales are being ripped off. 'Ripped off' in the sense that there are people who forget to pay or they make a mistake in paying, and then there are people who deliberately don't pay. And every so often we have to kick somebody out that we know hasn't been paying," he says. "But at the same time we figure we're being overpaid by three per cent. Some people come in and want a $2.75 loaf of bread, but they see we're busy so they throw $3 in and walk out. Or, although we discourage tips, some people still give them to us. But because the staff is paid well (the average wage is $15.50 an hour), the tips go into the general pot."
The big tech/business news of the day is Yahoo's stock "plunge" following the withdrawl of Microsoft's takeover offer. I'm sure plunge headlines sell newspapers and all, but the more long-term story is more interesting.
On Jan 31, the day before Microsoft offered $31/share for Yahoo, YHOO was at $19.18/share (market cap: $26.4 billion) and MSFT was at $32.60/share (market cap: $303.6 billion). At the close of trading today, YHOO closed at $24.37/share (market cap: $33.5 billion) and MSFT was at $29.08/share (market cap: $270.8 billion). In other words, the Microsoft offer increased the value of Yahoo! Inc. by more than $7 billion and decreased the value of Microsoft Corporation by almost $33 billion. In still other words, in attempting to take Yahoo by force, they let an amount equal to Yahoo slip through their fingers. Why isn't anyone writing about Yahoo's amazing stock gains and Microsoft's plunge?
In my experience, the thing that has the most significant impact on a movie's budget -- but never shows up in a budget -- is morale. If you have low morale, for every $1 you spend, you get about 25 cents of value. If you have high morale, for every $1 you spend, you get about $3 of value. Companies should pay much more attention to morale.
Some say the Disney magic is back. Hit TV shows (Hannah Montana), increased revenue from movies (Enchanted), and the acquisition of Pixar are all contributing factors, but new CEO Bob Iger is getting the most credit.
Mr Iger's management style is said by many to have unlocked Disney's creativity. "There was already creativity inside Disney, but Bob removed the barriers to it," says Peter Chernin, chief operating officer of News Corporation, a rival media group. "Michael Eisner was all about his own creativity," says Stanley Gold, a former Disney board director who led a campaign to oust Mr Eisner in 2004, referring to the way in which the former boss meddled in the detail of Disney's parks and movies. In contrast, he says, "Bob pushes creative decisions to the people below him."
Said it before and I'll say it again: hire good creative people, let them do their thing, and ye shall reap the benefits. And Christ, no wonder Disney was sucking so bad:
Before Mr Iger took over, Disney had a factory-like process for animation in which a business-development team came up with ideas and allocated directors to them.
Just got around to reading Ben McGrath's New Yorker profile of Lenny Dykstra, the former baseball All-Star who has, somewhat improbably, become rich post-baseball as a business owner and day trader.
Dykstra last played in the majors in 1996, at age thirty-three. Improbably, he has since become a successful day trader, and he let me know that he owns both a Maybach ("the best car") and a Gulfstream ("the best jet").
But maybe not so improbably...Dykstra has a canny sense for business:
Dykstra chose car washes, he says, because of the automobile-centric culture in California, and because "it was a business that couldn't be replaced by a computer chip." He brought his own frustrated consumer experiences to bear in creating the business model, and eliminated many of the usual array of motor-oil choices-startup, high-mileage, various blends-from his inventory. "You get the shit out of the ground," he said, referring to standard Castrol GTX, "or the shit made in the laboratory that's the perfect lubricant" (Syntec). "Meaning, it's either A or B. It's not about the oil. It's about the people. They got confused." He stocked the places with baseball memorabilia and flat-screen TVs, and served free coffee ("the good kind"), so that customers would associate the experience with luxury rather than with cumbersome chores.
One of the characteristics of Dykstra the businessman is his constant use of baseball metaphors and comparisons. Here's a listing from the article:
The Players Club, in contrast to the television installation, would be "major league," he explained, and to that end he was assembling an editorial staff of ".300 hitters," and lining up sponsors to match.
Dykstra's business card gives an address for the "headquarters" of The Players Club, at 245 Park Avenue, which he describes as "big league-like, top five addresses in the world."
Next, he took a call from a designer he wanted to hire for the magazine. "You worked for Esquire and In Style," he said, delivering a pep talk. "That's called the big leagues. It's like in baseball. You can't go above the major leagues. There's not another league. We're teeing it up high, dude."
He quoted from Confucius, Dickens, and Billy Joel, and balanced straight stock picks ("Intel is the N.Y. Yankees of the chipmakers") with musings about fatherhood and current events, like the war in Iraq, seldom passing up the opportunity to draw extended sports analogies.
"My approach in investing is much the same as my approach to hitting," he wrote. "I would rather take a walk or single and reach first than shoot for a home run and strike out swinging."
Dykstra hopes the magazine will help players recognize the importance of marriage and family. He drew three stick figures and named them Tom, Dick, and Harry. Above Tom, he drew a man and a woman-two parents. Dick got a father but no mother, and Harry the reverse. "Do you know the studies and what they've proven?" he asked. "You should look that up, dude. Like, bad things. It's like the one-one count." The one-one count is another of Dykstra's baseball metaphors for life, meant to illustrate that some moments, and the choices they bring, are more fateful than others (i.e., the next pitch makes all the difference), or, in this case, that circumstances set in motion during the early stages of development are difficult to overcome later on. If a batter falls behind, one ball and two strikes, he's in a hole from which, the statistics augur, he will not recover, even if he is Barry Bonds; and if he gets ahead, to two balls and one strike, he wrests control from the pitcher and takes charge of his own destiny. Having two parents puts you in control of life's count, and enables you to become a .300 hitter.
The 46-year-old has no more than $50,000 of assets and between $10 million and $50 million of liabilities, according to a petition filed Tuesday with the U.S. Bankruptcy Court in the Central District of California.
Dykstra's filing comes in the wake of more than 20 lawsuits he faces tied to his activities as a financial entrepreneur, including The Players Club, a glossy magazine for athletes he had helped launch in 2008.
Sounds like he was a little over-leveraged. (thx, todd)
"You've been asking for data," Ebbesen says to me. "Well, we definitely have energy savings: we've had one study that said 25 percent and another that said 40 percent. We pay a lot of attention to the energy model because we want to be efficient, because that leads to less pollution. But that's not where the savings are. The savings are all related to productivity." Navy Federal's wealth (they don't exactly have trouble getting long-term financing) means that Ebbesen could swallow higher up-front costs if it means a longer life span-and indeed this building is designed for a 40-year cycle (generous for its type). But to be conservative he sticks to 30 years for the following calculation: over that time 92 percent of the organ-ization's costs goes to employees, 6 percent go to maintenance and operation, and a mere 2 percent are represented by the initial construction investment. "When I show that on a slide," Ebbesen says, "it's kind of like, 'Duh, now are you paying attention?'"
With their new environmentally friendly buildings, Navy Federal has reduced their annual employee turnover rate from 60% to 17%.
You can see it coming...just like in 1999/2000, the failure of all these shitty businesses built on sand will be blamed on an economic downturn and not that companies who make widgets for Facebook are not worth anything close to $500,000,000.
The Riverdale Garden Restaurant in the Bronx is trying out a novel way of staying in business: they're asking for their regulars to pledge $5000 in exchange for a year of free dinners.
Michael had put The Riverdale Garden up for sale for the past several months and had a buyer. However, the landlord "killed" the deal. We are now forced to close for good or rely on our best customers to put their money where their mouths are! Quite literally........ You will be eating your investment. Bottom line is we have 12 couples so far ready to invest $5000 in dining credits, however we need 38 more.
When copies are super abundant, they become worthless. When copies are super abundant, stuff which can't be copied becomes scarce and valuable.
He then lists eight reasons why people pay money for things that could be free, one of which is immediacy:
Sooner or later you can find a free copy of whatever you want, but getting a copy delivered to your inbox the moment it is released -- or even better, produced -- by its creators is a generative asset. Many people go to movie theaters to see films on the opening night, where they will pay a hefty price to see a film that later will be available for free, or almost free, via rental or download. Hardcover books command a premium for their immediacy, disguised as a harder cover. First in line often commands an extra price for the same good.
1. Usually when you order meat or cheese at the deli counter (e.g. "I'll have a 1/2 pound of pastrami, please"), the person behind the counter tries to get as close as they can to the weight you ordered but it's often a little over and you're charged for the overage. I've noticed that what they do at Whole Foods is that they only charge you for what you asked for but they give you the little extra for free. So yesterday I asked for a 1/2 pound of roast beef, but it came out to 0.57 when he weighed it. He lifted a bit of the meat off the scale until it read 0.50, printed the ticket, and put the little extra back on the scale. It's a nice gesture and a good example of using customer service instead of marketing or advertising to give a current customer a warm and fuzzy feeling about the company...and it only costs them 20 cents-worth of roast beef.
2. We went out to eat with some friends the other night but the restaurant was tiny, packed, and didn't have anywhere to put Ollie's stroller. So the owner took the stroller and put it in the back of his truck that was parked out in front of the restaurant. (While there, we dined on a cheese plate with, like, 30 to 40 different cheeses on it, some of which were made by the stroller valet himself.)
The transaction-level data we collected suggests that street prostitution yields an average wage of $27 per hour. Given the relatively limited hours that active prostitutes work, this generates less than $20,000 annually for a women working year round in prostitution. While the wage of a prostitute is four times greater than the non-prostitution earnings these women report (approximately $7 per hour), there are tremendous risks associated with life as a prostitute. According to our estimates, a woman working as a prostitute would expect an annual average of a dozen incidents of violence and 300 instances of unprotected sex.
The authors also noted that a prostitute was "more likely to have sex with a police officer than to get officially arrested by one". (via marginal revolution)
That question hits an important point in my work (and pet peeve), because many people are always interested in how I get work out there, financially. And it's quite simple. If there's something I really believe in, I just find a way to make it happen. No daily Starbucks (US$4) or cigs ($8) or dining out ($20), and before you know it you've got the money to do something.
Why can we not get better quality snack items for our coach customers? One customer recently compared the generic pretzel nubs we serve to the fish food you buy in a .25 gumball machine at any zoo or park.
I like the openness policy of the US Airways CEO...the "employees are going to talk about it anyway" line is exactly right.
Others grouse about another side effect, price pressure: The competition is so intense on the site that new crafters can't break out, and some established ones feel they cannot raise their prices. That's a particularly thorny problem if part of your sales pitch is that you've made a thing yourself; a careful artisan can't respond to lower prices with greater volume.
Artisanship doesn't scale, apprentices take time to train, and people buy products based on price. How do artisans compete?
Trying stuff is cheaper than deciding whether to try it. (Compare the cost of paying and feeding someone to do a few weeks of [Perl or PHP] hacking to the full cost of the meetings that went into a big company decision.) Don't overplan something. Just do it half-assed to start with, then throw more people at it to fix it if it works.
I hoped that people who loved the blog would spill over to people who read Dilbert, and make my flagship product stronger. Instead, I found that if I wrote nine highly popular posts, and one that a reader disagreed with, the reaction was inevitably "I can never read Dilbert again because of what you wrote in that one post." Every blog post reduced my income, even if 90% of the readers loved it. And a startling number of readers couldn't tell when I was serious or kidding, so most of the negative reactions were based on misperceptions.
When Italian police recently arrested Salvatore Lo Piccolo, the suspected head of the Sicilian Mafia, they also found a list of ten commandments that served as a guide for the behavior of Mafia members.
1. No one can present himself directly to another of our friends. There must be a third person to do it.
2. Never look at the wives of friends.
3. Never be seen with cops.
4. Don't go to pubs and clubs.
5. Always being available for Cosa Nostra is a duty - even if your wife's about to give birth.
6. Appointments must absolutely be respected.
7. Wives must be treated with respect.
8. When asked for any information, the answer must be the truth.
9. Money cannot be appropriated if it belongs to others or to other families.
10. People who can't be part of Cosa Nostra: anyone who has a close relative in the police, anyone with a two-timing relative in the family, anyone who behaves badly and doesn't hold to moral values.
I smell a future bestseller: Leadership Secrets of the Cosa Nostra...it's the new 48 Laws of Power.
We will require, from a larger and larger percentage of our work force, the ability to engage in relatively complicated analytical and cognitive tasks. So it's not that we're going to need more geniuses, but the 50th percentile is going to have to be better educated than they are now. We're going to have to graduate more people from high school who've done advanced math, is a very simple way of putting it.
Other recent and not-so-recent writings and talks by Gladwell on working, education, and genius include:
I was just back and not ready to deal with that, so I replied that my mom had died but that I'd send the shoes as soon as I could. They emailed back that they had arranged with UPS to pick up the shoes, so I wouldn't have to take the time to do it myself. I was so touched. That's going against corporate policy.
And that's not even the best part...read down to the end. (via 37signals)
Marginal Revolution and CNN (and New York magazine and Reddit and etc.) asked their respective readers: how much did you pay for In Rainbows, Radiohead's new album which is only available as a pay-what-you-want download. I paid around £8.50 (~ US$17), which splits the difference between a typical album price in the UK and the US. (Actually, what I did was download it from elsewhere because Radiohead's online store was down yesterday morning and then went back to pay for it just now.)
As dentists push their fees higher and make more money on high-end services like cosmetic dentistry, a growing number of people cannot afford treatment for even minor work like fillings. And even though the dentists won't treat those patients who can't pay, the ADA has "fought efforts to use dental hygienists and other non-dentists to provide basic care to people who do not have access to dentists".
"Most dentists consider themselves to be in the business of dentistry rather than the practice of dentistry," said Dr. David A. Nash, a professor of pediatric dentistry at the University of Kentucky. "I'm a cynic about my profession, but the data are there. It's embarrassing.
As on an ordinary aircraft, customers buckle themselves in and watch a safety demonstration. But when they look out of the windows, the landscape never changes. Even if "Captain" Gupta wanted to get off the ground, the plane would not go far: it only has one wing and a large part of the tail is missing.
You're going to have to create internal structures that will help people grow into positions; that's really where the real opportunity is going to be. That's what we're going to have to do. That means being more patient with people, being willing to experiment with people, and being willing to nurture people. Those are three things we're reluctant to do at the moment.
It works only if you truly are willing to walk away...and then refuse to bend when they try to put you off or change the terms. Stay civil, do not let any emotion in. You are on a mission, Marine!
Fantastic advice. My dad is a skilled car buyer and on one particular occasion, spend two grueling hours dinkering with a used car saleman over a junky but good-running truck. He walked out at least twice and kept escalating up to the manager before getting the price down from $2300 to around $400.
I also think that the array of amuse-bouches, breads and petits fours that an ambitious restaurant now makes an integral part of the meal has got completely out of hand.
Dr. Jay Parkinson M.D. emailed in to tell me about his new medical practice in Williamsburg. He's got no office (housecalls only), takes appointment requests via SMS, email, or IM, handles some follow-ups over video chat, and specializes in the 18-40 age group without traditional health insurance. The goal, states Parkinson, is to "mix the service of an old-time, small town doctor with the latest technology to keep you and your bank account healthy".
Yesterday went quite well and I was very happy with the amount of money I kept out of the hands of companies that attempt to take advantage of how difficult it is to find prices for medications and healthcare services. For example, the first patient I saw needed a medication that Walgreens offered for $60. I called my tried and true Williamsburg mom-and-pop pharmacy only a few blocks from Walgreens and talked to Arthur the Pharmacist who said he sells it for $15. "Thanks Arthur." "No thank you Jay." The way it should be done.
My second patient was getting a certain medication for years every month by mail from Walgreens that costs $63 per month. I knew where she could get the same medication for $42 a month. I just saved her $252 per year. After she made her $200 down payment on my services via PayPal, her monthly fee for my services is now only $17 a month. But I just saved her $21 a month on her monthly mail order medication. She's essentially getting the rest of the year of my services for free. Not bad.
Sounds fantastic. If only every doctor was this much of an advocate for his patients.
The personal lives of CEOs have come under scrutiny lately because what a CEO does in his off-hours seems to have a bearing on how well his company's stock performs. "It found that on average, the stocks of companies run by leaders who buy or build megamansions sharply underperform the market. The researchers don't claim to know why. They theorize that some of these executives might be focused more on enjoying their wealth and less on working hard." (via mr)
Also, I loved that the WSJ published the nickname of "Frederick E. 'Shad' Rowe Jr." Shad Rowe!
A few years ago, I posted an entry about a Manhattan coffee and donut vendor who let his customers make their own change.
When an environment of trust is created, good things start happening. Ralph can serve twice as many customers. People get their coffee in half the time. Due to this time savings, people become regulars. Regulars provide Ralph's business with stability, a good reputation, and with customers who have an interest in making correct change (to keep the line moving and keep Ralph in business). Lots of customers who make correct change increase Ralph's profit margin. Etc. Etc. And what did Ralph have to pay for all this? A bit of change here and there.
I get my occasional donut in another part of town now, but I noticed something similar with my new guy. Last Friday, the woman in front of me didn't order anything but threw down a $20, received a coffee with two sugars a moment after she'd stepped to the window, and no change. As they chatted, I learned that the woman pays for her coffee in advance. The coffee guy asked her if she was sure she owed today. "Yep," she replied, "It's payday today; I get paid, you get paid." Handy little arrangement.
Several of the web's most popular sites (Digg, YouTube, MySpace, CNN) are using the mullet strategy (business up front, party in the rear) for content to attract both boisterous users and well-heeled advertisers. "They let users party, argue, and vent on the secondary pages" -- that's the party in the rear -- "but professional editors keep the front page looking sharp" -- the business up front.
An update regarding Harry Potter and the Phantom Delivery: Amazon issued me a refund for the book. I'm close to the end of the book...I hope it ends as well.
Back in April, I pre-ordered Harry Potter 7 from Amazon. They guaranteed delivery on its release date, Saturday July 21 before 7pm or they would refund the cost of the book...the details of that offer are here. All day Saturday until shortly after 7pm, the UPS tracking information indicated that the package containing my copy of the book was "IN TRANSIT TO FINAL DESTINATION", which is UPS-speak for "the UPS guy/gal who will deliver your book does not yet have it in his/her possession"...the magic phrase for that action is "OUT FOR DELIVERY".
At some point after 7pm, the UPS status page updated to say that a notice was left at 3:36 pm, implying that a delivery attempt was made and no one was home to receive it. (Amazon's tracking page says that UPS told them "Delivery attempted - recipient not home".) No such notice was left. My door buzzer did not ring at 3:36 pm (I was home all day on Saturday) and the doorman of the building next door who takes the deliveries for our building when people aren't home reported no notice or delivery attempt. Here's the complete tracking info from UPS:
Location // Date // Local Time // Description
NEW YORK, NY, US // 07/21/2007 // 3:36 P.M. // NOTICE LEFT
NEW YORK, NY, US // 07/20/2007 // 12:00 P.M. // IN TRANSIT TO FINAL DESTINATION
NEW YORK, NY, US // 07/19/2007 // 4:51 P.M. // DESTINATION SCAN
NEW YORK, NY, US // 07/19/2007 // 4:50 P.M. // ORIGIN SCAN
US // 07/19/2007 // 1:34 P.M. // BILLING INFORMATION RECEIVED
Maybe I'm lying about being home or maybe the person trying to deliver the package made an honest mistake, but it's curious that a delivery attempt could have been made when the package was not even "OUT FOR DELIVERY". Here's what I think happened. I think UPS's network was overwhelmed by Amazon's Potter-volume in some parts of the country and they had no way to deliver all those packages. (The forums for the book at Amazon and Google Blog Search are full of similar complaints from others...warning, spoilers! UPS even offloaded some of the volume to the USPS for "last-mile" delivery.) So, UPS just marked all of those packages they had no intention of delivering as "oops, we missed you, you must have been out".
Let's go back to Amazon's guarantee, which states that the refund "does not apply if delivery is attempted, but no one is available to accept the package". Amazon would be pretty angry with UPS if they cost them a bunch of money due to refunds and, more importantly, the loss of a bunch of customer goodwill...maybe Amazon would switch a larger portion of their formidable package output to another carrier, for instance. So UPS intentionally misclassifying those deliveries covers their ass with Amazon and covers Amazon's ass with regard to the refund.
My copy of the book from Amazon will be here sometime today (UPS doesn't deliver on Sunday), by which time I'll already have mostly finished the copy I bought at Barnes & Noble about 7:30 pm Saturday evening. The extra $20 isn't a big deal to me and neither is having to wait all day to start in on the book. But this book was a *huge* deal for Amazon (2+ million pre-orders out of a first printing of 12 million) and for their customers who desired their instant Potter gratification. Amazon should be hopping mad at UPS over this; UPS shifted the blame from themselves to Amazon's customers...who are in turn going to blame Amazon, doubly so because Amazon probably won't might not issue refunds for those "missed" deliveries because they don't need to. A customer service-oriented company like Amazon shouldn't take this kind of crap from their shipping vendor...incidents like these will erode customer goodwill and eventually their customer base, the retention of which is one of Amazon's stated primary goals.
Update: I've asked Amazon for a refund and am waiting on their reply. From the emails I've gotten from readers so far, it sounds like Amazon is being liberal in the refund policy, as one would expect.
Update: No word from Amazon yet, but the USPS (not UPS) delivered my book Monday morning. It had a UPS sticker on it with instructions to the Post Office to deliver it to me. No update on the UPS tracking page that its been delivered. I'm tempted to leave it unopened in its custom Amazon box as a collector's item. Maybe I can get JK Rowling and Jeff Bezos to sign it.
CEOs must be designers, not just hire them. "Design is no longer just about form anymore but is a method of thinking that can let you to see around corners. And the high tech breakthroughs that do count today are not about speed and performance but about collaboration, conversation and co-creation."
Update:Some more interesting iPhone statistics, including Apple's stock price increase since the iPhone was announced ($32 billion increase in market cap) and that iPhone was mentioned in 1.25% of all blogs posts over the weekend. (thx, thor)
Update:Apple's stock price went down this morning in heavy trading. I guess Wall Street wasn't so over the moon for the iPhone?
How Whole Foods is using longer checkout lines to ensure faster checkouts in its Manhattan stores. "Whole Foods executives spent months drawing up designs for a new line system in New York that would be unlike anything in their suburban stores, where shoppers form one line in front of each register. That traditional system, they determined, would take up too much space and could not handle the crowds they expected here."
For the past few years, the workforce at Best Buy has been transitioning from a "how much you work" model to a "how much work you get done" model, with promising initial results. "Hence workers pulling into the company's amenity-packed headquarters at 2 p.m. aren't considered late. Nor are those pulling out at 2 p.m. seen as leaving early. There are no schedules. No mandatory meetings. No impression-management hustles. Work is no longer a place where you go, but something you do. It's O.K. to take conference calls while you hunt, collaborate from your lakeside cabin, or log on after dinner so you can spend the afternoon with your kid."
NY Times on the rise of OpenTable, which wasn't exactly an overnight success. To me, the thing that pushed OT over the edge toward acceptance wasn't so much the public-facing business (let your customers make reservations online) but the software that the restaurants were provided to keep better track of their customers and their habits. It used to be a big deal that Four Seasons Hotels tracked the preferences of all their customers but now any restaurant with the OT system can easily do the same. "Doug Washington, a co-owner of Town Hall, said the notes were not just helpful, they are occasionally indispensable. Next to the name of one regular, who has a habit of bringing in women he is not married to, is an instruction to make sure the man's wife has not booked a separate table for the same day."
Long profile of Steve Jobs on the eve of his fourth act written by John Heilemann, who is one of my favorite technology/culture writers. I'm dying to find out what past Jobs-championed Apple product the iPhone will most resemble: the Lisa or the iPod?
Digg policies from Lifehacker and Gizmodo, which state that the only Digg-worthy posts of theirs are those with "original content, new reporting, treatment, or photos" because "it's not fair when we get the Digg for someone else's work." This seems inconsistent on the part of Gawker Media. One of their main innovations (if you'd like to call it that) regarding the blog format was the idea of linking to things in such a way that readers don't need to actually leave the site to get the full (or nearly full) story. Why let all those readers (and the associated ad revenue) go to some other site to read the story...they might never return. Due in part to Gawker's influence as first mover in the pro blog space, this practice is unfortunately standard procedure for most similar blogs.
Bad news from McSweeney's: their distributor filed for bankruptcy late last year and now they're out $130,000:
As you may know, it's been tough going for many independent publishers, McSweeney's included, since our distributor filed for bankruptcy last December 29. We lost about $130,000 -- actual earnings that were simply erased. Due to the intricacies of the settlement, the real hurt didn't hit right away, but it's hitting now. Like most small publishers, our business is basically a break-even proposition in the best of times, so there's really no way to absorb a loss that big.
To try and make up the gap, they're having a big sale and are also auctioning off some "rare items" like original art from Chris Ware, proofs from issues, signed copies of things, a painting by Dave Eggers of George W. Bush as a double amputee, and so on. In addition to Ware and Eggers, there's stuff from David Byrne, Nick Hornsby, and Spike Jonze. I've long admired McSweeney's for their editorial and business approach...it would be a shame to see them go out of business because of another company's financial difficulties. So give them a hand by purchasing something, if you'd like.
Marc Andreessen on how to hire good people. Don't just hire smart people or people with degrees...look for drive, curiosity, and ethics. "Pick a topic you know intimately and ask the candidate increasingly esoteric questions until they don't know the answer. They'll either say they don't know, or they'll try to bullshit you. Guess what. If they bullshit you during the hiring process, they'll bullshit you once they're onboard."
Why are so many web entrepreneurs so young? Because the beginner's mind is an advantage that the young have and the old can't easily reclaim. "The principal asset a young tech entrepreneur has is that they don't know a lot of things. In almost every other circumstance, this would be a disadvantage, but not here, and not now. The reason this is so (and the reason smart old people can't fake their way into this asset) has everything to do with our innate ability to cement past experience into knowledge." Wisdom is a bitch.
Big-seed marketing. Instead of relying purely on viral marketing or mass media marketing alone, big-seed marketing combines the two approaches so that a large initial audience spreads the marketing message to a secondary audience, yielding more overall interest than either approach would have by itself, even if the message isn't that contagious. "Because big-seed marketing harnesses the power of large numbers of ordinary people, its success does not depend on influentials or on any other special individuals; thus, managers can dispense with the probably fruitless exercise of predicting how, or through whom, contagious ideas will spread."
Curious story of what's up with JPG Magazine, a photography mag founded by Heather Champ and Derek Powazek. Derek formed a new company (8020 Publishing) with a friend (Paul Cloutier) and that company bought JPG. Then, says Derek, "Paul informed me that we were inventing a new story about how JPG came to be that was all about 8020. He told me not to speak of that walk in Buena Vista, my wife, or anything that came before 8020." The founding and the first 6 issues of JPG were removed from the site and Derek left his company. More from Heather and on MetaFilter, including this nice sentiment: "The great thing about a labour of love is the love, not the labour."
The long-term success of films isn't always determined by how they did at the box office. Traffic made $124 million at the box office in 2000 while Requiem for a Dream made only $3.6 million ($9.50 of which was mine), but Requiem gets rented 33 percent more from Netflix than Traffic. 'It's almost impossible to go onto someone's MySpace page now and not find a reference to [the Coen brothers'] "The Big Lebowski" or [Terry Gilliam's] "Fear and Loathing in Las Vegas"' - two movies that caused barely a ripple in the theaters."
Dodgeball founders leave Google and that leaves Dodgeball probably dead. Then why did Google buy Dodgeball exactly? Not for the founders...they left. Not for the tech. To build it up into a profitable company? (Nope, they didn't put any resources into it.) To kill it before some other company (Yahoo, Microsoft) got their mitts on it? For the PR value? Why did they even bother?
Update:Official thumbs-down announcement here. "It's no real secret that Google wasn't supporting dodgeball the way we expected. The whole experience was incredibly frustrating for us - especially as we couldn't convince them that dodgeball was worth engineering resources, leaving us to watch as other startups got to innovate in the mobile + social space. And while it was a tough decision (and really disappointing) to walk away from dodgeball, I'm actually looking forward to getting to work on other projects again."
In the high stakes game of making restaurant reservations in NYC, restaurants and their patrons are engaged in attempting to outflank one another in vying for tables at prime times. "I have a well-connected friend in the entertainment industry, and I often say I am calling from his office in order to score a weekend reservation at a crowded restaurant. If NYC restaurants are going to play the game this way, we have no choice but to play along with them."
I feel like I've linked to this before but here it is again (maybe): a list of how companies got their names. "Mattel - a portmanteau of the founders names Harold 'Matt' Matson and Elliot Handler." (via khoi)
Stay Free interviews Giles Slade, the author of a book on planned obsolescence. "Companies profit more when products have shorter lifespans - because they sell more products that way. This is no conspiracy theory but, rather, simple economics. Small wonder, then, that product lifespans are shrinking across the board. In 1997, a PC was expected to last 4 or 5 years; by 2003, only two years, and today the life expectancy is even less."
Interesting article about the myth of American women opting out of the workforce to stay home to raise families. Most of the stories focus on white, married, upper-class women with high-earning husbands, maternity leaves are getting shorter, and bias and inflexibility in the workplace forces many women to "choose" to stay at home with the family. "The American idea of mothering is left over from the 1950s, that odd moment in history when America's unrivaled economic power enabled a single breadwinner to support an entire family. Fifty years later we still have the idea that a mother, and not a father, should be available to her child at every moment."
Business innovation. "Southwest has been able to generate more profits over the last 30 years than all of its incumbent competitors combined." Other examples: Google, Vanguard, W.R. Hambrect.
Quentin Tarantino talks about his success in the movie business. The bit about just doing something and not having to ask permission is great: "Here's the thing: they can write a mean letter, they can write a mean memo, but these guys don't have any real fight in them. If you're an artist, as opposed to a careerist, and your movie is more important to you than a career in this town, they can never beat you. You have a loaded gun, and you know you've got what it takes to put it in their faces and blow their heads off."
"One of the best pieces of advice Mickey ever gave us was to go rent a warehouse and build a prototype of a store, and not, you know, just design it, go build 20 of them, then discover it didn't work," says Jobs. In other words, design it as you would a product. Apple Store Version 0.0 took shape in a warehouse near the Apple campus. "Ron and I had a store all designed," says Jobs, when they were stopped by an insight: The computer was evolving from a simple productivity tool to a "hub" for video, photography, music, information, and so forth. The sale, then, was less about the machine than what you could do with it. But looking at their store, they winced. The hardware was laid out by product category - in other words, by how the company was organized internally, not by how a customer might actually want to buy things. "We were like, 'Oh, God, we're screwed!'" says Jobs.
But they weren't screwed; they were in a mockup. "So we redesigned it," he says. "And it cost us, I don't know, six, nine months. But it was the right decision by a million miles." When the first store finally opened, in Tysons Corner, Va., only a quarter of it was about product. The rest was arranged around interests: along the right wall, photos, videos, kids; on the left, problems. A third area - the Genius Bar in the back - was Johnson's brainstorm.
Lots of other great stuff in the article as well. Sounds like the Apple Store is an underrated piece of Apple technology.
Sometimes I think that what Americans are best at is inventing new forms of conspicuous consumption. A man who sells snow guns for personal use (so that the kids can play in the snow even when the weather doesn't oblige) says, "New Jersey is a big area for us. There's no snow, and lots of disposable income."
Tax tips for graphic designers and visual artists. "If seeing the visual art of others is vital to your own creativity, keeps you abreast of current design trends, or clues you in to the latest fashion, then consider the costs [of going to the movies or renting DVDs] a tax deduction." (thx, shane)
