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.
I don't know if you'll enjoy reading a NY Times profile of the Olsen Twins, but I was oddly fascinated.
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.
Muxtape v1.0, RIP
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.
Justin
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.
Update: Watch Ades in action on YouTube.
I mentioned Adaptive Path's employee advocacy system in my post the other day about alternative middle management strategies. Peter Merholz has written a little more about it on the AP blog today.
Not so middle management
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.
In remembrance of her grandmother, Chicagoan Jessica Dunne created her own perfume called Ellie.
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.
The $1000 iPhone app
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.
Fourteen ways in which Starbucks has tried to revitalize its brand.
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).
Caroline Kininmonth runs a restaurant in Australia that doesn't serve food. The place is BYOF and donations are accepted in a box next to the front door. (thx, john)
Dave Pell's advice for Yahoo!: Do What You're Great At.
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).
Check out the current positions of the A's and Yankees on the salary vs. performance graph.
The NY Times has a look at the progress made by Disney since their 2006 acquisition of Pixar, a purchase some say Disney paid too much for.
"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.
Gladwell on the mismatch problem
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."
See also: What The Bagel Man Saw and Business lessons from the coffee and doughnut guy. (via bb)
Yahoo stock plunges?
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?
Lessons from Pixar's Brad Bird on fostering innovation in the workplace.
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.
Business guru Lenny Dykstra
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.
Here's an archive of Dykstra's articles on trading for The Street.
The top five reasons why "the customer is always right" is wrong. I like the idea that a company should be as ready to fire bad customers as they are to fire bad employees.
The Navy Federal Credit Union has embraced green architecture, but not for any of the usual reasons.
"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.
A list of the stocks that have been added to and deleted from the Dow Jones Industrial Average since 1929. Got this from What I Learned Today, which has more information about the Dow (General Electric is the only remaining member of the original 11 Dow stocks).
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.
(via eater)
Kevin Kelly has written a thoughtful post about how to make money in a world where the rules are:
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.
Why take the hands-off approach to management?
Taking someone else's idea and increasing the quality by 5% occurs at the price of a 50% decrease in their commitment to execution.
More at the Harvard Business blog, which adds:
One of the greatest leaders I know once said, "Achievement was about me. Leadership is about them."
I've never wanted to be a manager...maybe I'm just too selfish?
Customer service
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.)
Very interesting paper on the economics of prostitution by Steven Levitt and Sudhir Venkatesh.
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)
Really interesting interview with artist/designer Tobias Wong by Rob Walker.
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.
Everyone's pissed at the airlines, even their employees.
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.
Big feature in the NY Times Magazine about online craftsters, specifically Etsy. Thought that this bit about the downside of the site was especially interesting:
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?
A fundamental rule of the internet:
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.
Cartoonist Scott Adams is going to be blogging a lot less on The Dilbert Blog because it's bad for business.
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.
(thx, hurty elbow)
The Mafia's ten commandments
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.
Update: There are already business books inspired by the Mafia: The Mafia Manager: A Guide to the Corporate Machiavelli and Tony Soprano on Management: Leadership Lessons Inspired By America's Favorite Mobster for a start. (thx, gleb)
Malcolm Gladwell's new book on the workplace of the future
A few days ago, New Yorker writer Malcolm Gladwell noted that he's almost finished with his third book. I've learned that the subject of this book is the future of the workplace with subtopics of education and genius. (That topic dovetails nicely with business consulting/speaking, no?) As with his previous books, hints of what the book will cover appear in his recent stories and interviews. Most relevant is an October interview with Gladwell in The Globe and Mail on "our working future".
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:
- his talk on genius from the 2007 New Yorker Conference
- The Risk Pool - What's behind Ireland's economic miracle and G.M.'s financial crisis? (more, more)
- The Myth of Prodigy and Why It Matters
- Getting In - The social logic of Ivy League admissions
- Brain Candy - Is pop culture dumbing us down or smartening us up?
- Gladwell's personal work space
- Making the Grade
- The Talent Myth - Are smart people overrated?
- The Social Life of Paper - Looking for method in the mess
- The Bakeoff - Project Delta aims to create the perfect cookie
- Designs For Working - Why your bosses want to turn your new office into Greenwich Village
- The New-Boy Network - What do job interviews really tell us?
What will air travel in the US look like in ten years? Five industry insiders respond.
Online shoe seller Zappos demonstrates how to provide customer service on a human level:
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)
In the ongoing battle between the iTunes Music Store and Amazon's MP3 store, Amazon is giving a 20% referral fee to their associates for each song sold through the end of the year. Wow. That's $1.80 on a $8.99 album...I wonder if Amazon's selling these for below cost (like they did with Harry Potter.) (via nelson)
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.
A Delhi man is doing a booming business in virtual airplane flights. Indians who have never been on an airplane before come from miles around and, for a small fee, experience the interior of an Airbus 300 and meal service.
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.
(thx, catherine)
The last we heard from Malcolm Gladwell, he wrote about Enron and information overload, got hammered by his blog audience about it, and then stopped blogging and wrote nothing more for the New Yorker for the next 10 months. Rumor is that he's busy working on a new book, not shellshocked from the feedback. Anyway, the Globe and Mail interviewed Gladwell the other day about the "working future".
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.
Everything is open for negotiation and for three months, Tom Chiarella tried to get deals on everything, from a hot dog to a gallon of gas to a TiVo.
Within weeks I discovered that restaurants will typically give you four desserts for the price of three if you ask for a sampler. That a draft beer is generally good for a free refill with a little prodding. That you can get an extra 20 percent off at Ikea by pressing past the cashiers, past the floor salespeople, up into the bottommost managerial rungs, by comparing the price of one perfectly well priced dresser with its slightly less well priced but better-sized counterpart one floor down.
Update: Bargainist has a piece about how to haggle that's worth a look.
A 13-step guide for buying a car while controlling the sale and the price.
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.
A few cost-cutting recommendations for restaurants, focusing on discontinuing "several practices that have been introduced to impress rather than to deliver value".
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.
(via bruni)
A list of 15 of the top small workplaces of 2007. If you run a small company, there are lot of good examples to follow here.
Bringing back the housecall
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".
To give you an idea of how the practice operates, here's a recap of his first day on the job:
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.
P.S. Parkinson also happens to be a heck of a photographer (@ Flickr). Some photos NSFW. I linked to this interview about his photography between him and Joerg Colberg last May.
Update: The WSJ Health blog has a short interview with Parkinson, followed by a lengthy comment thread.
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!
More business lessons from the coffee and donut guy
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.
Harry Potter and the Phantom Delivery
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.
Update: Amazon issued me a refund for the book.
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."
McSweeney's is opening a small design shop called Timothy McSweeney's Design House to "tackle smaller jobs where the personal touch is welcome". If I wanted a job, this is one of the places I'd apply. (via quipsologies)
In the battle of Steve Jobs (CEO of Apple) vs. Steve Jobs (former CEO of Pixar and current Disney Board member), Steve Jobs (Apple) was the clear winner. Apple sold an estimated 500,000 iPhones this weekend -- grossing somewhere between $250 million and $300 million -- while Pixar's Ratatouille grossed $47.2 million.
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."
Julian Dibbell on Chinese who farm gold (and perform other for-pay duties) in online games like World of Warcraft. "Nick Yee, an M.M.O. scholar based at Stanford, has noted the unsettling parallels (the recurrence of words like 'vermin,' 'rats' and 'extermination') between contemporary anti-gold-farmer rhetoric and 19th-century U.S. literature on immigrant Chinese laundry workers." Dibbell's Play Money was a great read and deserves wider readership than it originally received.
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.
McSweeney's in a spot of trouble
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.