Grinding Your Own

It’s Foodie Friday and the topic is ground beef. I try, whenever possible, to grind my own beef and the thinking behind that is also thinking that can be used in business decision-making.

You can walk into any supermarket and purchase ground beef. In fact, you can be very specific about chuck vs. sirloin, the percentage of fat in the mix and often grass-fed vs. non. That’s great in my mind when you are making chili or meatballs or some other dish requiring that the beef cooks for quite a while. For burgers, however, I’m grinding my own. I’ll generally grind a mix of chuck, brisket, and short rib and I’ll usually grind some parboiled bacon into the meat both for fat and for flavor. The biggest reason I take the time to do this, however, isn’t the flavor. It’s food safety. I like to eat my burgers on the rare side and ground beef from a store is generally not safe to eat unless it’s cooked more than I like it to be. I know what’s in my mix and that it’s safe to eat when cooked to less than 165 degrees.

Is it a pain to clean the grinder? Yes. Does it take more time than just opening a package from the store? Of course. But the results are much better and exactly what I want even if it costs a bit more and take more time. That’s exactly the process any business goes through when making a “build vs. buy” decision. Let me run you through the steps.

First, you need to validate that you actually need the technology you’re considering. In burger terms, I’m hungry so I need food. I have a legitimate need. In considering tech, you need to figure out if you’re finding a solution without a problem existing. Next, you need to pull together core business requirements. My burger must be safe to eat when rare, it must hold together on a grill, etc. You need to involve anyone whose business is affected by the proposed tech to be sure all constituents weigh in on requirements.

The technical architecture requirements come next. If you’re looking outside, can the product fit in with your existing infrastructure? Does it meet whatever standards your business has already? It’s only after the above steps have been taken that you can start to evaluate build vs. buy. In my case, I have a need, my requirements are clear, I’ve asked my dinner guests if they like burgers, how they want them cooked, and what they put on them. I figured out I’m building the beef but buying the rolls, mayo, pickles, onions, and tomatoes even though I could also build them.

The final steps in the evaluation concern costs and support but you get the point. Some managers start evaluation solutions before they pull together requirements and the overview of the environment in which the solution will live. While it was an easy decision for me to grind my own beef, few business decisions are as easy and require planning and forethought. Make sense?

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Break Up Facebook

I’m a capitalist. I’m a big believer that the free enterprise system should be left to work pretty much without outside interference. We can have a lively discussion as to whether that really ever happens (I don’t think it does) but I think we can agree that where the free enterprise system needs to have some controls imposed are when the system results in anticompetitive and/or anticonsumer behavior. Historically, the government takes action at that point, as it did with Standard Oil and with original AT&T. I think we’re at that point again with Facebook and I think the company needs to be broken up.

Many of you don’t remember the old AT&T. It controlled local phones, long-distance services, and the manufacture of most telephone equipment. You can read a detailed explanation of the hows and whys of the breakup here but the net result was that phone services got more competitive, equipment improved, and the number of wireless services and broadband providers we have now is a result. AT&T was a  monopoly, and when its monopoly power was removed, it struggled.

Facebook is a monopoly. They’ve become so massive that you can’t escape their data collection system. They’ve bought any company that seems as if it might become competitive. They aren’t “winning” because they have a better product; they’re doing so because we don’t really have a choice or because they’ve cheated. Facebook bases its business model on anti-consumer behavior and, frankly, lying. They lied to publishers. They lied to video creators.  They lied to the government about data collection and the role they played in spreading misinformation and propaganda while accepting money to do so. They’ve lied to you. Think about the number of times you’ve read about some horrible thing the company has done only to promise it won’t happen again and they’ll be better. Until the next time.

Germany just did something that could show us the way. Germany’s antitrust regulator has told Facebook it must stop forcing users to allow it to collect and combine their data from sources outside Facebook. Among such sources are Facebook-owned apps like WhatsApp and Instagram as well as third-party websites that include Facebook features like the “share” button. Since Facebook derives 99% of its revenue from advertising based on that data collection, this is a great first step.

The last straw from me was the realization that Facebook is monetizing data from people who don’t even have a Facebook account. When people navigate around the internet, sites that use Facebook’s advertising pixel or other social APIs linking back to Facebook (like the “Like” button) send data about those site visits back to Facebook. Facebook collects that data on everyone who visits these sites, whether they’re a registered user or not. You might not be on Facebook but that doesn’t stop them from selling your data. It’s also why any ad-based digital publishing business is probably going to have to survive on crumbs since Facebook scarfs up most of the ad dollars since they have most of the data. Yes, I know Google grabs just as much but it’s a different business model. Search isn’t display.

Break up Facebook. The digital world needs its walls to crumble so that new businesses – better and more ethical businesses – can survive. Start by breaking off Instagram and What’s App. Don’t let them make any new acquisitions of competitors. That’s where I’d begin. You?

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Taking The Beaten Path

One of the questions that has come up often in my newish role as a franchise consultant has been why one should look to invest in a franchise to begin with rather than starting a business from scratch. After all, there are generally fairly substantial franchise fees associated with a franchise along with the other expenses one might expect when starting a business plus you usually have on-going royalties. You’ll still have to pay to incorporate, you still often need insurance, licenses, equipment, space, and people. Why incur the extra fees on top of the ordinary expenses? It’s a good question and I have what I think are some good answers. If you’re thinking of starting a business or maybe changing the nature of the business you’re running, here are my thoughts.

First, the biggest advantage of buying into a franchise is that it’s a business in a box. It’s a proven business model, one that comes with built-in support. Almost every franchise I work with has some form of training and on-going mentoring. I think about that in terms of the businesses that have hired me to consult in the past. Much of what I did would have been covered by that sort of support, negating the need for an outside consultant. The franchise will have research and the business results of all the other franchisees. That’s invaluable and beats the heck out of going it alone.

Another consequence of that is you’ll probably experience much faster growth. You won’t be spending time formulating a business plan. Instead, you’ll be getting trained and executing one that has been time-tested. Something as simple as logo design, which can take time and several iterations, is not really a concern. You’ll generally be presented with operations manuals and marketing materials. Your time to market is greatly decreased.

One thing that is much easier is financing your business. Franchises are less risky in lenders’ minds since they’re known brands and proven businesses. While banks aren’t the best source for franchise ending, there are many lenders who specialize in that (I work with 6 of them) and SBA loans are easier to come by as well. Finally, your potential customers will already know who you are. Most franchises have good brand recognition, and even those that don’t have a current local presence can often benefit from being seen as part of a bigger entity.

The Bureau of Labor Statistics says that roughly 1 in 5 of all businesses in the U.S. close after the first two years of operation and a little over a third shut their doors after four years. You can beat those odds by taking the beaten path and investing the franchise fee to gain the above benefits. In my mind, and why I added this to my consulting portfolio, that investment yields as good or better returns than blazing your own new trail. What do you think?

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Stew

It’s nearly 80 degrees here on this Foodie Friday and one might think that winter is gone. Not so fast – it will be in the mid-40’s tomorrow so we’re not yet past stew weather. Stews are a winter staple and since there are endless variations of them, one can’t really get bored with making them.

Some folks think of stews as a thick soup but I think that vastly underrates the dish. I wouldn’t serve soup over noodles or mashed potatoes, would you? As it turns out, they teach us a bit about managing too.

One thing that’s great about stews is that the longer they sit, the better they get as long as you don’t raise the temperature too far. You need to choose your protein – generally meat – wisely. You want the inexpensive cuts that really aren’t good for much else since they contain a lot of connective tissue. They require lengthy cooking (pressure cooking excepted) so that tissue can break down and the meat can transform into tender loveliness.

The meat needs to be seared properly. That means you can’t overload your pan or the meat with steam and not brown. You don’t want to put too much flour on the meat or into the stew to help thicken it or you end up with a gloppy mess. Let the collagen from the meat do its job. If you need more thickening, use gelatin (look it up!) which does the job without changing the flavor or adding lumps.

So why is this appropriate for our business blog? Your team is your stew. You need to find the right ingredients, which are often the overlooked cuts. The best stew meat comes from the muscles that do a lot of work but need help in transforming into dinner greatness. Dig deeper for people, especially the ones who’ve been working hard but maybe not getting the recognition they deserve. You need a sturdy pot that can hold the heat. That, dear readers, is often you, the leader of the team. Great stews have lots of individual components, each of which needs to be added at the right time or it will get mushy. This speaks to the need to pay attention to the individuals on your team to bring out the best in each of them. Pull things together, apply some gentle heat, and give it time. Your team is a magnificent stew!

Here is a list of stews. It is quite varied, but the dishes have a lot in common while still being quite distinctive. Your stew – your team – will be too. Go out and pull it together.

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Five Feet From Where?

If you’ve been reading the screed on a regular basis of late, you know that my recent experience of purchasing and moving into a new home has provided wonderful fodder for my rants. Today will continue the trend.

One thing that I asked the builder to do as part of the deal was to put up a five-foot fence in the back yard. He agreed and yet another adventure in communication began. It dawned on me as this adventure progressed that there is a great business point contained within.

I live in a community that has an HOA – a homeowner’s association. I’d never lived with one before and so wasn’t really used to the fact that most of the people living in “neighborhoods” down here live with the fact that a board can tell them everything from what color they can paint their home to the type of trees they can plant to the type and height of the fences they can erect and where. To build my fence, I needed HOA approval, and that’s when the fun started. I couldn’t get that approval until I actually owned the home. Until then, the developer’s regulations applied, meaning the fence could only extend five feet from the side of the house and be no more than four feet high. I wanted to live with the HOA rule of the fence being five feet from the property line, not from the house, which in my case meant it would extend an extra eight feet from the house. I also wanted the HOA to approve a five-foot-high fence. You with me so far?

The builder was happy to put up the fence but he would have to do so within the builder regulations unless I wanted to wait almost 2 months, the time it would take to close on the house and go through the HOA approval process. I won’t bore you with the details, but I managed to get the approval much faster (it helps to have golf buddies with good connections). The fence was going up as of last Friday and should be done by Monday, move-in day.

I drove by the new house on Friday and sure enough, the five foot high posts were in the ground, exactly five feet from the house and NOT from the property line. Despite many emails and calls back and forth, somehow the point of the delay – to get a variance to get five feet from the property line and not from the house – was lost even though the message about extra height got through. The fence company was told five feet from the house and they were not happy when they got the call to reset all the posts. Of course, there were also emails asking for proof that the variance had been granted (they’d received the copies several weeks before). As of right now, I’m looking at posts five feet high sitting five feet from the property line (and 13 feet from the house) awaiting the rails and pickets to be attached, hopefully, today or tomorrow.

What’s the business point? No matter what you think you’re communicating to someone, it’s always a good idea to review it again, especially when it involves something that’s not easily undone. Have the person repeat the instructions back to you. Make sure that nothing was lost in the communication. In my case, “five feet” wasn’t the issue. Five feet from where certainly was and that’s what got lost somehow. Good teams are all built around great communication. So are good partnerships and great customer service.

Frost wrote Something there is that doesn’t love a wall. Apparently, that something is unclear instruction and faulty communication, right?

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The One True Holiday

It’s Foodie Friday and it’s the eve of the annual national holiday called the Super Bowl. It’s America’s only true national holiday in my book. Oh sure – most Americans celebrate Memorial Day, July 4th, Labor Day and Veteran’s Day and even Thanksgiving, but none of those have the vast majority of the country focused on exactly the same thing at the same time. Only the Super Bowl does that.

Along with the game goes the food. Or, rather, THE FOOD, since inevitably there is a lot of it. Even those years in which I’ve watched the game by myself rather than at a party or a bar, I’ve managed to have copious amounts of generally not very healthy food by my side. Try to find a food site without a Super Bowl menu on it. Try to find a bar or a non-fine dining place that isn’t throwing a party.

Here was my take 8 years ago. Nothing has changed off the field (we won’t go into how the on-field experience has changed):

The Super Bowl is unlike any other sporting event from just about any perspective.  It’s watched by more people and is even covered by media people who wouldn’t know an H-back from Preparation H.  Hundreds of marketers, both authorized and unauthorized, try to tie in with “The Big Game” (for you ambushers) whether they’re selling food, TV’s, or anything else along the durable to non-durable scale.

So what do you do as a marketer? Do you try and fight city hall and run your own campaign not related to The Big Game? Do you pay the NFL’s or the broadcaster’s price tag (if your category is available) and use the marks or even just buy TV time in or around the game? Do you just stay quiet and begin your Valentine’s Day promotion after the game?

Tough question. If you’re in the food business, Super Bowl Sunday is one of the most popular takeout days of the year (1 in 7 Americans order takeout food for the game!). A third of Americans consume some sort of dip. Are you staffed properly if you’re a restaurant? Have you ordered extra dip and sour cream if you’re a market? If you’re not a food business, you need to account for this holiday – especially this holiday – in your marketing and content plans. Unlike any other sports championship, people watch The Super Bowl even when they don’t have a favorite team playing. They actually watch the ads. They generally participate in word of mouth and social media conversations. It is America’s holiday and if you market behind the others, maybe you need, as it says on many pizza boxes, to try the best since you’ve tried the rest. Make sense?

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Lucky Or Good

I have a rant for you today and I’m going to say upfront that it is not political in nature although as you read it you might think that it’s my intention to make it so.

One of the things I’ve noticed in business is that we tend to put people who are rich or successful (and usually both) on a pedestal. We assume that they know a heck of a lot more than we do because they are rich or successful. We listen to them give speeches and prognosticate on business and the world. The reality is that more often than not they’re more the beneficiaries of “right place, right time” than they are smart.

You think I’m exaggerating? Let’s take a few examples in tech. The founders of Google at one time said they’d never take ads because it might throw in to question the purity of their search results. It took a non-founder, a person you probably have never heard of, to convince them that great computer science is one thing but running a business that has investors is quite another. Advertising is what makes Google profitable. Are the founders smart or lucky?

Think of all of Google’s products or Facebook’s for that matter. Besides the “core” product, what have they invented that demonstrate that they’re not just a one-trick pony? YouTube? Instagram? What’s App? Sorry, all acquisitions. Most of the features or products they have were created elsewhere and either bought or copied. Think about how many failed products or features those companies have produced. I’d suggest that they, like many in tech, we much luckier than they were good and yet we venerate many of them as if they were Einstein.

Then there are those in business who were born on third base. These are the ones who came from money and often are working in a family business. The positions they’re in can command respect but unlike those people who advance into those positions via hard work and demonstrating talent, these folks are often unsuited for jobs several levels below where they are. I’ve encountered several of them in my career and did my best to avoid them in business dealings.

Would I rather be lucky than good? I often say exactly that, mostly after a wayward golf shot hits something and ricochets back into a good spot. Studies have shown that we can create luck by being extroverted, observant, and positive It also helps to have perfect timing as many of those who got rich in the early internet days did. The really smart ones got out, recognizing that when a rogue wave throws you out of the ocean rather than drowning you, use the dry land to run away.

This isn’t prompted by anything other than a two-hour car drive which afforded me some time to think. I’ve been both lucky and, I think, pretty good. Life isn’t a zero sum game and I don’t begrudge these charlatans their success. I do, however, wish some of them would stop confusing their success or the jobs they hold with who they are as people and what skills they possess. Hopefully, none of us are doing that, right?

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Filed under Reality checks, Thinking Aloud