Monthly Archives: February 2017

Foaming At the Mouth

This Foodie Friday, let’s talk about foams for a minute. Food foams, that is, and not the thick ones such as whipped cream, marshmallows, or even cake. I mean the foams that have come out of molecular gastronomy and are made out of mushrooms or parmesan cheese or just about anything else. Throw some stabilizing agent (agar, lecithin,etc.) into a liquid, grab the old immersion blender and voila: foam.

Let me give you two prominent cooks takes on them. The first is Gordon Ramsay:

If I want foam I will stick to my bubble bath after the end of a long week. Watching foam sit on a plate and 30 seconds later it starts to disintegrate and it starts to look like toxic scum on a stagnant pool of crap. I don’t want to eat foams. It’s not good.

Then there is Alton Brown‘s take:

Don’t think you can replace cooking technique with throwing a bunch of flavors on top of something. Any more than you can making it into a caviar. Or making it into a foam. If I live the rest of my culinary life without a seeing another foam, I’ll be OK. I’m sick to death of foam. What does foam do? Cover our bad cooking, by and large.

I must admit that I’m not particularly a fan of foams on my plate but I find the above two quotes of interest to us today because each also contains a business point. Chef Ramsay rightfully points out that when customers purchase a product they expect it to perform and endure. If you have kids, you know the experience of toys being destroyed by lunch time on Christmas. It’s almost as if the toy makers never put the thing into the hands of a 4-year-old to test endurance. But many of us have had the same experience with tech toys and other products. We need to build our products and services to last.

The second quote points out that customers aren’t easily distracted. A nicely flavored foam can’t hide a poorly cooked protein underneath it. It’s great that we design digital products and physical products to look nice but consumers value substance over style in the long run. Just as diners order the protein and not the foam, consumers are focused on the main promise the product is making and not on how pretty it is.

Foams add flavor without adding substance. I think we all need a lot more substance in this world. You?

Leave a comment

Filed under food, Thinking Aloud

Innovating On Top Of Imitating

Let’s start today with something written by someone significantly smarter about business than yours truly:

In spite of the extraordinary outpouring of totally and partially new products and new ways of doing things that we are witnessing today, by far the greatest flow of newness is not innovation at all. Rather, it is imitation. A simple look around us will, I think, quickly show that imitation is not only more abundant than innovation, but actually a much more prevalent road to business growth and profits.

Right? That wasn’t written recently, however. It’s from a piece written in 1966 for The Harvard Business Review by Theodore Levitt. If you’re a businessperson and you don’t know who he is you might want to do a little research. His classic piece Marketing Myopia has been one of the foundations upon which I base my business thinking. It argues that businesses will do better in the end if they concentrate on meeting customers’ needs rather than on selling products. Amen.

That’s not our topic today, however. What caught my eye was a piece about how What’sApp was imitating Snapchat‘s disappearing content feature that lets users share photos, videos, and GIFs that disappear after 24 hours. You might be aware that Instagram – also owned by Facebook – did the same copying last summer with Stories. Facebook itself is doing the same thing. In Snapchat it seems as if we have a company who innovates beautifully but does so in a way that simply blazes a trail that others follow shortly thereafter. Facebook, in this case, is the imitator. Apple is a classic imitator. They will let others innovate and learn from the success or failure of those innovations, refining them and making them better. One could argue that for a while, the entire Japanese manufacturing economy was based on that principle – innovative imitation.

As Professor Levitt wrote, there is nothing wrong with that. While every company needs to do some innovating, “no single company can afford even to try to be first in everything in its field. The costs are too great; and imagination, energy, and management know-how are too evenly distributed within industries.” The question for any of us is when do we need to dig deep and innovate vs. when should we be looking to what others are doing nicely and make it better? You might surprise yourself if you can put your business ego aside and focus on solving customers’ problems better than anyone else can, even if it’s just by doing innovating on top of imitating someone else. Clear?

Leave a comment

Filed under Consulting

It Just Works

I’m old enough and digital enough to have used the first IBM PC and VisiCalc. It wasn’t the easiest thing to use but it pretty much was the only thing. DOS led to other operating systems, primarily Windows, that enabled all of us to work more efficiently. Well, that is, unless we were busy figuring out why we couldn’t print or why we were suddenly deluged with pop-up ads via malware.

English: IBM Personal Computer model 5150 with...

(Photo credit: Wikipedia)

That was always the biggest appeal of Apple products to me. They just worked. My primary computer is a MacBook Air and the thought of going back to a Windows environment, no matter how good the reviews are on Windows 10, is dismaying. I’ve had to help friends with their Win10 issues and it certainly doesn’t “just work.” Then again, neither does my MacBook any longer. Sure, it’s nice that the OS upgrades every year (for free!) but I find myself diagnosing problems constantly now (wifi drops, SD cards being ejected at random, and more!).

My next computer will be a Chromebook; specifically a Chromebook with a touchscreen that can serve as a tablet. Chromebooks do just work. They are malware free. Think about how you work now. Most of it is probably via a web browser and in the cloud – my work certainly is for the most part. And they’re inexpensive – I can buy two decent Chromebooks for the price of a new MacBook or a touchscreen Windows machine. But what does this have to do with your business?

The bulk of customers wants that “it just works” experience no matter what you’re selling. They want their problems solved with the least hassle and for the best value. Notice I didn’t say for the lowest price. Just as there are high-end Chromebooks costing more than some Apple computers, so too is there a segment of buyer that want the high-end product and can afford to pay more if they perceive better quality, better service, or maybe a boost to their self-esteem (think luxury cars). But that’s not everyone.

If you want to brag about your computer’s specs then Chromebooks probably aren’t for you. Honestly, they’re not for everyone – you can’t do serious gaming or Photoshop or video editing. If you’re the type that likes to tweak your settings until they’re just right, you probably want to stick with something else. You need to think about your business in this context too. Are you for some very specialized, narrow audiences or are you for the bulk of the consumer base? If the latter, I’d suggest you focus on the “it just works” experience because history shows that’s how the best businesses succeed. You with me?

Leave a comment

Filed under Consulting, Helpful Hints, Thinking Aloud

There’s A Little Cafe…

Foodie Friday and we’re heading overseas this morning. To Vienna, specifically, where, as The Boss wrote about San Diego, “there’s a little cafe.” Now I don’t know if they “play guitars all night and all day” but I do know one thing they do. They charge customers who plug in their phones or laptops to recharge them. As the Reuters article on this quoted the owner:

Austria, Vienna, Hundertwasserhaus

Hundertwasserhaus (Photo credit: Wikipedia)

“Tourists – always electricity, electricity, electricity. Sorry but who is going to pay me for it?” said Pokorny, owner of the Terrassencafe in Hundertwasserhaus – located inside a colorful patchwork of apartments designed by artist and architect Friedensreich Hundertwasser. Customers who charge up during a 15-minute coffee can still do so for free, she said. An hour, however, is beyond the pale.

On the surface, a reasonable business practice, right? Electricity costs money, and if each of the outlets is in use most of the day incurring costs that aren’t built into the charge for the coffee, it seems reasonable to pass those costs on to the customers who incur them, right? Maybe, except for a couple of things.

First, someone figured out that it costs about $.84 (that’s 84 cents) to charge a smartphone for a year. That’s using an overnight charge but one can assume timewise that’s comparable to an outlet being in use for a full day. This cafe is charging customers 1 Euro (which is about $1.06 at the moment) if they plug in for more than 15 minutes. In other words, this is more of a profit center than the owner is letting on.

Put that aside. It not customer friendly. Cafe culture in Europe is about sitting and enjoying, not about grabbing a coffee to go. This owner knows that – she offers free wifi. Is it not part of the same welcoming, customer-centric mindset to offer free electricity as well? If your customers are sitting and enjoying, is it unreasonable for them to plug in and charge up while using the free wifi you offer?

I wrote earlier this week about misleading statements in marketing materials. Offering free wifi and charging for electricity feels as if it’s the same type of insult to your customer. Unless this cafe’s coffee is a cut above anything else nearby (and there is almost always decent coffee nearby in Europe), they’re being extremely short-sighted. If the coffee is that good, raise the price a few pennies to cover the cost of whatever electricity seems to be used. Don’t insult your customers by sending mixed messages or by nickel and diming them.

Leave a comment

Filed under food, Huh?

Unlimited Gall

You might be aware of the battle going on in the wireless provider space which revolves around “unlimited” service. Yes, I meant to put unlimited in quotes because as it turns out there is no such thing. I’ll explain the details in a second but what this represents is mirrored in other businesses too and is a ridiculous bit of anti-customer behavior in which none of us should engage. Let’s see what you think.

First, the phone war. Verizon and T-Mobile are the primary protagonists. Verizon announced it was bringing back unlimited data so you could stream video on your mobile device to your heart’s content. Of course, as one article reminded us, unlimited is actually not:

“Unlimited” data also continues to be a misnomer. If you use more than 22GB of data, Verizon may throttle your connection. You also only get the $80/month price if you sign up for Autopay. If you don’t, it will cost $85/month. While this includes the $20 fee for adding a line, it doesn’t include your phone’s payment plan, so if you want to pay monthly to buy a phone, it will cost more.

T-Mobile responded with changes to their own so-called unlimited data plan. While the plan was unlimited previously, it added on charges for video quality over 480p (that’s not great). It also charged you extra to use your phone as a high-speed (meaning 3G quality) hotspot. It slowed the data down before. In the new plan, those limits are gone but T-Mobile says subscribers who use more than 28GB of data in a given month may see their speeds reduced due to “prioritization” in congested areas. In short, using the word “unlimited” is crap. There are still limits, and if you’re a consumer you have the right to expect that there really aren’t.

The phone companies (and Sprint and AT&T aren’t much better) aren’t the only businesses that do a form of bait and switch. It’s no secret that what you’re quoted as an airfare is also only part of the story since there are fees for bags, boarding passes, seats, and just about anything else depending on your carrier. The airlines say the fees are optional. Yeah, sure. And pay the fee at the airport and there is a fee to pay the fee!

Ever buy tickets to a show online? Convenience (whose convenience?) fees, printing fees, etc. Ever book a hotel room? Resort fees, safe fees, service fees, and more. My bank charges my business account a monthly admin fee even though they make money off the money I have in the bank. My cable operator charges me for sports channels I can’t refuse to take.

All of this is a long-winded way of saying that businesses need to be upfront about their true costs to consumers or face a backlash when their dishonesty is discovered. I’d much rather know the true cost of something than to feel as if I’d been ripped off later. Wouldn’t you? Isn’t that how we need to treat our customers?

Leave a comment

Filed under Huh?, Reality checks, Thinking Aloud

Contacts, Cost, and Value

A few months ago I installed a contact manager app on my phone. I was quite pleased with it; so much so that I also installed a desktop version of the software on my Mac. As you might gather from some of the stuff about which I rant here on the screed, I read fine print pretty carefully. When I did these installs there was no mention of a trial period nor a limit on the number of contacts. It was quite clear that the version I was using had a premium option with more features, but I was just fine with the basics I was getting for free.

Last week, after a few months of use, I got a message when I opened the app that I would have to upgrade since I had over 1,000 contacts. In fact, I have 2,325 and have had that many for nearly all of the time I’ve used the app. The app no longer performs the free basic stuff it did before. The premium version is $100. Per year. No thanks.

I checked out some other contact apps. Some are also $100 a year, some are $100 once, and some are $2. Based on reviews, there doesn’t seem to be a huge difference between many of them; certainly not a factor of 50 or 100 times with respect to usefulness. Putting aside my anger at my previous app’s misleading and dishonest app store copy which makes no mention of a contact limit, I started to think about one of the most basic business ratios: the cost/value relationship.

Customers assign value based on the benefit they receive – how well you solve their problem – in the context of what it costs them for the solution. Warren Buffett explained it as price being what you pay and value is what you get. Any of us in business need to do that in the context of what other solutions are available and what they charge. A new Lexus and a used Volkswagen but solve the transportation problem but they are only comparable solutions on the most basic level (they both get you from point A to point B). The mistake many of us make is that we look at our unique benefit from our own perspective rather than that of our potential buyer. While we may see the multitude of features our product or service provides, most customers don’t. They see a price tag, first and foremost, and while they might love to have the Lexus they aren’t willing to assign a sufficient enough value differential to the great customer service, the luxurious interior, or the better ride and handling to make up for the large price difference.

I’ll find another contact manager. I don’t even mind paying for one. Like most consumers, I do mind the bait and switch that happened here (and I’ll post a review to that effect in the store). Whatever value we believe justifies the cost we ask customers to incur, we need to be upfront about it as we try to justify the reasons why we’re worth it. Make sense?

Leave a comment

Filed under Consulting, Helpful Hints

Eating At The Buffet

Our topic this Foodie Friday is buffets. Las Vegas is renowned for the lavish and enormous buffets but they can be found almost anywhere across this great land of ours. There are dedicated buffet restaurants, most hotels offer a buffet option for breakfast and many bbq joints offer something similar so you needn’t choose between the 4 or 5 varieties of meat and the 7 or 8 sides they serve. Grab a plate, pile it high, and it’s on!

A Chinese buffet restaurant in the United Stat...

(Photo credit: Wikipedia)

One could make the argument that a traditional dim sum place is a buffet in reverse. Instead of you going to fill your plate from a variety of choices, the variety of choices are wheeled out to you and you choose as they go by. I don’t put salad bars into the buffet category since by definition they have a more limited focus.

My buffet strategy is to skip the “normal” foods (corn, mashed potatoes, cold cuts, etc.) and to focus on the more indigenous specialty items. I don’t want to fill up on food I could get anywhere while missing whatever makes this experience unique. After all, while I have a healthy appetite, I can’t eat everything, right?

That’s business point today. I remind many of my clients that they need to “step away from the buffet.” When you are a growing company and you have a smart, visionary leadership team, there is a tendency to want to try everything on the buffet table. In business, that means chasing down every apparent opportunity in an effort to grow. The reality is that no early- or mid-stage business can afford to do that. Resources are too precious and the time to get to profitability is ticking away. Stepping away from the buffet means having a business plan that’s focused on whatever problem it is that the business is solving for your market segment and sticking to it. Don’t take that to mean that you can’t adjust based on what you’ve discovering on your journey:  you must! But you also can’t keep changing direction as you spot another new hot plate being added to the buffet.

Like a large buffet, business can present an overwhelming number of choices. Our job as managers is to find the best of those choices that align with our business goals. It’s one thing to overeat at breakfast. It’s quite another to run out of resources before reaching sustained profitability. Step away from that buffet!

Leave a comment

Filed under Consulting