Category Archives: Consulting

May 20, 2016 · 8:49 am

Bringing The Heat

This Foodie Friday, let’s bring the heat.  Specifically, let’s talk about hot peppers.  Many people, myself included, enjoy spicy food.  The problem with cooking food that brings the heat is that what’s hot to me might not be hot enough for you.  Now that I think of it, the opposite is nearly always true – if I’m happy with the heat in a dish, chances are most of the folks for whom I’m cooking are going to find it hard to eat and enjoy.

This image shows a Habanero chile, which is th...

(Photo credit: Wikipedia)

This article from First We Feast summarized it nicely:

A 2013Technomic study showed that 54% of Americans prefer spicy sauces and dips—a number that was and likely still is increasing rapidly. Unlike so many other taste preferences, though, the growth of spice brings with it a prickly issue: How much heat can your tongue handle?

As it turns out research shows that tolerance to hot food is both genetic and a learned habit – you can train yourself to eat hotter food if you’re willing to go through the pain of doing so, and some folks have a head start based on genetics.  “Hot” or “Spicy” is really a subjective term even though a measurement standard exists that make it really easy to tell how much heat is in a dish. Scientists can measure Scoville units to determine how the capsaicin in a pepper or a dish registers as heat.  It’s an objective standard.  Which brings us to the business point today.

Too many of us rely on gut feel – how we perceive things to be – rather than an objective standard.  What seems fine to us might be intolerable to our customers. There is little in business that we can or should do without measuring, even if we can’t test in advance.  That’s not to say that we never should put things out there based on our own tastes, but we need to listen carefully to feedback and be prepared to adjust the seasoning.  It’s fine to bring the heat in any product or business, but let’s remember that some folks can’t stand any heat and will go running from our kitchens if we’re not paying attention.

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May 19, 2016 · 10:51 am

Publisher : Cavete

Sometimes I look at what’s going on in publishing as if someone was whispering the Springsteen lyric in management’s ear:

Those romantic young boys, they’re callin’ through the window
Hey, Spanish Johnny, you want to make a little easy money tonight?

The easy money comes from native advertising, particularly the kind that’s plug and play. Just as in the song, however, there isn’t any easy money that comes without strings attached and some research from Penn State found out just what those strings entail.

The research team found that when content was identified as native advertising, readers held a lower opinion of the media outlet it was published in. However, the reputation of the company being promoted was not affected…“We all have the idea that the news media should be objective and neutral…that’s how it works,” Wu said. “But people may see the media and companies working together to deceive us…so they change their perception toward the media more dramatically. On the other hand, people see that the company is just doing what it’s supposed to, promoting itself.”

The speaker in the quote above is the PhD student who conducted the study. While I certainly understand the importance of revenue generation in an increasingly competitive and difficult marketplace, I also understand the value of a publisher’s reputation. That reputation, like all of ours, takes a long time to establish but can be shattered rather quickly. The loss of trust is fatal for any brand and particularly so for an information service.

Maybe it’s called “native content” or maybe it’s actually identified as “sponsored content” or a “promoted post.”  Either way, it’s generally not immediately identifiable as being from a source different from the main news or information the publisher puts out.  I think most of us dislike being enticed to read something under false pretenses, and part of the decision to invest time in reading involves the quality of the content which is predicated on the source.  When we’re deceived, we’re unhappy, and when we’re unhappy, we don’t return.

Publishers need to beware.  There is no easy money to be made unless you’re in it for the short term and are reputation-agnostic.  Are you?

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May 16, 2016 · 10:15 am

The Buying Opportunity

A large investor sold a big block of Apple shares this morning and that was a big enough deal that it made my news stream. He feels that the stock is overvalued and that Apple is having some product issues as well as being too dependent on China. It’s on the heels of Carl Ichan dumping his huge stake in the company a couple of weeks ago. That could be although it’s not really our topic this morning. Instead, think about how the stock market works. You can’t sell a stock unless someone wishes to purchase it from you (or the company decides to buy back its own shares). The real question at that point is price, although there are other factors at play as well.

When I got out of college I was fortunate enough to have an older friend who was a very smart investor. He told me to read the Graham and Dodd classic book called Security Analysis and to live by what the book said when it came to investing. As it turns out, Warren Buffett was giving out the same advice (he’s done pretty well by its principles, wouldn’t you say?). I have this on my mind because I spend a lot of time consulting with start-up companies, most of whom are out trying to raise investment. Graham differentiated between investment and speculation, the former “promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.” Part of what I work on with these companies is helping them become the former – good investments – and not speculative, although it’s fair to say that most start-ups contain some elements of speculation since they don’t really have long track records.

Back to Apple.  No one would consider Apple a speculative investment and yet someone who is supposed to be sophisticated in the ways of the market has determined that it no longer meets his valuation and that this was the time to sell before the value declined further. Another investor decided that the price is low enough to purchase shares worth over a $1 billion. That’s our point today.  First, whatever we do in business must be able to be seen through the lens of value.  Second, we shouldn’t allow one person’s assessment of the value – expressed as what they’re willing to pay for your product or service – be thought of as gospel.  For every seller – every person who thinks you’re overpriced – there is probably a buyer – someone who sees the value in what you’re doing as well as the upside at the same price.  That applies not just to buying a stake in your company but in purchasing your products or services  as well.  Make sense?

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