Category Archives: Reality checks

Fins

I was listening to a podcast and someone used an analogy that resonated with me.

English: Apparently a 1960 Plymouth Fury, seen...

(Photo credit: Wikipedia)

They likened a new product to what the car companies did when they really didn’t have any new innovations to add to a new model so they added fins. The fins didn’t do anything but they gave the car a new look and made all the old cars look…old!

I suppose every business that produces ongoing lines of product – phone manufacturers, cars companies, TV makers, etc. – are under a fair amount of pressure to add features constantly so you’ll feel the need to update a perfectly good item for a newer model.  After all, if we used many products to the end of their useful lives, the economy would probably be in much worse shape.  I’m not sure, however, that simply “adding fins” in the figurative sense is the best route for most businesses.

If you’re going to produce something new, make it something new.  If the new stuff is not a reason to buy the product – and in my mind “fins” don’t do it – they need to make the product demonstrably better.  It should be something users will employ on a regular basis, and preferably they’re something unique.  Adding, say, a soda can cool zone to a car doesn’t, in my mind, fit the bill (yes, that’s a real thing).  Adding dozens of new features to Word, which Microsoft is notorious for doing, that 99% of users won’t use and are just clutter and confusion for a huge percentage is self-defeating.  In many ways, phone manufacturers are the worst.

I love to buy new stuff.  I won’t buy it, however, just for the sake of doing so.  I suspect most consumers think as I do.  I’m waiting for the day when the press release comes out saying “there’s nothing new this year – we made a great product that we hope you bought and we’re committed to making it better.  We’ll let you know when it really is.”  I’m buying the new model of whatever that is the day it’s released.  I won’t be buying something because the release reads “and now with fins!”

You?

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Cronuts

An unlikely source for our Foodie Friday Fun this week – the folks over at Freakonomics. I’m a big fan of both the books and the podcast because their whole schtick is looking at things very differently albeit from an economic point of view.  Today it’s the cronut, an invention by a NYC baker which is a cross between a doughnut and a croissant. As Freakonomics reports:

Cronuts are so popular that lines form at 6 a.m. — 2 hours before the shop opens — and Ansel runs out within minutes. Thanks to the wonders of the Internet (and Craigslist) there is even a cronut black market, with unauthorized cronut scalpers charging up to $40 apiece for home delivery (a mark up of 700%). And of course there are cronut knockoffs appearing all over the world. Ansel has even trademarked the name “cronut.”

So here we have an interesting and, hopefully, common problem – you do invent a better mousetrap although once it’s out there it’s not particularly hard to duplicate.  You can try to protect it via patents or trademarks but the former is costly (and the laws are changing) and the latter is hard to protect for something such as this.  Why?  Because it is almost a “generic” term such as Kleenex or Xerox (tissues and copying, respectively).  The article has a great overview of the laws involved if you’re interested.  So what can you do?

In two words, be better.  Two more:  be smarter.  You are, after, the original, and that’s an edge – sort of like what distinguishes the official sports league websites from all the other sports sites that are out there (scores and stats are commodity content, after all).  People like that – getting the original as long as the original lives up to its reputation (anyone think Hyrdox are better than Oreo’s?  Seriously?).  The inventor has a head start and it’s a small business.  Why blow the profits on enforcing the potentially unenforceable hundreds of miles away from your base of operation?  We don’t take the time often enough to think about the real value behind an argument made in principle.  What fees might come in from licensing the name to a bakery in LA?  What might it cost to get those fees?

I’ve never had a cronut.  I might even break my general eating habits to try one next time I’m in NYC (assuming I can get one).  What I won’t do – and what you shouldn’t either – is sacrifice smart business thinking over some grandiose idea.  Be better, be smarter, and you’ll reap the rewards.  You agree?

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Appearances Matter

I made myself a note to write about a common business situation that can cause a lot of grief if not handled in a smart manner.  Unfortunately, what prompted the note was a situation which was not handled the right way.  I’m talking about conflict of interest and how appearances really do matter.Dunce_cap_from_LOC_3c04163u

When I was in my corporate jobs from time to time I was offered “insider” pricing on some pending IPO‘s.  I was also invited to serve on advisory boards.  These offers came from start-up companies that were looking to do business with my employer and I was under no delusion that the offers were being extended because of my wit and charm or youthful good looks.  I hesitate to use the word “bribe” but I understood that it was possible someone looking at this might think that my loyalty might be by divided – business interest vs. self-interest.

What raises this is a report on a major ad agency CEO being granted stock options in a company that is a vendor to her agency.  These options might be worth as much at $3,000,000 if a planned IPO goes through.  Digiday makes the exact point:

In its S-1 filing, Tremor says any conflicts of interest related to Desmond are and will continue to be avoided because she’s “recused herself from all negotiations” with the company. While it’s unlikely Desmond regularly writes media plans for SMG’s clients, the fact remains she oversees a business that spends millions of dollars with a company she has a financial interest in.

I know from personal experience that even when your boss tells you to ignore his relationships with a vendor it’s hard when you know there’s a friendship or familial relationship.  When those relationships are more than personal friendships and extend into financial dealings, it’s impossible.

Appearances matter.  In this age, one can assume any relationship will come out and be widely known.  Any competitive vendor losing some of the agency’s business will have grounds to cry foul.  Tremor (the vendor involved) will have grounds to scream if the CEO (and now board member) doesn’t live up to her fiduciary responsibilities  It’s a bad, easily avoidable situation for everyone.  Hopefully you’re smarter than this.  Right?

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