Tag Archives: Business and Economy

May 24, 2016 · 10:14 am

Kicking The Curb

The government is one of everyone’s favorite punching bags. It really doesn’t matter where on the political spectrum you fall. The government is the target of an angry rant and/or much headshaking at some point. Today’s topic is a great example of that and it’s instructive to business as well. No, I haven’t reconsidered my self-imposed ban on politics in this space. This has nothing to do with politics and a lot to do with things such as management, customer service, and accountability.

English: A flat automobile tire. Français : Un...

(Photo credit: Wikipedia)

The town in which I live just installed new curbs on Main Street. The new curbs, which meet federal and state standards, are made of granite for their durability (lots of salt and snow plows on the roads here in New England). They also have really sharp edges which, as documented in this article from a local blog shows, have been shredding tires. No, driving on the curb isn’t normal here, but parallel parking is, and apparently there have been many cases of the curbs cutting down tires as the tires bump into them.  The government’s response?

The granite curbs used on Main Street are the same material and construction that is used throughout Connecticut and meets state and federal specifications.  Because it is cut stone it does have a sharper edge than asphalt or concrete. It is a chosen material because of it hardness and resilience to salt. It can stand up to New England winters with routine snow plowing and application of salt. The curb is not intended to be driven upon and will not damage a tire on routine contact.

In other words, not my problem.  We’re following the rules and despite the fact that the rules have caused the citizens (read customers) whom we serve to suffer flat tires, it’s your fault.  Quit hitting the curb. Rather than thinking about how to round the edges and to solve the problem, the government official is thinking about how to blame the victim.

You might be shaking your head about this (as you should) but business does the same thing. Rather than fixing customer problems we look to shift blame.  We do things such as ask customers to sign lengthy agreements written in legalese in which they waive rights.  We impose hidden fees which are only clearly disclosed when someone complains. I can’t wait to hear the Downtown Merchants Association (a local business group), who will lose business as customers choose other places to park (and shop) weigh in on the topic of how the nicer new curbs have “helped” make downtown more attractive to business.

I happen to believe there is a valuable role for government to play in our lives (so do you every time you call a cop or report a fire or drive on a road). I don’t think there is a place for any business – government included – to ignore its customers nor to leave obvious problems unsolved.  You?

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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 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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