Set Phasers to Stun

I didn’t watch the original run of Star Trek with William Shatner, Leonard Nimoy and crew, as I was just a bit too young. But in those days there were plenty of reruns and I watched each and every episode. Like so many people, it was clear that while the show was a bit campy, silly, and preachy, creator Gene Roddenberry was presenting his preferred vision of the future. While the characters were multi-racial and multi-ethnic (not to mention what Earthlings would call aliens in the crew), there was a decidedly American viewpoint to the entire series. See above for campy, silly and preachy.

The world of Star Trek was set in the year 2364 “and beyond”. The series depictions included a universe that was both at times beautiful and terrible. One of the things that always struck me as interesting was the choice that Captain Kirk made frequently to have his crew “Set Phasers to Stun” as opposed to kill. The characters had the choice to disobey but as far as I recall that NEVER happened. Talk about restraint!

What I also found interesting was that humans that were ‘stunned’ by Star Trek Phasers (yes I always wanted one of my own), never came back for vengeance against he (or she) who ‘stunned’ them. Clearly Mr. Roddenberry had a thing for creative license. And a more genteel future than what was going on in 1966 when the series was made. There was a whole lot of moralizing going on in Star Trek. And I loved it.

The year 2364 is 347 years from now. Putting on the rose-colored glasses for a moment, wouldn’t it be great to live in a world where people could defend themselves and immobilize personal threats, without ending someone else’s life? Unrealistic you say? Vengeance is a very strong emotion and restraint (in general) is something we human beings struggle with every day.

It disturbs me to think that somehow 347 years from now people will have available to them more powerful and capable weapons to carry around under the auspice of protecting themselves. Vaporizers are so clean and efficient. Aim, fire and poof – the threat is removed. No mess, no fuss. Impossible?

Could that really be our future?

 

 

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Why it’s more important now than ever to help build trust between U.S. and Chinese businesses

It’s not only because the leaders of the two countries are promoting Nationalist agendas. In the 3 years since I last visited China, Chinese President Xi Jinping has consolidated his power, which was further enhanced by his actions at the recent CCP Five Year Conference. Prior to Mr. Xi’s ascension there were indications of greater understanding between the United States and Chinese citizens. I don’t think that the citizens of both countries are more distrustful of one another. The same cannot be said of the two governments.

One cannot ignore that China is not only one of the oldest nations but also the most populated with something close to 1.4 billion people. I’d welcome the chance to return and see the people I have met and spent time with in China. I think they are not very different today from when I last saw them. Since currently the U.S and Chinese governments are less closely aligned, building cross-cultural trust and understanding through doing business between Americans and Chinese is probably just more difficult but also more important.

Chinese culture is still vastly different from U.S. culture. I am completely in favor of people interacting with one another in order to foster a better overall understanding. Doing business is one way to learn the ins and outs of another culture. Having traveled to China nearly a dozen times I’ve not seen enough of the country to form an opinion outside of the major cities I’ve visited. While some generalizations can be made for an American in doing business with Chinese, it’s important to judge each relationship on its own merit. That too can be more difficult to do than it is to say after you’ve consumed your 15th cup of tea of the day.

Our team has worked with a few Chinese companies over the years All the engagements were interesting in their own right and I think both sides learned in the process. None of the engagements were perfect. None were disasters. So why do I want to keep trying? After all there are not legions of Chinese companies looking to do business in the United States. But there are some with more to surely follow and I want to be there to help those that need a partner to represent their vision here in the U.S.

At the government level, trust between the U.S. and China is in scarce supply these days. There are reasons for this on both sides of the equation. I feel that citizens of one nation should not be lumped together in terms of behaving toward citizens of another nation on the basis of how their governments interact.

Learn, talk, do business, repeat the process. That’s how trust can be gained between Chinese and U.S. business partners.

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A lack of marketing is not helping digital editions

I ride a train to and from New York City most of the days of the month. It takes over an hour on the train itself. I make an effort to pass the time reading all sorts of things. I read newspapers in the morning, magazines and books on the way home. These days I read most everything on my iPad Mini. Actually I’ve used just about every tablet there is starting with the Amazon Original Kindle, to the Kindle Fire to a Samsung Galaxy Tab and more recently the iPad.

I thought about it this morning when I had a physical copies of two printed newspapers and went back in time folding and reading it in the special ways I learned having read newspapers riding crowded NYC subway cars for many years. Digital editions of newspapers are SO much better than the printed version. So why don’t publishers (and tablet manufacturers) promote the incredible utility and enhanced experience of reading content on a tablet?

It’s not that long ago that what was available in terms of a printed newspaper was outdated by the time you opened it, transferred printing ink all over your fingers (printing methods did improve and that problem mostly has gone away), and left out news that you may have heard about but occurred too late to be included in the printed edition.

Don’t mistake my championing digital editions as hating on newspapers. I wrote about the love I have for the Sunday New York Times. But on the train the actual printed paper, – well let’s just say it’s not user friendly.   Newspapers in general have been slow to figure out how to incorporate digital subscriptions and advertising into their businesses. However digital editions for The New York Times showed the growth of digital subscriptions. Digital revenues continue to rise and I’ve accepted that both the Times and Wall Street Journal will eventually cease to print a daily paper. Another interesting and well written article in FIPP https://www.fipp.com/news/opinion/are-digital-editions-dead offered its own view.

Nostalgic people will lament the end of a long era with the printed newspaper. Frankly I am surprised it has taken this long. The lack of marketing the advantages of digital editions has contributed to the slower adoption of tablet reading. Have you EVER seen anything that promotes reading on a tablet? There are plenty of promotions for Amazon and Netflix shows and subscriptions for a tablet.

In the recent past it might be said that it’s obvious that since newspapers (and magazines to a degree) still make more money from the printed editions than they do digital, why would they make the ‘sacrifice’? It turned out to be one word. Survival.

Yet publishers continue to eschew marketing the attributes of digital publications. It’s hard to believe that there aren’t more cooperative opportunities between say Amazon and various publishers. Or Apple. Or Samsung. Or Google. Or Microsoft.

The daily printed edition is nearing the end of its useful life. It’s a slow, sometimes painful death but doesn’t mean printed editions will go away. There will just be fewer of them and they will be more expensive. But you knew that already. Why don’t publishers do more to acknowledge this?

 

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Restaurants and dynamic pricing

Most people are quite familiar with the concept of dynamic pricing.  If you’ve ever bought a plane ticket or rented a car you know exactly the meaning of dynamic pricing, more demand, the higher the price, lower demand, a lower price. Sports teams have also embraced dynamic pricing by charging more for ‘premium games’ against top competition and for games played on the most popular days of the week.  Monday would not be one of those days for all but NFL football.  Broadway shows also engage in dynamic pricing for a good reason – they often have the data to help drive their pricing decisions.  

So why in general haven’t restaurants adopted dynamic pricing?  There are a number of possible reasons.  

  • Data is not available to accurately track and predict traffic.  Mom and Pop restaurants in particular.
  • Margins are so small already for most that offering a lower price simply eats up profit .
  • A few restaurants are so busy already there’s no need to consider this type of marketing.
  • The concept of lose money but make it up in volume is tricky at best.

‘Happy Hours’ are a type of dynamic pricing.  The idea of being able to drive business in slower times in the afternoon and late nights has been around for a long time.  My guess is that most restaurants continue to use ‘Happy Hour’ marketing is that they have a feeling that it is working.  But they don’t really know.  

‘Early Bird’ specials (in some places still known as ‘Blue Plate’ specials) are another form of restaurant marketing.  It makes sense in theory.  Restaurants can be successful through an:

  • Increase in customers paying checks.  i.e. fannies in the seats
  • Higher average check per customer
  • Increase in visits per individual customer
  • Increase in higher margin items

Are people really ready for a sandwich to cost less at 3PM than it does at Noon? It may seem obvious but A Forbes Magazine article from earlier this year offered this about dynamic pricing in general not limited to restaurants:

Despite these practices, the use of dynamic pricing appears to be on the decline overall. In RSR’s survey, in 2016, 28% of respondents saw dynamic pricing as an opportunity to drive margin, but in 2017 that number fell to 22%.

What gives? Well, one explanation is that consumers don’t seem to much care for it. We floated a small consumer survey alongside our pricing research, and we found that 71% of U.S. consumers surveyed didn’t like the practice, and another 23% thought it was merely “okay.”

So apparently consumers do not like dynamic pricing or at least are not yet ready for it.  Enter Big Data to the picture and, at the very least, there will be empirical data points to drive decisions.  

 

 

Another chart I found from the Forbes article:

 

 

 

 

 

Even with that small group’s enthusiasm, a majority of younger millennials still don’t care for the practice – 61% don’t like it, and almost half of those actually hate it. Older generations are even more against the practice, with 80% of Boomers showing no enthusiasm for it.

Given the way millennials tend to view other pricing practices, like an enthusiasm for deals well beyond other generations, it may be that millennials are just confident in their ability to game retailers’ dynamic pricing practices. They tend to be more tech-savvy and more willing to devote time to scouring the internet for the best prices, so they may approach dynamic pricing more informed about whether a price drop is worth acting on or not, and with more of a sense of whether their behavior or the actions of other retailers might trigger a price drop at another retailer as well.

Gaming retail dynamic pricing practices may be ok to millennials but it does seem like an awful lot of work.  

The restaurant industry in the U.S. has been in part responsible for the job recovery as people’s habits have changed and we eat out more than we ever have before.  At the same time it’s never been more challenging to be in the restaurant industry particularly if the restaurant is not part of a larger group that offers economies and efficiencies of scale.  Restaurants will always be looking to reduce costs while maintaining what they consider to be their raison d’etre offering either good food at low prices, luxury/high class dining experience, or a hot scene.  Serve yourself restaurants are also a way to reduce labor costs but still deliver a premium food experience at a lower cost.  

I don’t know that I am ready for true dynamic restaurant pricing but I do expect more restaurants now that they have more data to give it a try.  

An article from Neil Irwin of the NY Times this past Sunday delved into the practices of surge and dynamic pricing.  

What do you think about dynamic pricing for restaurants?

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To protest is something to champion

Boomers got to where they are today in their own unique way. From reciting the Pledge of Allegiance each morning in school, to singing My country Tis of Thee also in school, to watching Superman reruns starring George Reeves where the Man of Steel fought for ‘Truth, Justice, and the American Way’, we all had reason to believe that the U.S. and the Allies having recently won (from the perspective of the mid 1960’s) WWII, was inexorably on the side doing the right thing. Yet fear of the Red Menace was alive and well in the 1960’s and 1970’s and as any Boomer can tell you, doing drills where you had to get underneath your desk in the classroom, and signs for Fallout Shelters were unnerving to say the least.

The Korean War ended in 1953. I was a kid in the 1960’s and the TV show M*A*S*H* (an outgrowth of the protests and dissension of the 1960’s) in the 1970’s did not paint a pretty picture. The show was about doctors in a mobile hospital (that never moved) during the Korean War. But I am betting that many people like me were not sure if the U.S. won or lost. Bill Murray’s character in the 1980 movie Stripes has a line where he notes that the U.S. was 10-1-1 in wars. This was five years after the end of the Vietnam War and while I had little trouble figuring out which was the tie and which was the loss, it still was a pretty impressive record. Our parents came from the ‘Greatest generation’ and I guess the perception was that the U.S. was ‘undefeated’. Talk about a high perch to maintain!

The protests of the 1960’s are often thought of as the dawning of an awareness that not everything the U.S. did was right or ‘worked out’. Then, like today, protests were seen by many as being disrespectful to those that serve in our country’s military.   It was as if questioning policy, motives or actions of the government of a free country should never occur. Of course nobody actually feels it should never occur since that’s un-American. But the misguided notion that protesting by kneeling or sitting during the playing of our national anthem disrespects our servicemen and servicewomen is creating unneeded strife in the United States. Social media has not helped here since before social media you’d never read something publicly from a ‘friend’ that would cause you to form a different and negative opinion of that person. Civility would hold when meeting in person and even if there was a difference of opinion that was not tantamount to ending the relationship or friendship. Sadly that appears not to be the case today. Social media is clearly a megaphone for people to have their voices be heard.

I want to live in a country where it’s not only acceptable, but there’s encouragement for people to have their voices heard whether I agree with those voices or not. In the Vietnam War there were ‘conscientious objectors’ – like Muhammad Ali. Many of them paid a dear price for refusing to serve being arrested and jailed. Others moved out of the country. But there were also many who despite maybe having deep reservations about America’s involvement in Southeast Asia, served their country anyway. I did receive a draft number in the late 1970’s but by that time the U.S. had exited Vietnam and it never went beyond receiving the number. I thought at the time and still do that had I been drafted I would have served my country even if I disagreed with the reasons for our being there. I am watching Ken Burns’ Vietnam on PBS and it brings back so many memories about the way I felt at the time.

People that serve AND who put their lives on the line every day be it military service, law enforcement or other services that are in place to protect the public, are to be admired and appreciated – particularly by civilians. Among the many things these brave people are protecting are the rights of all Americans to be heard in whatever form of legal expression is in place. That’s something to fight for and something that I personally champion and will continue to champion.

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How Pro Sports teams act like startups

I’ve written that even start-up companies need to have a revenue generation model.  The idea that ‘If you build it, they will come” is rarely successful outside of Facebook and LinkedIn.  Startups need to show how their future success prospects warrant investor confidence.  Operating profits are uncommon with startups since most of the time building the platform and audience devour what little profit is generated (and most often there are losses not profits).

Entrepreneurs can create enterprises that have operating profits.  This I know from experience as a company I started in 2000, YourCover.com, has managed to show a profit every year (well ALMOST every year), but the overall audience and sales are relatively modest.  It’s not an easy business to scale since the price point is low and the cost to attract attention in our category (personalized fake magazine covers) is very high.

A couple of weeks ago it was reported that the NBA’s Houston Rockets were sold for $2.2 Billion.  And as the NY Times reported “…the man who will be getting the big check is Leslie Alexander, who bought the team in 1993 for $85 million.”  24 years and an increase in value of $2.115 billion is staggering.  It’s a 2500% increase in value in case you are scoring at home.

Now we all know the Houston Rockets even in 1993 were not a startup.  In fact the team started in 1967 – as the San Diego Rockets – as a member of the old American Basketball Association.  They moved to Houston in 1971.  Over their history the Rockets have had bad, mediocre, good and two championship seasons. (Much to the chagrin of this New York Knick fan).  They’ve also had seasons where the team made an operating profit, came close to breaking even, and others where there was an operating loss.

Most recently Forbes reported  the Rockets, like many NBA teams are operating at a profit.  The huge NBA TV and marketing contracts have made this easier – as long as the team performs well on the hardwood. Even if NBA teams don’t perform well, their brand and reach afford them the ability to build their franchise value even when their on the court performance stinks.  As an example, consider my beloved Knicks who are valued at $3.3 billion – the most valuable NBA franchise.

Do ever-increasing valuations like the Rockets impact the way NBA (and other major sports) run their teams?  Think about it in this context.  If your company has a losing year but knows in the long run the valuation of the enterprise is increasing, that knowledge creates resistance to hitting the panic button in and after any particular season.  It’s sufficient to offer that most business owners do not have that luxury.

Clearly the long-term business prospects of professional sports franchises have increased for many years.  However the more recent stratospheric valuations far outpace those of the 1990’s and before.  Prior to this century, owners of NBA franchises were not playing with the safety net that has been created by worldwide distribution of their product.

Startups and pro sports teams are similar in the lack of a need for a year-to-year operating profit (think Twitter).  There are currently 30 NBA teams.  There are thousands and thousands of startup companies.  Investors are willing to take chances betting on the next Facebook.   When it comes to your company – you are the primary investor and have to evaluate the chances you are willing to take.

Startups are also dissimilar. For the few companies that have the audacity and ability to create a workable, and scalable growth model by spending money to add users to an already valued platform – good for them.  For the rest of us, building a company that creates an ongoing operating profit AND growth, is the only smart choice.

 

 

 

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Marketing and Podcasts

Had the iPod not been developed what would we call recorded audio programs today?

I went to Wikipedia: Podcasting, first known as “audioblogging”, has its roots dating back to the 1980s. With the advent of broadband internet and portable digital audio playback devices such as the iPod, podcasting began to catch hold in late 2004.

Today there are more than 115,000 English-language podcasts available on the internet, and dozens of websites available for distribution at little or no cost to the producer or listener. I am not a regular listener when it comes to Podcasts. Partly due to an unfair bias I have about not wanting to give Apple credit for being the foundation of the term Podcast. Given the impressive statistics with regard to podcast listeners I am out of step with the way people behave. Those stats are eye opening.

An article last week on the Podcast upfronts (yes this was for real) ‘Podcasting will pull in $220 million in revenues this year, up 85 percent from the year before. That stat,courtesy of PriceWaterhouse Coopers, was read by Randall Rothenberg, president and CEO for the Interactive Advertising Bureau (IAB), this morning at the start of the IAB’s third annual Podcast Upfront.

Westwood One presented fresh research showing 5 percent of U.S. adults are heavy podcast listeners, 15 percent have listened in the last week, and 24 percent listened in the last month. Those heavy listeners tend to be young, male, and have an above-average income. They’re also heavy viewers of streaming platforms like Netflix, Amazon, and Hulu.

Podcasts fall into the category of content marketing. One of the things that makes them cool is the ability to track engagement in terms of downloads. The statistics are interesting. A recent Edison Research 2017 study of podcasts revealed that 50% of podcast listeners (estimated to be 42 million) listened to 3 or more HOURS of podcasts per week. Concerned that it’s only young people with time to spare? 33% of listeners are 35-54 and 44% are 18-34. 16% are 55 plus – which surprised me more than anything else. 77% download and then listen to the podcast immediately. Almost 2/3 of podcast listeners (64%) listen to 3 or more podcasts per week. This makes me wonder where and when they are listening and the data shows 51% ‘mostly’ listen at home.

Another really important statistic is that listeners hang around – 86% listen to all or most of the podcast. This is the reason that sponsorships of podcasts continue to gain traction. Below is the summary from Edison. Podcasting continues to rise, with Monthly listeners growing from 21% to 24% year over year.

♣ The audience for podcasts continues to be predominately 18- 54, and leans slightly male.

♣ The Podcast listener remains an affluent, educated consumer— and one that is becoming increasingly more likely to gravitate to ad-free or ad-light subscription experiences.

*The Podcast Consumer – Summary The Infinite Dial © 2017 Edison Research and Triton Digital THE INFINITE DIAL 2017 Survey Methodology.

♣ Clicking on a podcast to listen to it immediately (either streamed or via progressive download) is the dominant paradigm for listening, though 27% do subscribe to podcasts.

♣ Subscribers tend to have been podcast consumers for longer than non-subscribers, consume more podcasts, and are more likely to use their smartphone as their primary podcast player. . The Podcast Consumer – Summary The Infinite Dial © 2017 Edison Research and Triton Digital THE INFINITE DIAL 2017 Survey Methodology

♣ While Home continues to be the most often named location for podcast listening, the vehicle is a strong second.

♣ Most podcast consumers listen to most of the podcast episodes they download, and the vast majority listen to at least most of each episode. Podcasts are the number one audio source by time of consumption among podcast listeners.

♣ On the smartphone, podcasting’s Share of Ear® is tied with AM/FM content, and leads AM/FM among 13-34 year olds.

In sponsoring thoughtful and/or thought provoking content, the benefit include helping build overall brand value given the growth of podcasts, growing the commitment by the audience, and finding ways to leverage the ability to measure engagement. While it remains dependent on the product, podcasts should be considered to be a part of a smart marketing channel mix.

I’ve not always felt that way but the stats are too compelling to ignore.

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