How Spotify looks like Amazon once did

As I thought about writing this post Amazon.com announced last Friday morning that it was making an offer to buy Whole Foods for more than $13B. I am thinking a lot about as to what kinds of changes Amazon might bring to Whole Foods.

Spotify.com is also moving closer to an IPO in order to raise cash despite its continued user growth. Expenses continue to outpace revenues – which were in excess of $3B last quarter. It’s a rare occurrence when the phrase “lose money but make it up in volume” isn’t a death sentence. But that’s where Spotify is today, and where Amazon.com was for a very long time.

Given that Amazon is now nearly twenty-three years old (on July 5) and Spotify just turned 11 it’s interesting to compare where Spotify is today to where Amazon was in 2006.   It took Amazon until 2001 to turn its first quarterly profit. Spotify is still seeking its first quarterly profit which does not appear to be imminent.

Back in the late 1990’s I bought a few shares of Amazon stock. I always have liked Amazon’s business model and back then I was aware that all the money Amazon was bringing in was going into creating distribution centers. At the time Amazon was almost solely focused on book selling. Yet by putting money into infrastructure, I (like many) figured Amazon was preparing to ship everyone else’s stuff. And that’s what happened. Of course before that happened a friend of mine who was giving me some investment advice directed me to sell my Amazon shares feeling that Amazon was going to drown in its own debt. So I subsequently did sell my shares for a small profit. We’re still friends (although that one still stings) but the moral of that story is never take advice on equities from a bond trader.

So take Spotify as a comparative. Where Napster failed, and where Limewire, Kazaa and Grokster’s file sharing went afoul of the law and were shut down.; Spotify has ‘succeeded’ in the sense that it has a vast coterie of artists who have accepted its pay-per-use model. Building that infrastructure is expensive. Really expensive. And still many artists like Taylor Swift and others feel that Spotify keeps too much of the fees it charges users. All the while Spotify continues to rack up losses ($600 million last quarter). Something’s got to give right?

One thing that’s important to keep in mind is the way Spotify’s users feel about the service. As far as I am aware, users (myself included) LOVE the service. The Spotify platform utility is really good with a great UI, intuitive search and just the right amount of relevant suggestions on other music one might consider based on your prior listening habits. The reward for Spotify is massive adoption with more than 140 million users and still growing rapidly. Jeff Bezos of Amazon has focused on delighting Amazon’s customers. Spotify has that same singular focus which is a long term winning play.

The way it can work for Spotify and artists is for Spotify to continue to get bigger. More users means more revenue for everyone and there’s certainly sure to be a critical mass tipping point where Spotify becomes profitable – and stays there.

Does that scenario sound familiar? It should because in several ways it’s similar to the arc of Amazon. Spotify has not delved deeply into subscription video and publishing, but you can be sure that it’s in their future plans. Video and publishing success for Spotify will not be easy, but with a large user base it has one heck of a good start.

As a musician myself I have been concerned about artist compensation, which will be an ongoing battle with Spotify. However, the ability to listen to a vast catalog of music, anywhere, anytime, has me listening to more music in the past few years than I had in many before that. I assume I am far from unique in that sense. And as a musician, more people listening to more music, makes me very happy.

One last note as it pertains to Apple Music. Apple too has been great for music listening overall. But I feel that it has lost the higher ground to Spotify. The same can be said of Pandora, which like Apple has modified its offerings to consumers to be similar to Spotify in some cases. Does Spotify have too big an advantage? I am willing to bet yes.

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The Long Tail of Old Jobs

There aren’t many but there are still a few horse-drawn carriages on the streets of New York City – a somewhat controversial subject between Mayor DeBlasio, animal rights activists, and the owners of stables on the city’s west side.

The drivers of those horse-drawn carriages have old jobs. Many old jobs have gone by the wayside over the past century but the rate of job irrelevancy seems to be accelerating.

Growing up in the suburbs when I was young we had a neighborhood ‘Egg Man’. This man seemed older than old (and as I recall toothless) and his broken down station wagon could barely make it down the street. He would deliver eggs (and milk) straight to our door once a week. It’s a safe bet that there are few, if any, egg men anymore. Now we have Amazon Prime, Fresh Direct and Peapod. Yet per capita, Americans still consume 260+ eggs per year. Maybe there is a business delivering a hyper-local premium experience in the form of cage free local laid eggs and other dairy products. But it’s not a big business. The Soda Man is gone too and I don’t think he’s coming back.

Chris Anderson’s seminal book ‘The Long Tail’ from 2004  discussed the opportunity for businesses that catered to smaller niche groups of consistent and passionate customers. It gave hope and opportunity to many and emboldened others to try to make a go of it when they otherwise might not have bothered. The idea that an artist could make a recording and deliver it digitally to their fans bypassing the production and expense of having a label involved and still make a living was exciting even if it did not quite work out that way.

Some old jobs:

B0wling pin setter

Who even remembers?

Toll taker

Even as recently as the 1980’s being a toll-taker used to be a pretty decent public service job. Today that’s not the case. There are a few left and there likely will be for some time to come. The same can be said for NYC subway token clerks.

Printing sales

From personal experience I can offer than being a commercial printing salesman is also an old job. It does have a long tail opportunity since it’s not as if printing is going away entirely. But commercial printing is far from a growth industry. These days it’s a somewhat rare occasion when I get to use my printing chops to specify a print job or come up with an alternative that fits the project need. Yet I expect that core skill to serve me in some fashion for the balance of my professional career. You never need a printer, until you need one. I can say the same things for my friends and colleagues in the ‘data’ industry (which used to be called the mailing and email list industry). You never need a data guy until you need a data guy.

Deliberately bringing back old jobs is hardly a way to move forward. However for all the people that were trained to do a job they’ve done for twenty years or more, who now find themselves in constant peril of being sacked, it’s clear that a little advance warning would have been welcome. Nobody was telling people in the 1980’s and 1990’s to ‘update their skills’ and to prepare for what I am terming the ‘Automation Economy’.

Service jobs will best withstand the automation economy but they too will morph and be different as technology and automation continue to progress. Robocop http://www.imdb.com/title/tt0093870/ seemed a bit farfetched when it was made in 1987. But a robotic police force (working in concert with police) would clearly change future employment figures for law enforcement and not in an aggregate positive way. We already know that with the development of self-driving cars, taxi, Uber and Lyft drivers are not long for this world even if it takes twenty years. That old job will not come back but the option of a paid guide to ride with you on a journey offers a personal service of high value. In as such, that would be a long tail job.

More old jobs:

Tutoring:

The business of sole practitioner tutoring is a long tail job and which itself has changed in large part due to remote access. We are far from the days where giants like Kaplan and Princeton Review could completely dominate the industry yet they remain relevant companies. What’s changing is that every day more one-to-one tutoring is done online and more people have access to tutors personal and otherwise than ever before. And geography is not a factor.

There remain plenty of other old jobs that will have a long tail. Accounting, Finance, and Legal jobs will change but are far from being made irrelevant. Performing some of those jobs in a large corporate organization may not look like what it does today thirty years from now. There could be many more accounting, financial and legal independent contractors that work with but not directly FOR the corporation. In that case those people become long tail employees in that they are saddled with having to manage multiple gigs in order to not be left out in the cold when one ‘client’ leaves. At that point haven’t they all become long tail jobs?

Professional musician:

How about orchestral and theater musicians? There are not nearly as many professional orchestras as there were thirty or more years ago and a good number of theater musicians have been ‘replaced’ with technology and recorded music. At the same time, being a professional musician will remain an avocation. There just won’t be quite as many of them able to make what might be considered a ‘decent living’.

Old jobs remain old jobs when they stagnate and fail to adapt and change. Working on a machine line offers little chance for individual innovation. The idea of a world of independent contractors has its merits and detriments, which I will not go into here but will in a future post. A talented member of my family is a professional musician (he’s a fiddler – really he is and a good one at that), an accountant and travels the world while delivering services for both from wherever he is via the miracle of digital communication.

What concerns me is the overall social impact of an increasingly isolated work force. The ability to be highly productive independent of the surroundings is a two-edged sword. The abandonment of personal interactions (whether intentional or not) is troubling and will have a variety of significant social impacts. I believe that when people work closely together the opportunity exists to produce the best consistently quality output. And that can be achieved in no other way. How society meets this challenge will be very interesting.

The Long Tail of Old jobs has already begun ready or not. Were you ready? Are you ready? 

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Go out to lunch for a change

I am nearing the end of my fourth decade of being part of the working world and I’ve always been a fan of getting out of the office for lunch even if it means brown bagging it in the park. Sometimes that’s been necessary.

With so much time spent staring at screens, going out to lunch with someone can be a welcome break from the hour-to-hour grind of the workday. Yet somehow going out to lunch has become either a guilty pleasure or an unaffordable (both time and expense) luxury. That’s more than a shame as far as I am concerned.

So many of my professional relationships have been elevated by breaking bread. Earlier in my career when I had young children I lived by the motto of ‘you can have me during the day but nights are for my family’. Meaning that lunch was the time to meet a client or colleague, discuss business and even talk about personal things like family and travel. In the 1980’s the three martini lunches were pretty much becoming a thing of the past. Inviting clients and prospects to lunch (yes there was a time when a business prospect would allow you to take them to lunch) potentially fostered those relationships in the days before email and being ‘on call’ nearly 24/7.

I’ve written about being too busy to do anything but work, work, work. Despite that I’m here to offer that going out to lunch is an antidote to a mundane workweek in which by Thursday you cannot recall what you did or ate on Tuesday. Yet with the lengthening of people’s work hours (does anyone really only work 9-5 anymore?), instead of taking time to get out of the daily routine, people are forgetting and missing the benefits of changing one’s perspective by getting out and doing something different for an hour or two.

Keith Ferrazzi wrote a book several years ago called ‘Never Eat Alone’ and while I get the point of making eating time a social and professional activity, there are also times when I like being alone, getting a sandwich or salad, and sitting in Bryant Park watching all the people come and go.

I’ve friends who I don’t see as much as I’d like – because we’re all so busy. They are often too busy to have lunch even when we work in the same city. One other thing, I am very good at lunch. Mainly because I enjoy it so much – the change of venue, the atmosphere of different and the community created by engagement, all most often combine to elevate my spirit, and my afternoons. The work seems to always be there when I get back to my desk.

Don’t eat at your desk today. Consider a change to your routine and go out to lunch with a friend, family member or even a client. And then try to do it more often.

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B2B marketers need to be more concerned about their own brand image

As a strategy and marketing agency owner I am constantly on the lookout for what I see as good effective marketing efforts versus what is not. Since we work in both the B2C area as well as B2B areas, (as much as we wish there were no longer a distinction between the two because in both cases we are working with PEOPLE, that’s not yet the case), it’s pretty clear to me that B2B marketers care much less about their own brand.

And it makes some sense right? After all, most successful business relationships are between people (see above), and it’s mostly about the relationships you have built or are in the process of building. Except for one age-old giant burning question – How to get attention from those that do not know you or your brand at all?

Lead generation programs have been around forever. They can be critical to the success (or failure) of an enterprise. But what happens when that lead actually comes-a-calling? Or at least a-looking? As we know very often the first thing they’ll do is look for your website. Having good SEO and an SEM programs in place are standards that oddly many B2B companies completely ignore.

What happens when that hard-earned prospect arrives at your website? Was it designed in 2009? Or earlier? Your prospects will notice much more easily than one might immediately imagine. Every touch point you have with a prospect or customers reflects on your brand and that brand’s value.

On your website consider having multiple outsiders test and proofread every page on your site. The amount of misspellings I see on websites is alarming and because I am a spelling snob http://wp.me/pn6jX-An the moment I see misspellings on any communication, printed, digital or otherwise, my opinion of the brand will have taken a serious blow.

We work with a variety of clients from start-ups, to young companies to established brands. Yet all get the same initial approach and that starts with what we like to call house-building. Before you’d invite people over to your house you’d probably like to be clean and spiffy so that you will impress your guests. Having an old, outdated, clunky website and brand image may not make visitors want to come in and stay to have an extended visit. Showing photos of long gone team members, out-of-date events, and ancient (that’s like three months) blog posts, all do nothing to promote or enhance your brand image.

My co-founder, business partner and Creative Director is fastidious about proofreading, and attention to minute brand details when it comes to anything that leaves ‘our shop’, as he likes to say. We also continually work (and are working) on remodeling our own ‘house’ to reflect what we are doing right now and not what we were doing two, three or four years ago.

Anywhere your brand has a presence, be that social media, web, or more traditional media (print, TV, radio, out-of-home), B2B marketers can stand out from the pack first by having their house properly built, then by delivering on their own promise and P.O.D.

It isn’t impossible but it does require some thought and investment both mental and financial.

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I tried to go cashless and still failed

I’ve written about digital wallets and my complete disdain for writing old-fashioned checks. Living around a major city like New York one might think that digital natives (i.e. Millennials) are living life without ever having to pull out greenbacks and silver. Debit cards, credit cards, PayPal, Apple Pay, Samsung Pay, Square, Venmo and a host of platform names that I am not even including show that the possibilities of a cashless life are right around the corner. Maybe there are a few that can go cashless and checkless, but for most of us it’s just not truly possible.

So far for the month of April I’ve made every effort to NOT use cash. I started with $37 (full disclosure that this effort came about because I was too lazy to go to an ATM). In the 13th day of the month I now have $22.13. Close to cashless, but for me it was not possible.

On hating writing checks: To start the month I participated in an all-day in person baseball fantasy draft on April 1 (a Saturday).   The league is made up of men of various ages (women are welcome but to this point have declined to participate), but the protocol for payment to our league ‘Commissioner’ is a paper check. It’s possible that cash would be accepted but who carries a wad of cash these days? I asked about Venmo. The Millennials all laughed and the Baby Boomers seemed unaware.

Then in my endeavor to go cashless I used a credit card to pay for everything. That’s hardly unusual as there are many people that do the same.   But even in a major city like New York I had three occasions where I was unable to use my credit card.

#1 – The deli on east 45th Street that has a policy of no credit cards for under $7.00. Believe it or not my egg sandwich was $3.87.   Had to dig out the cash and then had change jingling in my pocket all day.

#2 – Street food vendor. They don’t have Square or any other kind of credit card processor. $ 7.00. (No change was a bonus).

#3 – Toll Booth to Atlantic Beach. This was surprising. Not only that there were Toll Booth operators (why they are called operators is beyond me), but they had lanes for pass payments that did not include what I thought to be the omnipresent EZ-Pass. I asked the ‘operator’ if this was a topic of conversation and he smiled wryly and said, “sometime over a bottle of Schnapps I will tell you about it.” $2.00 each way.

The truth is that as yet, in the United States at least, we are not even close to having a true cashless society. Can we really expect kids operating a lemonade stand to have a credit card processor or Square account? That would be more likely for a high school car wash however.

There are also inherent costs on merchants to adopt cashless technologies. All that can be said to them is sorry and perhaps people will buy more if they go cashless?

Cash has been around for thousands of years. To think that there’s some near future that would not require any currency is hard for someone of my age to fathom. Bitcoin and other Blockchain payment systems are slowly becoming more popular but it remains to be seen which of the platforms will endure.

There is a certain amount of chance in my personal experience. Admittedly it’s possible that I could have gone the whole month and been able to avoid using cash had I walked or driven to different places.

Of course there’s the anonymity of cash. Many would consider that to be an asset unto itself. Cash is untraceable right? Until it’s not. I’ve seen it in the movies.

How long do you think it will take for a cashless and checkless world to take hold?

 

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Slide presentations are not about how smart you look

Most business professionals today need to have at least some basic skills in PowerPoint or some other presentation format. I know this because personally I am pretty lousy at creating attractive and interesting PPTs. The one thing I do keep in mind when creating a presentation is that less is more. Disappointingly there are too many incidences of people behaving badly when it comes to creating a compelling and cogent presentation using PowerPoint or any other format.

I acknowledge that slide presentations can serve many different purposes. There are times when detailed information within the presentation is important to support the points and conclusions being advanced. But if you see anything like what I see, the amount of information contained in one slide can be dizzying, overwhelming and consequently…BORING!   (i.e. you lost me at hello).

Before the advent of PowerPoint the method in which most presentations were delivered was either a narrative, (today we seem to call them Whitepapers) when sent as a document, or, when presenting to a live audience, a flip chart that would contain only the bullet or higher level points of discussion.

Once PowerPoint became the default presentation platform, slide presentations began to devolve into grandiose, bloated, and self-serving documents intended to impress the crap out of whoever took the time to read it all (fewer people than you’d wish). It isn’t complicated as to why authors would want to have something both slick and detailed. I’m reminded of the schoolteachers that when giving a test would ask you to show your work. That’s what has occurred with so many slide presentations – they are made to show the work that went into it, instead of making easily understandable points that then would be supported by a narrative – written or oral.

Putting EVERYTHING you can think of to support your idea in the presentation actually does not make you look smarter or more thorough. Admit it, there’s a narcissistic quality to creating the ‘perfect deck’. But in doing so, you and your audience will miss the point. And the point is to clearly convey the concepts as clearly and simply as possible so the real work can begin.

As an amateur jazz pianist I learned early that being able to play lots and lots of notes with lush embellishments could show broader abilities and perhaps impress a few people. But the more important lesson I learned was the next one, which was – the real professionals know what to take out to make things both tasteful yet compelling.

Here’s my advice, try not to make your presentations look like the outfield fence at a minor-league baseball park. Your audience will appreciate it and more importantly follow it more closely without even realizing.

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When things go wrong, it’s ok to be angry but be a pro

When it comes to athletics, there’s a big difference between being an amateur and a being a professional.   Some amateurs can be highly capable and every bit as good as a professional. What separates them from professionals is that they do not get paid. While people know this already, being a true business professional is much more than simply “being paid”.

Professional athletes (and professional artists for that matter), don’t always act professionally both on and off the playing surface. But what almost all manage to do is show up for ‘work’ and put up a 100% effort. They know that nothing else will suffice.

Think of a basketball or tennis player not giving his or her all. Spectators will know pretty quickly, teammates and coaches even more quickly. Performing artists are in the same boat. Nothing else but their best efforts can be displayed lest the paying public think that they are ‘tanking’ it, or ‘mailing it in’.  There’s something special about being called a ‘pro’ and to me it’s one of the highest forms of praise.

During sporting events there are numerous occasions where an official’s call might not go in a player’s favor. You’ve seen many players get upset. But what you also see is their ability to have a ‘short memory’ of what was unfair so they can get back to playing at their highest level during the game. There’s not time for whining and complaining and that’s not going to help the team or the player win the game.

Being a true business professional calls for some of the same ‘short memories’ that professional athletes have to exhibit. Things ‘happen’ at work between co-workers, managers and employees (and vice versa). Sometimes those things make people angry. How people deal with those things are indicators of their professionalism. You are not soon going to forget being wronged (in your view) at work, so the short memory is only evidenced in how you interact with your team members after the fact.

It’s highly frustrating to realize the motivations for what may have created any particular circumstance, and then not be able to do anything about it. That happens frequently. What you might consider doing is to assess your options going forward, try to reach a decision on how you are going to proceed, set that course and do everything you can to make that happen. This is easier said than done but at least you will feel as if you yourself are taking positive steps to change the status quo. And don’t be surprised if doing NOTHING is the best immediate action, which can be even more frustrating.

In your career there will be any number of occasions when your patience and professionalism will be tested. As I tell my kids, it’s ok to be upset but always, always, be a pro.

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