Archive for the ‘biz strategy’ Category
The stock market has day traders, real estate has house flippers, and the internet has domain flippers. The concept is the same across these industries: invest in something for the short-term, run it up to the highest price, and sell at a profit.
Any short-term investing takes on the air of “easy money” and “get rich quick” schemes. More often than not, you’ll see these business schemes in a bad light, with shady characters and scheming con men, from reckless day traders to house-flipping slumlords to “Fast Domain Riches: How to make easy money for life!!”
On the opposite end of the spectrum though, you see very legitimate forms of business, with responsible day traders encouraged by online sites like eTrade, or responsible house flipping such as those featured on shows from A&E’s Flip This Houseto TLC’s Flip That House.
Even the domain name business has some interesting business models emerging. There are a few strategies involved in running up the value of the domain name you purchase. Obviously you have to pick a name that you perceive will have some future value or use in the marketplace, so that your purchase of it today will return a high profit upon selling. (Anecdote: my friend’s boss purchased the domain name jazzradio.com and sold it for a cool $20,000 to a buyer turning it into a 24/7 internet jazz radio station.)
Another strategy also predicts reading into the future a bit when choosing a domain name, but also educating a prospective buyer in the future “hotness” of that domain. That’s the premise of Lean Hollywood, a domain name for sale to potential filmmakers or creatives who identify with the “lean” process of maximizing efficient production.
From the Lean Hollywood website:
I think the name lean hollywood, leanhollywood.com is sticky and would be a cool name to brand a new blog, a new product, or a new service. Lean has positive connotations: being lean, lean manufacturing, lean thinking, lean meat, etc. For this reason I have bought the domain name leanhollywood.com. My purpose is not to develop the name but to flip the name.
According to the Hollywood Creators Collective, the folks behind this business proposal, the open pricing model is part of their belief in transparency and efficiency. True to their word, they list a 2009 price table timeline for purchase of the domain name:
PURCHASE BY THIS DATE PRICE
April 2009 $299
May 2009 $400
June 2009 $600
July 2009 $800
August 2009 $1000
September 2009 $1600
After September 2009 200 dollar monthly increments until price is a flat 5000 dollars.
Lean Hollywood tries to sell you on the concept of “lean” first, then tries to sell you the URL/domain name. Now if Detroit could only sell itself to you first as an awesome city to live in, then you could flip houses there easier, where the median home price was $7,500 as of December 2008.
In the office kitchen, there’s a table crowded with knick-knacks and odd-ends, like the forgotten corner in a yard sale. Old books, plastic flowers, a vase, a bowl, several variations on a paperweight.
Upon closer inspection, you realize these are the desk remains of colleagues recently departed — most of them involuntarily, part of the fallout of an organization shedding layers to improve efficiency.
One book left behind was the above 1998 Cambridge Press title, Entertainment Industry Economics: A Guide for Financial Analysis by Harold Vogel. I flipped through it and immediately knew it would be one of my more, well, entertaining reading projects.
This book interests me for a few reasons:
1. It provides the economic theories/realities behind contemporary entertainment industries. It’s a financial analyst’s perspective of pricing structures, revenue models, distribution methods, and other considerations that an MBA would need to know, but may not be as apparent to the person marketing these industries. Someone like me, pursuing an MS in Strategic Communications, is used to approaching these industries from a narrow marketing perspective. This book is like a transparency filter to me, and fills in a lot of gaps I had about these industries. On the marketing side, I knew there were a lot of missing answers, but I didn’t know how to ask the right questions.
2. Because this is a real economics book, it does go more into the social sciences aspect of entertainment itself. The introduction dives into conceptual differences between “leisure” and “work” and the sociological factors that have increased our time for entertainment and the cultural place it holds in American society.
3. The book is tightly-written in the language of finance — macroeconomics, profitability synopses, corporate overviews, big-picture accounting — but is easily grasped as a simple narrative. I credit Vogel for striking a good balance of intellectual depth with accessible readability. As Edith told us (from Zinsser’s book On Writing Well), the simpler your words, the smarter you sound.
4. If the internet is a time machine, old books are the way-way-back machine. This book was written over a decade ago and it’s so much fun to read sections on the Music industry or the Broadcast industry or Motion Pictures and laugh about all the things the analysts never even saw coming! (Retro Futurism in general is a fun genre, looking at the past’s idea of the future, often involving flying cars and other imagined flights. My favorite retro-future concept involves food — surprise! — as featured in The Gallery of Regrettable Food, including some real culinary puzzlers from mid-century America… weiners in a sea of beans, anyone?)
I recommend this as required reading for anyone in or entering the entertainment industry, to get a lay of the land and understand the economic forces behind it all. This text doesn’t look readily available for mass market purchase, but you can preview the latest edition of this book (2007) on Google Reader or find it at the library.
On second thought, I guess this type of analysis is readily available from research consultants like Forrester’s or Deloitte, who routinely publish their industry outlooks as their core business. I prefer the book and its physical presence though. The weight feels appropriate — 500 pages, bound and covered, in your hand.
Forget silicon chips, search algorithms, and semiconductors — the most delicious startups today aren’t tech, they’re food startups! Instead of garages, the tinkering goes on in communal kitchens, with yummy results just waiting to be monetized.
Take a look around your nearest local market (especially the outdoors ones) and you’ll observe the artisan effect — the interest that people take in small food vendors who make a great product.
Brooklyn Flea is the trading floor of the food micro-enterprise market. A recent NYMag article highlighted this year’s newest small-operations vendors (among them, Elsa’s Empanadas, Saxelby Cheesemongers) and noted:
When the Brooklyn Flea launched a year ago on an asphalt schoolyard in Fort Greene, no one expected it to become a dining destination—never mind a springboard for the fledgling careers of the food vendors who gravitated there. The Flea, in fact, has become something of an incubator for micro-batch, locally made products, from pickles to ice pops.
Kathrine Gregory formalized this incubator concept in her communal kitchen operation in Long Island City, called Mi Kitchen is Su Kitchen. She owns three facilities, each one with its own specialty and equipment. Food manufacturers (bakers, quiche-makers, etc) come and rent a few shifts at a time, to get access to commercial equipment you couldn’t fit in a typical NYC apartment (nor would you necessarily want in your personal living space): a revolving rack oven, an 80-quart mixer.
“Food operation startups are capital-intensive,” says Kathrine. “If you’re going to grow a food business, you need a proper foundation, some kind of legal entity like a DBA or LLC or Inc. You need commercial space with licensing and the structure to grow your business.” In other words, once your home-made chili mango salsa recipe becomes a hit and you want to distribute outside of your friends and family, your home kitchen becomes a liability. You enter a professional space that requires inspection by insurance companies and the State Department of Agriculture and Markets.
Kathrine was a guest on WNYC radio yesterday, when The Brian Lehrer show aired a segment called “Growing Together” — about the power of collaboration in today’s small businesses (listen here, 19 minutes).
Kathrine’s food incubator doesn’t target the “business people” who run food enterprises, it targets the “manufacturers” who actually make and craft the food products.
In her words, “It’s not the restaurateurs and it’s not the cafe owner, it is the brownie-maker and the pickler. This is the manufacturer who is going to sell their product to the Dean & Deluca’s, the cafe owners, the restaurant.”
Like baby chickens, young businesses are vulnerable. They need protection from the harsh world if they are to survive and grow. A business incubator provides that protection to young startups, according to another guest on the “Growing Together” segment — David Hochman, CEO of the Business Incubator Association of New York (whose logo is in fact a hatched egg).
David’s organization draws on national academic research on business incubation, citing an 80% survival rate of startups, 5 years after graduating from an incubation center — and a majority of those startups stay local, in the region where they started. This is encouraging news for regions that need to harness local entrepreneurial activity into a focal point, like an incubator, whether the industry is high-tech or new media or food-related.
While there is no typical business incubator space, Mi Kitchen is a literal cookie-cutter place, and proud of it.Photo:
Gabriele Stabile for NYT, When Cooks’ Dreams Outgrow Their Ovens
Brand extensions are a natural for celebrities.
Britney has a fragrance, Puffy has a scent. Celebrity chef Rachael Ray sells santoku knives, EVOO (a Rachael-ism for Extra Virgin Olive Oil) and other kitchen products, including that infamous “garbage bowl” of hers. Jessica Simpson has literal brand extensions, a HairDo line of synthetic hair accessories.
But what about the common man or woman? How do we break into the market with our own product lines?
Breakout: Lauren Luke
Case study of a sell-sumer turned celebrity cosmetics purveyor:
Sometimes, you get discovered. Ad Age recently had an article on Lauren Luke, an unemployed single mother in the U.K. who started selling makeup on eBay, and then posting video tutorials of herself applying the makeup on YouTube.
Lauren’s video tutorials are amateur, unscripted and ad libbed, with a yapping dog in the background. This informal, no-frills approach to makeup application has brought more than 34 million visitors to her YouTube site. Eventually, the online attention brought her into a partnership with 1) a professional makeup manufacturer and 2) NYC ad firm Anomaly, who will help brand, market, and launch the new product line: By Lauren Luke.
Launch Your Line
What if you just want to get in the game now and partner with manufacturers and marketers immediately?
Lucky for you, this is the core business of Launch Your Line, a new turnkey service that lets people with a product line idea bring their vision to market faster. Their motto: “Start with a dream, end with a product line.”
Entrepreneurs sign up for free and get to line up all the business and service processes at once. A central “Dashboard” controls how you outsource processes like drafting, prototyping, production, manufacturing, marketing, advertising, distributing.
So there you have it. I expect to see some quirky brand name product line in the works from you budding entrepreneurs…
Basically, academic thinking takes a lot of free, expansive thinking, that can wander sometimes, and sometimes go on tangents, and ask rhetorical questions, on its quest for knowledge. Academia can be the unending sentence, braced by more commas and continuations.
Contrast that with business and industry, which require a goal and an end date. Business is a full-stop period. It knows where its going and stops.
Industry is also a loud exclamation point. It has to shout to be heard in a competitive market place (!!!!!)
In contrast, academia is the question mark, the critical thinking that guides us.
Read John’s post for a good synthesis on how these four punctuation marks play out in the academic and industry spaces. It explains some of the miscommunication or misplaced intentions between academics and business folks — one thinks the other is stuck in the ivory tower; the other things the one is too short-sighted.
(I’m sure some situations call for the interrobang: a typographic character, a combination of the question mark and exclamation point at once.)
The concept of now can be a zen-like experience. In this “website” (in quotes, because I’m not quite sure what to call it) from Sprint, now washes over you like a trance.
Drone-like music, punctuated by an attractive android voice that every so often, has some cryptic metaphysical statement:
“It is currently now in all time zones”
“How about a big bowl of now”
“All aboard the now machine”
“This point in time will self-destruct now”
Sprint certainly has a sharp marketing team, as evidenced by the website above, and this clever, infographic-intensive TV spot for their 4G network, the Now network. I mean, the commercial mentions Twitter, which I’ve never seen in any brand’s national TV campaign. That alone is some kind of savvy, as evidenced by the commercial itself saying 26% of the people watching it don’t know what Twitter is.
After John Keenan’s talk on wireless technology this week, I realized there’s this whole backstory to emerging technology that’s playing out among the big telecommunications giants. We, the end-user consumers, have no idea what’s at stake, who can win and who can lose, depending on how new technology is managed and distributed.
Now that I know more about this technology backstory, it’s interesting to see how the major players (Verizon, AT&T, Sprint, T-Mobile) are approaching their advertising campaigns. I’m going to keep my eye out for those who are marketing to the power of the technology (robust networks, fancy phone hardware) and those who are marketing to more immediate consumer needs (price and minute value, “Fave Fives” social networks, games).
Also, can somebody tell me whose job it is to design a website like Sprint’s now? I want that job!
Buckle up and enjoy the millisecond!
*EDIT: Just configured my iGoogle page (thanks to Danny). It’s basically like the Sprint NOW page…
In a time before Twitter and Facebook, there was… cheese.
Old-fashioned, hand-made cheese, long before factories could produce “cheese products” packaged in aerosol cans and individually-wrapped cellophane packets.
Industry trade mag Dairy Field reports that artisan cheesemakers are responding to evolving consumer desires — a subtle rejection of factory-produced goods:
Cheesemaker Valerie Thomas of Winchester, CA-based Winchester Cheese Co., cites other factors — most notably an innate, often unspoken, desire to return to a simpler time, before wireless phones and Blackberries.
“The time is right for artisan cheese makers to be successful because the general population is receptive to remembering when things were made by hand,” Thomas says.
The tailored suit: the measure of a man
A tailored suit signals your arrival. A bespoke tailoring for a man is the equivalent of women’s haute couture (French, “high sewing,” “high dressmaking”).
The word “bespoke” describes this industry of made-to-measure fittings, where the end user receives a product that is highly specialized, not mass market. Today, bespoke industries are popping up around cars, shoes, software, even financial products.
But in this economy, tailored suits and custom cars aren’t as accessible as the the bespoke sandwich.
City Sub sandwichesForget Subway, enter bespoke sandwichmaker City Sub. Once you have the latter, it’s hard to go back to the former.
City Sub’s tailored sandwiches — using quality ingredients and a methodical layering process — can “restore your faith in American craftsmanship.” That’s according to Gene B., a reviewer of City Sub on the website Yelp.
I’m not sure how old Gene B. is, but he sure misses that old-time sandwich-making process. In a post-factory age, we’re nostalgic for things still made by human hands.
“Watching the staff quietly and efficiently turn all those crazy orders into beautifully rendered sandwiches is a glimpse into the past, and what Old New York used to be.”