kottke.org posts about business
Back in 2014, a lovely short film by Shaun Bloodworth called The Putter went viral. The film shows Cliff Denton making scissors for Ernest Wright & Sons. Denton works for the company as a putter, short for putter togetherer.
Before the film, business at the firm was so slow that staff were only working two days a week. When the video took off online, the company received two years' worth of orders in a single day. Two years later in June 2016, the company launched a Kickstarter campaign for a throwback pair of kitchen scissors and ended up making four times their goal from more than 3600 backers.
Outwardly, this seemed to be one of those stories about how an old school company found a new audience and a second chance on the internet. But internally the company was struggling, hamstrung by a series of setbacks. Problems with design and machining the new scissors model delayed production for a year and two key employees, including putter Cliff Denton, were off the job due to illness. Shaun Bloodworth, the filmmaker, died waiting for a liver transplant. And then in February 2018, the news broke that Nick Wright, the company's managing director, had died suddenly.
Under new leadership, the company vowed to carry on and fulfill all of the Kickstarter orders, but a message to Kickstarter backers yesterday revealed the company was deep in debt and would be "going into receivership". It also revealed that Wright had taken his own life. Here's the full message from Pam Addy, the current managing director of Ernest Wright & Sons. (Note: this includes a portion of a final letter written by Wright before he died.)
Hello everyone, this is Pam.
Following the death of Nick Wright, who took his own life in February, myself and the rest of the Ernest Wright team have endeavored to honour all you Kickstarter backers who pledged money for the Kutrite design of kitchen scissors. Unfortunately, only now am I aware of the extent of the business debt incurred prior to my taking over as Director on March 22 2018, so it is with great sadness I announce that Ernest Wright & Son Ltd will be going into receivership.
If you have not received your goods, you will be contacted by the Insolvency Practitioner in due course. Following advice from them, if you paid by Credit Card you may wish to contact your card provider, to see whether they will refund you the money paid.
Nick wrote a final letter. In this letter were personal messages including one to Kickstarter people:
"I tried so hard, this was no scam, I just could not make it happen. Too much pressure, not enough resource or time. I am so very genuinely sorry to you all."
What a sad situation for Wright's family and the company. It's tempting to want to draw conclusions between the finances, the campaign, and Wright's death, but we don't actually know much about the situation. But I do think this highlights the potential disconnects between mental health & business, publicity & success, and success & happiness. The internet can seem so intimate but ultimately it's a thin view of an individual's or company's reality. (thx, dawn)
Update: The company's fortunes are looking up after a pair of Dutch entrepreneurs bought it. More here.
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Important note: The NY Times has retracted the story at the heart of their award-winning Caliphate podcast. The alleged terrorist they interviewed has been charged by the Canadian government for perpetrating a terrorist hoax.
For the past several weeks, I have been listening to the NY Times' fantastic and unsettling podcast series Caliphate. The series follows Times foreign correspondent Rukmini Callimachi as she attempts to figure out the inner workings of ISIS. Callimachi and her producer & fellow reporter Andy Mills talk to an Islamic State member from Canada about how he was recruited, investigate the group's organization, and dig through documents left behind by ISIS as they were driven out of Mosul in July 2017. The podcast is quite upsetting and tough to listen to at times, but I highly recommend doing so.
Here are a few things I kept thinking about while listening:
1. The recruitment process is fascinating. As Callimachi and the recruit talk about how he was persuaded to join up, you can see how young people are enticed by the promise of an Islamic state, of living an ideologically pure life according to one's religion. What the ISIS recruiters tell them makes sense, it's logical. (It's all the things they don't tell them...therein lies the rub.)
2. The eerie parallels between ISIS and an American business. They've got the onboarding process and the rapid expansion plan of a startup like Uber (down to the "ask forgiveness, not permission" tactics). They use tools like YouTube, Tumblr, and Twitter to market themselves with professionally produced videos and marketing materials. When they seized power in an area, ISIS kept much of the existing bureaucracy in place and set about winning hearts and minds by improving services for the people living there.
The world knows the Islamic State for its brutality, but the militants did not rule by the sword alone. They wielded power through two complementary tools: brutality and bureaucracy.
ISIS built a state of administrative efficiency that collected taxes and picked up the garbage. It ran a marriage office that oversaw medical examinations to ensure that couples could have children. It issued birth certificates — printed on Islamic State stationery — to babies born under the caliphate's black flag. It even ran its own D.M.V.
The documents and interviews with dozens of people who lived under their rule show that the group at times offered better services and proved itself more capable than the government it had replaced.
In the podcast, they talked to residents living in ISIS-controlled areas who say that garbage collection and availability of electricity improved after ISIS took over.
As the group grew, they diversified their income:
One of the keys to their success was their diversified revenue stream. The group drew its income from so many strands of the economy that airstrikes alone were not enough to cripple it.
Ledgers, receipt books and monthly budgets describe how the militants monetized every inch of territory they conquered, taxing every bushel of wheat, every liter of sheep's milk and every watermelon sold at markets they controlled. From agriculture alone, they reaped hundreds of millions of dollars. Contrary to popular perception, the group was self-financed, not dependent on external donors.
More surprisingly, the documents provide further evidence that the tax revenue the Islamic State earned far outstripped income from oil sales. It was daily commerce and agriculture — not petroleum — that powered the economy of the caliphate.
ISIS was in some ways a model business: adept at PR and marketing, focused on the financial bottom line, sweated the details, and they wanted to keep their "customers" happy.
3. The stated goal of ISIS in establishing a caliphate — to turn back the cultural clock to the time of Muhammad — reminded me slightly of similar efforts here in the US: MAGA, etc.
The podcast is available at Apple or on Spotify. If you are a NY Times subscriber, you get early access to episodes.
See also a 5-minute history of the war in Syria and the rise of ISIS and my past recommendation of the Slow Burn podcast.
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The always pertinent Ben Thompson considers Apple and Amazon (plus Facebook and Google) and how they each focus on customers. He starts by wondering which of these companies has the best chance at hitting the one trillion market cap first. Focusing on the first two, he offers this interesting comparison.
I mean it when I say these companies are the complete opposite: Apple sells products it makes; Amazon sells products made by anyone and everyone. Apple brags about focus; Amazon calls itself "The Everything Store." Apple is a product company that struggles at services; Amazon is a services company that struggles at product. Apple has the highest margins and profits in the world; Amazon brags that other's margin is their opportunity, and until recently, barely registered any profits at all. And, underlying all of this, Apple is an extreme example of a functional organization, and Amazon an extreme example of a divisional one.
Two very different business operating in very different ways.
Both, taken together, are a reminder that there is no one right organizational structure, product focus, or development cycle: what matters is that they all fit together, with a business model to match. That is where Apple and Amazon are arguable more alike than not: both are incredibly aligned in all aspects of their business. What makes them truly similar, though, is the end goal of that alignment: the customer experience.
I'll skip over much of his section on disruption and Clayton Christensen but if you don't already know about his take on the matter, have a look at his thorough analysis of Apple vs the disruption theory. Basically, the theory doesn't account for user experience and Apple manages to not overshoot the price customers want to pay because it understands the value its superior user experience provides.
Apple seems to have mostly saturated the high end, slowly adding switchers even as existing iPhone users hold on to their phones longer; what is not happening, though, is what disruption predicts: Apple isn't losing customers to low-cost competitors for having "overshot" and overpriced its phones. It seems my thesis was right: a superior experience can never be too good — or perhaps I didn't go far enough. (Emphasis mine.)
Thompson then looks at Amazon's focus on custom experience, including an important aspect which Bezos explained in his most recent letter to shareholders.
One thing I love about customers is that they are divinely discontent. Their expectations are never static — they go up. It's human nature. We didn't ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a better way, and yesterday's 'wow' quickly becomes today's 'ordinary'. [...] (Emphasis mine.)
What is amazing today is table stakes tomorrow, and, perhaps surprisingly, that makes for a tremendous business opportunity: if your company is predicated on delivering the best possible experience for consumers, then your company will never achieve its goal.
By focusing on user experience, Amazon is constantly aiming higher and never overshooting what customers want to pay, thus making itself very hard to disrupt.
He closes with Facebook and Google who are focused on advertisers, which makes them less (end)user focused and less popular.
Both, though, are disadvantaged to an extent because their means of making money operate orthogonally to a great user experience; both are protected by the fact would-be competitors inevitably have the same business model.
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This Mckinsey piece summarizes some of Ajay Agrawal thinking (and book) on the economics of artificial intelligence. It starts with the example of the microprocessor, an invention he frames as "reducing the cost of arithmetic." He then presents the impact as lowering the cost of the substitute and raising the value of the complements.
The third thing that happened as the cost of arithmetic fell was that it changed the value of other things—the value of arithmetic's complements went up and the value of its substitutes went down. So, in the case of photography, the complements were the software and hardware used in digital cameras. The value of these increased because we used more of them, while the value of substitutes, the components of film-based cameras, went down because we started using less and less of them.
He then looks at AI and frames it around the reduction of the cost of prediction, first showing how AIs lower the value of our own predictions.
... The AI makes a lot of mistakes at first. But it learns from its mistakes and updates its model every time it incorrectly predicts an action the human will take. Its predictions start getting better and better until it becomes so good at predicting what a human would do that we don't need the human to do it anymore. The AI can perform the action itself.
The very interesting twist is here, where he mentions the trope of "data is the new oil" but instead presents judgment as the other complement which will gain in value.
But there are other complements to prediction that have been discussed a lot less frequently. One is human judgment. We use both prediction and judgment to make decisions. We've never really unbundled those aspects of decision making before—we usually think of human decision making as a single step. Now we're unbundling decision making. The machine's doing the prediction, making the distinct role of judgment in decision making clearer. So as the value of human prediction falls, the value of human judgment goes up because AI doesn't do judgment—it can only make predictions and then hand them off to a human to use his or her judgment to determine what to do with those predictions. (emphasis mine)
This is pretty much exactly the same thing as the idea for advanced or centaur chess where a combination of human and AI can actually be more performant than either one separately. We could also link this to the various discussions on ethics, trolley problems, and autonomous killer robots. The judgment angle above doesn't automatically solve any of these issues but it does provide another way of understanding the split of responsibilities we could envision between AIs and humans.
The author then presents five imperatives for businesses looking to harness AIs and predictions: "Develop a thesis on time to AI impact; Recognize that AI progress will likely be exponential; Trust the machines; Know what you want to predict; Manage the learning loop." One last quote, from his fourth imperative:
The organizations that will benefit most from AI will be the ones that are able to most clearly and accurately specify their objectives. We're going to see a lot of the currently fuzzy mission statements become much clearer. The companies that are able to sharpen their visions the most will reap the most benefits from AI. Due to the methods used to train AIs, AI effectiveness is directly tied to goal-specification clarity.
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The other day I observed that whenever a new issue of the Noticing newsletter goes out, a bunch of people unsubscribe. When this happens each week I panic a little, so I asked other newsletter writers if this happened to them too. And it does.
In the ensuing thread, a former Twitter employee chimed in to say that "the single biggest correlation with people unfollowing an account [on Twitter] was whenever an account tweeted anything at all". And someone else chimed in with "historically the biggest problem of newspaper subscriptions: physical delivery of the damn things leads to churn!" I also remarked that this reminded me of Jon Bois' amazing Chart Party episode on Barry Bonds, where he concludes (spoilers!) that in 2004, Bonds would have finished with essentially the same on-base percentage if he hadn't used a bat for the entire season.
Newsletters you're better off not sending, newspapers you shouldn't publish, and pitches you should never swing at. Was WOPR right in WarGames? Is the only winning move not to play?
Global thermonuclear war notwithstanding, this issue highlights the need to keep in mind why you're playing a particular game in the first place. I often return to something that Ludicorp (makers of Flickr) had on their about page from a book by Charles Spinosa et al. about the goal of business:
Business owners do not normally work for money either. They work for the enjoyment of their competitive skill, in the context of a life where competing skillfully makes sense. The money they earn supports this way of life. The same is true of their businesses. One might think that they view their businesses as nothing more than machines to produce profits, since they do closely monitor their accounts to keep tabs on those profits.
But this way of thinking replaces the point of the machine's activity with a diagnostic test of how well it is performing. Normally, one senses whether one is performing skillfully. A basketball player does not need to count baskets to know whether the team as a whole is in flow. Saying that the point of business is to produce profit is like saying that the whole point of playing basketball is to make as many baskets as possible. One could make many more baskets by having no opponent.
The game and styles of playing the game are what matter because they produce identities people care about. Likewise, a business develops an identity by providing a product or a service to people. To do that it needs capital, and it needs to make a profit, but no more than it needs to have competent employees or customers or any other thing that enables production to take place. None of this is the goal of the activity.
The people who work for newspapers want to provide their readers with high quality information.1 Barry Bonds wants to play baseball, be competitive, and provide entertainment to the fans instead of standing bat-less in the batter's box; the Giants & MLB presumably want those things as well. With my efforts here and with the newsletter, I'm not playing a subscriber or profits maximization game — I want to share my ideas & information that I find and connect with people. This isn't to say that you shouldn't keep your eye on how much money you make or how many subscribers you've got for a relatively new newsletter,2 but keeping your purpose firmly in mind while you do those things is of paramount importance. Otherwise you're just stalemating yourself.
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From visual journalist Fritz Schumann, a short, poignant documentary on Hoshi Ryokan, a Japanese hotel built on a hot springs that has been run by the same family for 1300 years, making it the oldest running family business in the world.
This ryokan (a traditional japanese style hotel) was built over a natural hot spring in Awazu in central Japan in the year 718. Until 2011, it held the record for being the oldest hotel in the world.
Houshi Ryokan has been visited by the Japanese Imperial Family and countless great artists over the centuries. Its buildings were destroyed by natural disasters many times, but the family has always rebuilt. The garden as well as some parts of the hotel are over 400 years old.
The ryokan is now on its 46th generation of ownership. As you might expect, the changing role of the family in Japanese society has put the future succession of the hotel to the next generation in jeopardy. (via open culture)
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Warren Buffett's net worth is right around $84 billion. Each morning before he drives himself to work, he tells his wife how much his McDonald's breakfast is going to cost — $2.61, $2.95, or $3.17 — and she puts the exact change in the cup holder for him to pay with. No, really:
That's a clip from the HBO documentary, Becoming Warren Buffett. The full documentary is here.
On Medium, Daniel Bourke shared some things he learned from watching Becoming Warren Buffett.
Bill Gates and Warren Buffett are two of the richest men in the world.
One time Warren was at Bill's house for dinner and Bills dad asked them to write down on a piece of paper what was one word to describe their success.
Focus.
They both wrote down the exact same word.
(via gruber)
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My pal Dennis Crowley, co-founder of Foursquare, has somehow found the time to also co-found a NPSL soccer club in Kingston, NY called Kingston Stockade FC. The club is only two years old, but they won their division this year, energized a community around the team, and have nearly reached the financial break-even point for 2017...you can read all about it in Crowley's recap of how the team did in 2017. (And you can read his past writing about building the club from scratch.)
According to another club owner, year two was supposed to be more difficult than the first year...but that was not Crowley's experience:
About a year ago, I remember talking to another owner of another club and he said something along the lines of "I know you had a great first season, but the second season is the hardest" — e.g. the novelty will wear off, the crowds will thin, etc. I remember being scared shitless by this piece of advice but our club experienced quite the opposite. Our overall attendance numbers were up (despite us having one fewer match on the schedule) and our biggest crowds were considerably larger than last year's bigger crowds (and we hit our goal of 1000+ fans/game... twice!)
That stuck with me as I read the rest of the piece (which is written in plain, straightforward prose that's perfectly readable even if you aren't into soccer or business). I began gathering reasons as to why Stockade FC has thrived when other clubs might how found it difficult and framed them as lessons for anyone who runs a business or is in a leadership position.
1. The first thing is Crowley's obvious enthusiasm and passion for soccer, starting a business, and his Kingston community (he and his family split their time between Kingston and NYC). No specific excerpt for this one (aside from this photo)...it's infused throughout everything he's written about the experience.
2. Be relentless. Sweat the details. Track everything you can. Look for opportunities everywhere to increase revenue and decrease expenses. Be practical. This is just one example of many:
Our hotel costs were ZERO because we designed our schedule so that we would not have an overnight trip. If you remember from last year, we did a 3 day / 2 night / 2 match trip through New Hampshire and Maine (aka: 2 nights in a hotel + 3 meals * 14 rooms). Dropping this trip from the schedule saved us a fortune. To say this another way: Our current business model (tickets/sponsors/merch) supports "day-trips by bus" and not "overnight trips and/or flights".
3. Look for opportunities to build and grow from above:
With that said, and before we get real deep into Stockade FC data, I'm happy to share that this past weekend I was elected to the NPSL's Board of Directors at our league's Annual Operating Meeting (AOM). I am now one of 12 Board Members (and one of 2 representatives of the Northeast Region) operating under a two-year term. The Board Seat gets me a little closer to the bigger-picture decision making and the longer-team strategic planning for our league. It is literally the "seat at the table" I was referring to above and I'm excited to get back to work helping to build from the bottom up.
4. Look for opportunities to build and grow from below:
This is important to the club because a break-even club can operate forever. And this is important to me because I know that if we we can keep Stockade FC going for 10 years, we will have the opportunity to see the kids that we have inspired this season & last season trying out for our squad in a few years time. The idea of a Stockade FC squad full of kids who have been cheering on our club since they were 8, 10, or 12 years old is one of the things that motivates and inspires me the most about this entire project.
5. Do the right thing and often you'll notice it's a good business decision as well.
Game Day expenses were down 15% because we stopped buying bottled water for every match and instead started used refillable 10 gallon Gatorade jugs. A win for Mother Earth is a win for Stockade FC! (Btw, getting off plastic bottles, and the waste they produced, was an explicit goal of ours for this season.)
6. Acknowledge that you cannot do it alone. Crowley and his team bring some serious leadership and expertise to the table, but Stockade FC runs on volunteers from the community. Embrace them and don't take them for granted.
And it's impossible to talk about Stockade FC without talking about our $0 "Staff" costs. Our entire club is run by volunteers — sometimes an army of 30+ people who show up on game days to help with everything from setup + take down + scoreboard + clock + merchandise + tickets + managing the crowd + leading the youth teams at halftime + emceeing the halftime show + singing the national anthem + announcing on the PA + doing color commentary on the live stream + 100 other tasks. Without you all none of this would come together in the way that it does, so thank you! #WeAreStockade
7. I don't know what business lesson this holds, but this is the perfect little detail about the club:
Our ticket prices were designed so a family of four can attend for $20 ($8 + $8 + $2 + $2 = $20). This is one of the many things I'm *really, really* proud of.
8. Don't skimp where it matters and give back. Too many comp tickets for player's families or first responders isn't going to make or break your season.
It's worth noting that less than 10% of attendance for any given is from comp tickets. This year we gave comp tickets to (a) press, (b) players family (4 tix max), (c) ballboys and ballgirls, (d) Radio Woodstock contest winners, (e) First Responder & Military Appreciation Nights.
9. "Think globally, act locally" isn't just for activism. Stockade FC streamed their games online and sold merch to people from around the world. Their story is resonating around the country and the world. Hell, I live 300 miles away and I'm gonna try my damnedest to make it to a Stockade FC home game this summer.
Streaming continues to be an important part of the Stockade FC story — we know our story is being followed by people outside the Hudson Valley (and outside the USA!) and so streamed matches that are *enjoyable to watch* are a core part of our story.
10. Small teams can act big. The same forces that allowed Instagram's 13-person company to get acquired by Facebook for $1 billion enable small teams to produce, for instance, a live-streaming experience that rivals the big networks for not a whole lot of money and effort.
And this year, our rockstar team of tech-savvy volunteers has raised the bar for what it means to stream a 4th Division soccer game. Last year's goals were about "consistency" — "we gotta stream every match". This year's goals were around "professionalism" — let's work in on-air graphics, color commentary and multiple cameras. The team officially outdid themselves when we had live video streaming from a drone during our Conference Championship match (for serious!)
11. Have larger goals that are outside the strict purview of your business. The goal of the US men's national team winning a World Cup in the next 30 years isn't going to sell more tickets, but having that as part of your story is going to open up opportunities for your club and everyone else.
Do something to make USA soccer better, faster. We started our club because we ultimately want to make soccer in the United States better, faster. (My original back-of-a napkin goal was: "What can we as fans do to better the US Mens National Team's odds of winning a World Cup in our lifetime").
12. Get involved in your local community. But not just that, actually give a damn about your local community and the people and other businesses in it. With everyone working together, you raise all the boats. Non-zero sum games, yo!
On some level, we've done much much more than "create a soccer team" — we've built something that folks in Kingston have started to rally around and are proud of, and we've helped to leverage some of that momentum and excitement and energy into a mechanism that could transform parts of Kingston's actual urban infrastructure (through this $10M grant). We're just a tiny, tiny, tiny part of the grant... but, hey, we're a part of it!
13. Celebrate when successful team members move on to bigger opportunities. Build a team that people want to be a part of because they can develop the skills to move up (either inside your team or outside of it).
Last season, Stockade FC midfielder Dylan Williams got picked up by Australian 2nd division club Launceston City FC. This year, goalkeeper David Giddings got picked up by Swedish 3rd division team Värnamo Södra. Two players from our 2016 squad (Matel Anasta & Matt Koziol) were invited to play in last year's NPSL Showcase (aka: NPSL All-Star Game w/ scouts) and we've expecting 1 or 2 players from our 2017 team will be invited to play in next year's Showcase.
14. Success begets success. Winning the league obviously helped attendance and raised the team's profile locally and nationally. But winning the league started with hiring the right coaches and finding the right players...and that started with all the other things on this list. It all connects.
15. Share your knowledge with others. From the start, one of Crowley's goals has been to run a completely transparent club. He shares every single detail and the club's finances are an open book. He writes clearly and enthusiastically without a lot of jargon. Move past thinking that other teams are your competition and start thinking about how everyone can work together to achieve larger goals by sharing what works and what doesn't with each other. Compete on the field but collaborate in the community.
As a tiny business owner without employees or a real-world presence, some of this doesn't apply to me, but I've found Crowley's posts about Stockade FC incredibly valuable not when thinking about kottke.org from a business perspective but also when considering larger questions about how I want to live my life. Thanks, Dennis!
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I don't know when this ran, but I liked this brief article published in Private Eye magazine called Zuckerberg Announces Revolutionary New Foundation to Eliminate Disease.
The genius founder of Facebook, Mark Zuckerberg, has announced an inspiring new foundation to which he and his wife will donate huge amounts of their fortune in a bid to defeat all disease over the next century.
"It's called the government," said Mr. Zuckerberg. "For such a long time I've been pondering how I can make a real difference with the enormous fortune I've amassed by concocting clever tax structures that minimise any tax liability from my firm.
"Imagine my shock when it turned out that this 'government' is devoted to ending disease. Not only that, it also has side projects dedicated to running schools, hospitals, a road system, parks, a national infrastructure, and lots of other worthy projects which make this planet a decent place to live.
I'm proud to announce that I'll be giving lots of money to the 'government', as I've decided to call it, and I fully expect to get a lot of really fantastic publicity out of it."
This reminded me of a pair of similar essays: I am an American conservative shitheel and I am an American liberal shitheel. (via @paulpod)
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I loved this short profile of RXBAR founder Peter Rahal. He and his partner recently sold the company to Kellogg's for $600 million. Some highlights:
- Each partner invested $5000 in the business...and they took no other outside investment. Yep, 0 to $600 million in about five years with no VC.
- Early on, when asking about getting investors, Rahal's dad told him "You need to shut up and sell 1,000 bars." Is that the best and most succinct business advice ever?
- They designed the packaging for their first bar in PowerPoint...and Rahal put his cell phone number on it. Whatever it takes.
(via @jasonfried)
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Voracious reader Tyler Cowen recently visited an Amazon Store for the first time and posted some impressions.
1. It is a poorly designed store for me, most of all because it does not emphasize new releases. I feel I am familiar with a lot of older titles, or I went through a more or less rational process of deciding not to become familiar with them. Their current popularity, as measured say by Amazon rankings, does not cause me to reassess those judgments. For me, aggregate Amazon popularity has no real predictive power, except perhaps I don't want to buy books everyone liked. "A really smart person says to consider this again," however, would revise my prior estimates.
6. I consider myself quite pro-Amazon, still to me it feels dystopic when an attractive young saleswoman says so cheerily to (some) customers: "Thank you for being Prime!"
Some of his observations match those of other reviewers from when the store opened back in May. On my last trip to NYC, I visited the same store as Cowen (also for the first time) and it didn't change my opinion about the visibility of the data in the store:
Other bookstores have books arranged according to best-seller lists, store-specific best-sellers, and staff recommendations, but I've never seen any store layout so extensively informed by data and where they tell you so much about why you're seeing each item. Grocery store item placement is very data driven, but they don't tell you why you're seeing a display of Coke at the end of the aisle or why the produce is typically right at the entrance. It'll be interesting to see if Amazon's approach works or if people will be turned off by shopping inside a product database, a dehumanizing feeling Frommer hints at with "a collection of books that feels blandly standard" when compared to human curated selections at smaller bookstores.
Walking around, I half-expected to see SQL queries accompanying some of the displays — "SELECT * FROM books WHERE rating > 4.8 AND pub_year = 2017 ORDER BY number_sold". Amazon definitely needs to figure out how to get a little weird into their stores, a little of the human touch. Toning down the data talk would help. A more casual typeface might work too — not Comic Sans but perhaps something at least approaching handwritten? They've got so so much data about how people buy books...they just need to be more clever about how they slice and dice it. Maybe look for books that exhibit the Napoleon Dynamite Problem? Find people with interesting wishlists?
Ultimately, I didn't buy anything either.
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In a reply to an article called Entrepreneurs Aren't A Special Breed — They're Mostly Rich Kids, Hacker News commenter notacoward wrote:
Entrepreneurship is like one of those carnival games where you throw darts or something.
Middle class kids can afford one throw. Most miss. A few hit the target and get a small prize. A very few hit the center bullseye and get a bigger prize. Rags to riches! The American Dream lives on.
Rich kids can afford many throws. If they want to, they can try over and over and over again until they hit something and feel good about themselves. Some keep going until they hit the center bullseye, then they give speeches or write blog posts about "meritocracy" and the salutary effects of hard work.
Poor kids aren't visiting the carnival. They're the ones working it.
That's a pretty succinct summary of the "born on third base and thinks they hit a triple" effect...and it doesn't just apply to entrepreneurship or being rich.
Update: In response to Forbes' most recent 30 Under 30 feature, Helen Rosner replied:
My take is: all 30 Under 30 lists should include disclosure of parental assets
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For Fast Company, David Zax wrote about the Casper mattress company suing mattress-reviewing bloggers over their affiliate marketing relationships.
As Casper flourished through 2014 and early 2015, I learned, it enjoyed a mutually beneficial relationship with Sleepopolis and similar sites. For many bloggers, in fact, Casper was among the first mattress companies to offer affiliate commissions, leading its competitors to respond in turn. The reviews sites were key parts of what marketers call the "purchase funnel," converting a vague interest in mattresses into awareness of a specific brand, and often the decision to buy it. Many consumers were Googling terms like "best mattress," landing on sites like Sleepopolis, and learning about e-tailers like Casper for the first time.
Indeed, one would never have predicted looming lawsuits from a friendly 2015 email exchange, in which Casper CEO Philip Krim attempted to court an affiliate marketer named Jack Mitcham, who ran a Sleepopolis-like site called Mattress Nerd.
In January 2015, Krim wrote Mitcham that while he supported objective reviews, "it pains us to see you (or anyone) recommend a competitor over us."
Krim went on: "As you know, we are much bigger than our newly formed competitors. I am confident we can offer you a much bigger commercial relationship because of that. How would you ideally want to structure the affiliate relationship? And also, what can we do to help to grow your business?"
I was just thinking the other day about how these companies like Casper formed to undercut the price gouging mattress stores and now, with millions of VC dollars behind them, they're pulling their own brand of underhanded tricks to manipulate people into buying their products. In five years, Casper will probably have dozens of retail stores and 10 different kinds of mattress at different price points — they already have more than a dozen stores and 3 models ranging from $600 to $1850 — just like the companies they are trying to replace. Their origin story won't matter...VC-fueled marketing will paper over all of that and, tada, meet the new boss, same as the old boss.
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Apple is the biggest company in the world and they sell one of history's most successful consumer products. As the total human population of Earth becomes a limiting factor in the iPhone's continued sales growth (see also Facebook), they are perhaps running into problems designing a desirable product that they need to produce 200 million times over the course of a year.
This is one of those areas where Apple may be the victim of its own success. The iPhone is so popular a product that Apple can't include any technology or source any part if it can't be made more than 200 million times a year. If the supplier of a cutting-edge part Apple wants can only provide the company with 50 million per year, it simply can't be used in the iPhone. Apple sells too many, too fast.
A Daring Fireball reader put it this way:
People commonly think that scale is an unambiguously good thing in production, but the tremendous scale at which Apple operates shows this not to be the case. Annual iPhone production is so large that Apple is likely experiencing diseconomies of scale, a phenomenon one doesn't often hear about. What significant, break-through technology can a company practically introduce to 300 million new devices in a year?
Diseconomies of scale is a real thing, btw. John Gruber has been arguing that Apple's way around this is to produce a more expensive iPhone ($1000-1200) with exceptional components and features that the company simply can't produce at a scale of 200 million/year. Rene Ritchie describes this iPhone++ strategy as "bringing tomorrow's iPhone to market today". Gruber compares it to the Honda Prelude, quoting from the Edmunds description of the car:
Honda established itself in America with the Civic and Accord — both good, solid but basic cars. But big profits in the automotive world don't come from basic cars that sell for commodity prices. Those profits come from cars that get consumers so excited that they'll pay a premium price just to have one. The Prelude was Honda's first attempt at an exciting car.
The Prelude was Honda's technological leading edge. Features that are now expected from Honda, like the double-wishbone suspension under the Accord, fuel injection, and VTEC electronic variable valve timing system showed up first on the Prelude before migrating across the Honda line (though VTEC first showed up on the 1990 Acura NSX).
Keen observations all around and it will be interesting to see if Apple can benefit from this strategy.
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Need an idea for a viable startup company? Try this:
1) Pick an industry
2) Ask someone in that industry what they use spreadsheets for
3) Build something better
To which I would add:
4) Charge for it
You could even modify #2 slightly and replace "spreadsheets" with "email"...Slack did that generally and is reaping the benefits.
This reminds me of Marc Hedlund's advice for entrepreneurs from 2007:
One of my favorite business model suggestions for entrepreneurs is, find an old UNIX command that hasn't yet been implemented on the web, and fix that. talk and finger became ICQ, LISTSERV became Yahoo! Groups, ls became (the original) Yahoo!, find and grep became Google, rn became Bloglines, pine became Gmail, mount is becoming S3, and bash is becoming Yahoo! Pipes. I didn't get until tonight that Twitter is wall for the web. I love that.
To which I added:
A slightly related way of thinking about how to choose web projects is to take something that everyone does with their friends and make it public and permanent. (Permanent as in permalinked.)
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Produced by Square, Made In Iowa tells the story of what happened after the Electrolux plant closed in the small town of Webster City, Iowa in 2011. The company had decided to move those jobs to Mexico and in the years after the closing, the unemployment rate in the town rose from about 3% to 10%. The video shows how the town rallied around the reopening of the movie theater and pursued an entrepreneurial strategy of revitalizing downtown through opening a number of small businesses. That approach brought the town's unemployment rate back up to 3%.
But that's not the entire story. The new jobs are mostly non-union and pay less than Electrolux jobs did. The town's pivot was not entirely a bootstrap effort...the former workers had the government's assistance and the advantage of their union's negotiation of benefits. From a 2013 NPR story about the plant closure:
On March 31, 2011, Electrolux shut its washer-dryer plant in Webster City and sent the jobs to Juarez, Mexico. The employees were warned more than a year in advance of the closure, and many used the time to pay off debt and begin thinking about a new career.
Because their jobs had left the country, the laid-off workers qualified for federally funded retraining. A large number enrolled in two-year programs at community colleges and have been living off unemployment benefits as they learn new skills.
And those new businesses downtown are possible in part because people have access to healthcare through the ACA.
It seems relevant at this point to mention that in the 2016 election, the county in which Webster City is situated went for Trump 58.6% (to Clinton's 35.8%). I mean, bootstrap all you want, but just don't forget the massive governmental safety net that makes it possible for communities to recover when shit like this goes down and which party wants to dismantle it.
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Jay-Z has a new album out today called 4:44 and it's available exclusively on the streaming music service he owns, Tidal. But that's not the only catch. To hear the album, you need have been a Tidal customer before today or you need to switch your mobile service to Sprint (or be a current Sprint customer).
This is all part of Tidal's $200 million deal with Sprint and it makes very little sense to me. It's a nice extra for current Sprint subscribers, but I can't imagine that many people are going to sign up for Sprint just to hear an album. And Tidal's gonna get a bunch of pissed-off first-time subscribers who will sign up thinking they'll have access to the album but, oops!, they actually don't. Dumb.
Rumor has it the exclusive is only for a week and then it'll be elsewhere...which seems like a lot of fuss for very little reward.
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Amazon's New Customer is a really great analysis by Ben Thompson of Amazon's strategy and why Amazon bought Whole Foods: they purchased a new customer for Amazon infrastructure, not a retailer. Early on in the piece, Thompson lays this one on us:
Amazon's goal is to take a cut of all economic activity.
No qualifiers. All economic activity. In the world. Sort of a Dutch East India Company for the internet age. Thompson explains how they're going to do it and why fresh food is such a strategic hole for them.
As you might expect, given a goal as audacious as "taking a cut of all economic activity", Amazon has several different strategies. The key to the enterprise is AWS: if it is better to build an Internet-enabled business on the public cloud, and if all businesses will soon be Internet-enabled businesses, it follows that AWS is well-placed to take a cut of all business activity.
On the consumer side the key is Prime. While Amazon has long pursued a dominant strategy in retail — superior cost and superior selection — it is difficult to build sustainable differentiation on these factors alone. After all, another retailer is only a click away.
This, though, is the brilliance of Prime: thanks to its reliability and convenience (two days shipping, sometimes faster!), plus human fallibility when it comes to considering sunk costs (you've already paid $99!), why even bother looking anywhere else? With Prime Amazon has created a powerful moat around consumer goods that does not depend on simply having the lowest price, because Prime customers don't even bother to check.
This, though, is why groceries is a strategic hole: not only is it the largest retail category, it is the most persistent opportunity for other retailers to gain access to Prime members and remind them there are alternatives. That is why Amazon has been so determined in the space: AmazonFresh launched a decade ago, and unlike other Amazon experiments, has continued to receive funding along with other rumored initiatives like convenience store and grocery pick-ups. Amazon simply hasn't been able to figure out the right tactics.
When I heard about the Whole Foods deal, the first thing I thought about was Amazon Go. The company has been trying to experiment with different retail environments, but without the proper scale, it doesn't make a lot of sense. Whole Foods gives them a chance to develop their fresh food delivery infrastructure at scale...so that they can offer it to other customers just like they do with AWS.
P.S. Whenever I think about Amazon as a business, I recall this 2012 post by Eugene Wei on Amazon's low-margin strategy. I suspect Thompson's post will join it in my thoughts.
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Over the past couple of years, Foursquare has used their location data to accurately predict iPhone sales and Chipotle's sales figures following an E. coli outbreak. Their latest report suggests that leisure tourism to the United States was way down year-over-year over the past 6 months (relative to tourism to other countries).
Our findings reveal that America's 'market share' in international tourism started to decline in October 2016, when the U.S. tourism share fell by 6% year-over-year, and continued to decrease through March 2017, when it dropped all the way to -16%. Currently, there is no sign of recovery in the data.
And business travel to the US is suffering as well, relative to other countries:
Business trip activity is up in the U.S. by about 3% (as a share of international traveler global activity), but that trend line is not as high as elsewhere in the world, where YoY trends are closer to 10%. Relative to business travel gains globally, business travel to the U.S. is suffering.
As Foursquare notes, correlation is not causation and there are other factors at play (e.g. a stronger US dollar), but it's not difficult to imagine that our xenophobic white nationalist administration and its travel & immigration policies have something to do with this decline.
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Jim Kovaleski is a nomadic gardener — he refers to what he does as "portable farming" at one point — who moves from place to place, renting out people's yards to grow produce, which he then sells to stores and markets.
This nomadic gardener travels between Maine to Florida gardening leased front yards. With a frugal lifestyle and revenues as high as $1.5K a week, he's living the dream.
That's pretty cool. I have space for a garden at my place...I wonder if anyone local wants to farm it in exchange for some fresh produce? (via bb)
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Two years ago, Facebook COO and Lean In author Sheryl Sandberg lost her husband to an unexpected death. The loss left her bereft and adrift. Grieving hard, she struggled to figure out how to move forward with her life. The result of her journey is a book co-authored by Adam Grant called Option B: Facing Adversity, Building Resilience and Finding Joy.
After the sudden death of her husband, Sheryl Sandberg felt certain that she and her children would never feel pure joy again. "I was in 'the void,'" she writes, "a vast emptiness that fills your heart and lungs and restricts your ability to think or even breathe." Her friend Adam Grant, a psychologist at Wharton, told her there are concrete steps people can take to recover and rebound from life-shattering experiences. We are not born with a fixed amount of resilience. It is a muscle that everyone can build.
Option B combines Sheryl's personal insights with Adam's eye-opening research on finding strength in the face of adversity.
Jessi Hempel's piece on Sandberg is a good overview on the book and that period in her life, particularly in relation to Sandberg's return to work and how that changed leadership & communication at Facebook.
Every year in late May, Facebook gathers its policy and communications team for a day-long retreat. Employees fly in from satellite offices in Germany, say, or Japan. It's a chance to address problems, and set strategy for the year to come.
Sandberg always speaks, but that year Caryn Marooney, who was then in charge of technology communications, remembers everyone told her she could skip it. She insisted on coming anyway. As 200 people looked on, she began telling the group what she was going through, and how it was. "There were a lot of tears. It was incredibly raw, and then she said, "I'm going to open it up to Q and A," Marooney remembers. People spoke up.
Talking about her situation allowed Sandberg — and the entire team — to move past it and transition into a productive conversation. Having acknowledged the proverbial elephant in the room, they could all focus on the work at hand. "I think people think that vulnerable is soft, but it's not," said Marooney, as she described Sandberg's tough approach to business questions that followed. "It was a blueprint of what we saw from Sheryl going forward."
Sandberg has also started a non-profit "dedicated to helping you build resilience in the face of adversity — and giving you the tools to help your family, friends, and community build resilience too."
See also Sandberg's Facebook post about her husband's death and her NY Times opinion piece How to Build Resilient Kids, Even After a Loss.
One afternoon, I sat down with my kids to write out "family rules" to remind us of the coping mechanisms we would need. We wrote together that it's O.K. to be sad and to take a break from any activity to cry. It's O.K. to be happy and laugh. It's O.K. to be angry and jealous of friends and cousins who still have fathers. It's O.K. to say to anyone that we do not want to talk about it now. And it's always O.K. to ask for help. The poster we made that day — with the rules written by my kids in colored markers — still hangs in our hall so we can look at it every day. It reminds us that our feelings matter and that we are not alone.
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Yesterday, a video of a man dragged from an overbooked United flight because he wouldn't give up his seat went viral. Public reaction to the incident and United's subsequent fumbling of the aftermath has resulted in UAL's stock falling several percentage points this morning:
The stock has rebounded slightly this afternoon and will probably fully recover within the next few weeks.
Also yesterday, a man walked into a San Bernardino elementary school and killed a teacher (his estranged wife) and an 8-year-old boy before shooting himself. The story has received very light national coverage, particularly in comparison to the United story. In response, the stock prices of gun companies were up a few percent this morning (top: American Outdoor Brands Corp which owns Smith & Wesson; bottom: Sturm, Ruger & Company):
This follows a familiar pattern of gun stock prices rising after shootings; Smith & Wesson's stock price rose almost 9% after the mass shooting in Orlando last year.
Update: It took about three and a half weeks, but on May 2, United's stock had regained all of the value "lost" due to the incident and subsequent PR blunders. As of this writing (May 3 at 12:41 PM ET), UAL is actually up about 3.5% from the closing price before the incident.
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From Ariel Aberg-Riger, a visual story for CityLab's series on power about how, for decades, Alabama purposely imprisoned young black men on trumped-up charges in order to rent them out as de facto slaves to the Tennessee Coal, Iron, and Railroad Company, which grew fat on the cheap, coerced labor.
TCI, as it was known — was wildly profitable. Period accounts attribute the company's booming success to the "sage" "energetic" "accomplished" entrepreneurial white developers of "intrepidity and public spirit" who capitalized upon the "admirable richness of the coal flora of Alabama." But the true key to TCI's "profits" lay in a deadly contract the company managed to negotiate with the state of Alabama in 1888.
(thx, david)
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How much money does an airline make on a typical flight in the various classes of service? On some flights, revenue from first & business class seats can be up to 5 times that of economy seats. This video explores the economics of airline classes and looks at how we got to the present moment, where the people and companies buying business class and first class tickets are subsidizing those of us who fly economy.
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Michael Bloomberg, billionaire business owner of Bloomberg and former three-term mayor of NYC, recently shared some advice with the NY Times on how to succeed in business.
What disturbs me is you talk to kids applying today and they invariably say, "I cured cancer, I brought peace to the Mideast." Spare me. How about, "My father never existed, my mother is a convicted drug dealer. I worked three shifts at McDonald's." That's the kind of kid I want - with an ethic of taking care of his family - because then he'll take care of others. Some of us don't have much prenatal intelligence, but nevertheless go out and try and have a decent chance of surviving. I'm not the smartest guy in the room, but nobody's going to outwork me.
About half of this advice seems useless to anyone who isn't already fantastically successful relative to most other people. Being fired from your bond trading firm with a $10 million severance is adversity now? See also survivorship bias.
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The Green Angels is a group of pot dealers that was started by a former fashion model named Honey (not her real name). Many of the dealers and dispatchers are also former models...or at least possess enough good looks and easy charm to talk their way out of trouble with NYPD officers.
Honey is clear-eyed about the nature of her operation: "I tell the girls, it's not a club; it's a drug ring." The whole business is run via text messages between her, the dispatchers in her headquarters, the runners who do the deliveries, and the customers. "I have carpal tunnel in my thumb from all the texting," Honey says. Dispatchers get 10 percent of each sale; the runners get 20 percent, which averages out to $300 or $400 a day. Several of them, according to Honey, "are paying off their NYU student loans."
Just like any other business, there are tricks of the trade and protocols to follow:
One of the Angels suggests using a tote bag instead of a backpack to carry the box. She generally uses a WNYC tote bag, which is given out to donors to the public-radio station. The other day, an old lady gave her a high five after seeing her tote. "I thought, If you only knew what I have in this bag," she says.
Honey tells the girls to get a work phone from MetroPCS, which costs $100. When buying it, they should pay in cash and have a name in mind to put down on the form, in case the police check. "I like to use the names of girls who were my enemies growing up," Honey says.
The business is organized and disciplined, which I suspect it needs to be if you don't want to get tossed in jail:
The Green Angels average around 150 orders a day, which is about a fourth of what the busiest services handle. When a customer texts, it goes to one of the cell phones on the table in the living room. There's a hierarchy: The phones with the pink covers are the lowest; they contain the numbers of the flakes, cheapskates, or people who live in Bed-Stuy. The purple phones contain the good, solid customers. Blue is for the VIPs. There are over a thousand customers on Honey's master list.
To place an order, a customer is supposed to text "Can we hang out?" and a runner is sent to his apartment. No calling, no other codes or requests. Delivery is guaranteed within an hour and a half. If the customer isn't home, he gets a strike. Three strikes and he's 86'd. If he yells at the runner, he's 86'd immediately.
The Angels work only by referral. The customers should refer people they really know and trust, not strangers, and no one they've met in a bar. If you refer someone who becomes a problem, Charley says, you lose your membership.
Really interesting throughout.
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French drone company Parrot recently announced significant layoffs and will shift focus away from their recreational drone business.
French company Parrot has had a rough year and missed its sales expectations. That's why the company will lay off 290 employees who were working on drones. In total, Parrot currently has 840 employees on the drone team and more than a thousand employees in total.
While the company isn't just selling drones, it represents a good chunk of the business. But it looks like other companies, such as DJI, are doing better in this market. Parrot expected to report $105.9 million in sales for 2016. It reported $90 million instead (€85 million vs. €100 million expected).
Even though the company is still selling quite a few drones, Parrot says that it doesn't generate healthy margins. So here's the new plan: focusing on commercial drones.
Well, this explains my holiday shopping difficulties with Parrot. Ollie asked for a drone for Christmas and after doing some research, I decided on the Parrot Swing. Amazon was out of stock, so I decided to buy directly from Parrot. They had stock and the site said they'd ship in plenty of time for Xmas. So I ordered one. The next day, I get a call from Parrot saying I need to "verify my order". So, I call them back, give them some info about my order and where it's being shipped and the very nice woman on the phone tells me that I'm all set and they're shipping it out.
Two days go by, no shipping confirmation email in sight. I get another voicemail: you need to call us to verify your order. I call back, give them the same info and tell them, oh by the way I've already done this once. Profuse apologies were offered, that was a mistake, and the very nice woman on the phone tells me she's going to tell the shipping people to send out my order "right away". It will still arrive in time for Xmas. The next day I get an email from Parrot:
Hello! We have refunded your order No. XXXXX-XXXXX placed 12/15/2016. We are sorry that your order did not meet your expectations and hope that you will visit us again.
Obviously, I am done with them at this point but still need that drone. Amazon is still out of stock, but Walmart has them. I order one, it arrives two days later (with free shipping), and on Christmas morning, after some reflection, Ollie says it was the best present Santa has ever gotten him.
I did quite a bit of holiday shopping this year...went a bit nuts making up for some not-so-great efforts the past two years. The kids and I shopped for Toys for Tots (twice), I bought gifts for them from me and from Santa, I bought non-holiday stuff like clothes for myself,1 and I shopped virtually for the gift guide. I shopped every which way: small, locally, at big box stores, and online at 4-5 different retailers. My main takeaway from that experience? Amazon is miles and miles and miles ahead of everyone else. It is not even close.
Sure, Walmart had the drone in stock, but when I'd tried shopping with them earlier in the month, the product page threw a 404 error. I switched to Safari and was able to put the item into my cart, but then a form in the ordering flow wouldn't work, so I had to get that item elsewhere. (When I did finally create an account while ordering the drone, Walmart thought my name was "Ashley"?!)
Target's site was so slow that it was nearly unusable (like 30-40 seconds for a product page to start loading). But I persevered because they had an item I really wanted that no one else had in stock. I got an email two days before Xmas saying they were out of stock and couldn't ship until Jan 4 at the earliest, but that if I still wanted the item, I would have to log in to my account to verify the new shipping date. I didn't want the item later, so I did nothing. Guess what arrived on my doorstep last week?
My troubles with Parrot I shared above. The local toy stores are expensive (Lego sets are $5-10 more than if you buy online) and ran out of popular items 2-3 weeks before Xmas. Very few online stores outside Amazon, Walmart, etc. had clear holiday shipping policies, so relying on them more than a week or two out was risky. Zappos was great (Amazon owns them) and Patagonia was pretty good, although their shipping estimates aren't that great and returns aren't free.
And Amazon? The site is always fast, I have never seen a 404'd product page, the URLs for their products haven't changed in almost 20 years,1 each product page was clearly marked with holiday shipping information, they showed the number of items in stock if they were running low, shipping was free (b/c I'm a Prime member), returns are often free, and the items arrived on time as promised. More than 20 years after the invention of online retailing, how is it that Amazon seems to be the only one that's figured all this out? How come massive companies like Walmart and Target, whose very businesses are under immense pressure from Amazon, can't get this stuff right despite having spent hundreds of millions on it? I'm not a financial analyst, but unless something changes drastically, Amazon is just going to continue to eat more and more of the US retail pie and at this point, with all these advantages they've accrued and their razor-sharp focus on low pricing, it's difficult to see how anyone is going to compete.1
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From this piece by Evan Williams, it sounds like Medium is still trying to figure out what it wants to be when it grows up.
So, we are shifting our resources and attention to defining a new model for writers and creators to be rewarded, based on the value they're creating for people. And toward building a transformational product for curious humans who want to get smarter about the world every day.
It is too soon to say exactly what this will look like. This strategy is more focused but also less proven. It will require time to get it right, as well as some different skills. Which is why we are taking these steps today and saying goodbye to many talented people.
I like Medium and read thoughtful & engaging stuff on there daily, including articles by the many publications that moved their entire publishing operations to Medium and who were caught off-guard by Williams' announcement:
As part of the strategic pivot, Medium will lay off 50 staffers and close its satellite offices in New York and Washington. It will also stop selling "Promoted Stories," its native ad unit, and distributing revenue from those sales to publishers.
Medium's exit from the online ad business was news to some of its publishing partners, many of whom have come to depend on the publishing platform as a key source of revenue. More than two dozen publications are members of Medium's revenue beta program, which allows them to sell paid subscriptions to readers and to receive a cut of Medium's native advertising revenue.
Five members of the revenue beta program told POLITICO that they did not receive any advance notice of Medium's change in strategy before Williams' public announcement. One publishing partner only learned about the pivot after reading an article about it on the tech news site Recode.
Over the past year, when I was thinking about how best to steward kottke.org into a financially stable future, moving to Medium was definitely an option. But never, in my mind, a very serious option. It was just too many eggs in one basket for a small publisher like me, especially when Medium is still obviously trying to figure out if they're even in the egg-carrying business. New businesses are unstable...that's just the way it is.1 In Silicon Valley (and in other startup-rich areas), these unstable businesses have lots of someone else's money to throw around — which makes them appear more stable in the short term — but they cannot escape the reality of the extreme risk involved in building a new business, particularly a business that needs to grow quickly (as almost all VC-backed startups are required to do). All of which can make it difficult to enter into a business arrangement with a startup...just ask publishers working with Facebook or businesses dependent on Twitter's API or Vine or Tumblr, not to mention the thousands of startups that have ceased to exist over the years.
With kottke.org, even though it hasn't been easy, I've opted for independence and control over a potential rocketship ride. Instead of moving the site to Medium or Tumblr or focusing my activities on one social network or another, I use third-party services like The Deck, Amazon Associates, Stripe, and Memberful that plug in to the site. Small pieces loosely joined, not a monolithic solution. If necessary, I can switch any of them out for a comparable service and am therefore not as subject to any potential change in business goals by these companies. Given the news out of Medium, I'm increasingly happy that I've decided to do it this way (with your very kind assistance).
Update: It's tough to hear about the small companies that put their faith in Medium and then got blindsided by their umpteenth pivot.
"Right now, we're very concerned about the future of our site's partnership with Medium," said Neil Miller, the founder of pop culture site Film School Rejects. "What we were sold when we joined their platform is very different from what they're offering as a way forward."
"It's almost as if Ev Williams wasn't concerned that he was pulling out the rug from underneath publishers who had placed their trust in his vision for the future of journalism," he said.
Update: Film School Rejects ended up jumping ship back to an independently hosted site.
Our story begins last May, when we joined the Medium platform as one of their first 12 premium publishers. This meant moving 10-years of content over to their platform, where we were promised a beautiful user experience and a way forward that would allow us to grow our business, continue to pay our writers, continue our growth as a publication, and ultimately keep FSR on the cutting edge. It was a great partnership, until Medium changed its mind about what kind of platform it wanted to be. At first, we were a part of a group of publishers that took a wait-and-see approach with Medium. As time went on, it became clear that Medium's priorities had shifted from being a platform for independent publishers to being itself a publisher of premium, subscription-based content. As we learned more about their future plans for the now-existent Medium 'Members Only' program, it became clear that our site wouldn't be able to continue to operate the way we always had.
This was an interesting side effect of their time at Medium:
When we moved to Medium, we stopped worrying about what would be popular and started focusing on what we wanted to talk about. And guess what? Readers continued to follow us. So we're going to continue to allow our very talented team to write freely. We'll continue to deliver passionate, thoughtful, topical, and sometimes well-marketed articles.
I've never been that interested in chasing clicks because The Deck (the advertising network I used for 10 years) was not strictly based on clicks or pageviews. Even so, thinking about what sorts of posts might attract more attention than others was a growing consideration for me as traffic fell off the past few years. After launching memberships back in November, I feel as though I'm slowly trending back towards caring less about attention and more about writing for myself and the members. And lo and behold, traffic is up slightly since then.
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Some interesting speculation from Evan Puschak on what Amazon is up to with Amazon Go. Basically, Puschak thinks Amazon Go is Amazon Web Services but for retail stores. In the same way that AWS provides hosting for sites like Netflix and Reddit, Amazon Go will provide patent-protected technology infrastructure for "self-shopping" supermarkets and retail stores. But it remains to be seen whether it's more like their one-click patent, which was licensed by a few others (notably Apple) but everyone else was able to do without it.
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Amazon Go grocery stores will let you walk in by swiping an app, grab whatever you need, and just walk right out the door again.
Our checkout-free shopping experience is made possible by the same types of technologies used in self-driving cars: computer vision, sensor fusion, and deep learning. Our Just Walk Out technology automatically detects when products are taken from or returned to the shelves and keeps track of them in a virtual cart. When you're done shopping, you can just leave the store. Shortly after, we'll charge your Amazon account and send you a receipt.
I guess that makes these self-shopping stores? Lame jokes aside, this is a pretty cool idea. Not entirely revolutionary though...Apple's EasyPay service has allowed shoppers to self-checkout with the Apple Store app since 2011. I used the self-checkout at an Apple Store once and it felt *really* weird, like I was shoplifting. New commercial transactions are always tricky. Things like one-click ordering, contactless payments (e.g. Apple Pay), and Uber-style payments feel strange at first, but you get used to them after awhile. Something like Square's odd "put it on Jack" system — where instead of swiping a card or scanning a QR code on an app, you need to negotiate with a person about who you are — don't catch on. It'll be interesting to see where something like Amazon Go falls on that spectrum.
Update: This is an IBM commercial from the 90s that showed Just Walk Out shopping.
(via @stiegjon)
Update: The first Amazon Go store finally opened in January 2018. Here's a look at the store and how it works.
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