Lemons, Lemonade, & Lululemon

So it’s no secret that the mall is in trouble. A number of factors have put this american institution in hot water; the current economy, changing consumer preference, renaissance in boutique shopping, the internet, you name it. The farther we seem to progress as a society, the smaller the mall seems to grow in the rearview mirror.

Tonight I had some errands to do, and having not been to a mall in probably a year, I decided to check it out. I’m not a fan of malls at all, but on a Thursday night I knew it wouldn’t be too bad. In general everything was pretty empty. Sales associates lounged around waiting for the night to end. There were a few uncomfortable situations where the people that work the hair extension carts were shaking down random passers-by, but mostly things were pretty dead. Then I walked past the Lululemon store.

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Airline Hatred and Online Aggregators

Ok, so I hate airlines.

Actually, there’s a little more to it. In general, I’m OK with the flying experience. I know it could be better, but for the most part, it’s good hearted people doing the best they can in a very tough, complicated, interlocking service industry. (Full disclosure: my bother is a pilot.)

The hatred I have for airline comes from their management decisions. I hate them for their inhuman inflexibility. I hate them for their nickel and dime tactics. They remind me of banks, both lay out very narrow rules of engagement and give themselves the right to tax you if you deviate from the plan. They let the policies play bad cop and stand unaccounted for some pretty unfair treatment.

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Hey Ryan: I’d Measure for Experimentation

So in our ongoing online nerd-out, Ryan posed the following question around measuring innovation:

If you had to measure one thing, just one thing, for (growth and) innovation, what would it be?

Holy hard questions, how am I supposed to answer that? Never mind the fact that every major management consultantency and their boutique spin-off siblings are manically running around trying to figure out how to measure innovation, now you’re only going to let me chose one thing? Ok, fine, I like a good unsolvable problem, lets do it.

The nice thing about really hard questions is that it forces you to really break things apart, which is sort of the whole point of this exercise. I started to think about how most metrics actually measure multiple things, it’s a synthesizer of the organization. GE, for example, tracks innovation through measuring organic growth. In that case you have find new revenue and the assumption is that to capture that revenue, you must be innovating to create that value. Diego’s Mileage Metric is a readiness measure that looks for people that have operated in a certain environment AND those products have gone to market. It’s not enough to just be near innovation, you need to have soldiered through the morass.

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Rebellion on Automattic

Online piracy is a pretty fascinating phenomena if you think about it. In the beginning it was pretty much petty hacker theft; people sharing files because they could. If athletes celebrate their talents by winning races, hackers celebrate their skills and intellect by getting away with things most people can’t. In that vein, there’s a fascinating article in Rolling Stone about a blind phreaker who used to terrorize late-night voice chat lines, bizarre and fascinating – article here.

File sharing is an evolutionary meme. Today, the phrase “meme” is usually synonymous with internet jokes – lolcats, orly owls and the like. However, the idea behind a meme is so much bigger and stronger than internet jokes. By definition a meme is a unspoken idea or agreement that’s transferred around a culture through indirect communication. No one defines it, no one writes it down. Internet jokes are a great example because it’s impossible for everyone to get together and agree something’s funny, it’s funny because everyone’s simultaneously getting the joke. Meme’s are sort of the basic principle behind humor, obscenity, justice, and community – all those very abstract concepts. You know them when you experience them, you’re able to know what it is because you get all the meme.

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Speaking of measurements…

…and I just was. I noticed a really nice twist on the old restaurant secret shopper scheme. According to this article, Five Guys Burgers & Fries hires secret shoppers to find people who are doing things right. So instead of feeding a fear-based culture of screwing up and getting caught, they find ways to highlight people who are getting it right. And by doing secretly, they’re probably getting around the apple polishers who only do it right when they think it counts….because really, it always counts.

Funny how your perspective really influnces how your solve you problems.

Airlines, mind your measures

Four years ago, I was at work sitting through lunch meeting around the health of our office. At the time what we were producing was great, and moral was high…but profitability was sort of lagging. My coworker deadpanned, “I supposed you can’t be considered successful until you’re considered profitable.” I sort of chuckled at the time, because I figured it was his way of basically stating that we were screwing up. I mean, isn’t the only way a business can be successful is if it’s profitable?

That moment has stuck with me over the years, and probably has done a decent amount to deprogram my b-school education. I was surprised at the automatic leap I had made to equate profit and success. I know that successful businesses are usually sustainable and profitable, but I had let something else define what success means. And when someone else defined success they implicitly defined what we would measure to be successful.

Its pretty fascinating that people are really good at optimizing what the measure. The act of tracking anything socially elevates its importance. And if we think something is important, we make sure we tend to it. On the job accidents, profitability, CO2 emissions, return on investment, net promoter…you name it, we can track it. Things get sticky though when the ideals we measure conflict with each other. Is profitability more important than customer satisfaction? Is avg. purchase price more important than how many people I tell about what I purchased?

I’ve been noticing lately how the airlines measurements get them in trouble time and time again. There’s the standard bullshit we all sort of laugh about when they push back from the gate for an ‘on-time departure’ only to sit on the runway for an hour. Last week, I noticed a new one. Since some airlines charge for every bag checked, the overhead storage space on the plane has become even more of a premium. As passengers filed on the plane, a flight attendant told a man he would have to gate check his bag. He smugly replied, “I guess no one else wanted to pay that $25 bag surcharge either.” We had so many bags to gate check that the plane left late. So in this case, the airline didn’t make any extra money (they don’t charge for gate check), the flight left late, and everyone was miserable. Way to go, Delta.

Dave Carroll of the band Sons of Maxwell have been getting a lot of attention because of one of their airline horror stories. Apparently United broke some of their music equipment in 2006. After no one at United helped them repair the damage, they wrote a song about it and posted it on You Tube. So what would might have been a $2k repair bill for United turned into a decent sized fiasco, 2.4M people have watched that video in 6 days. (That’s the population of Houston.) Good news for the Sons of Maxwell, bad news for United.

I guess it’s no surprise that the airlines who are thriving in today’s environment (southwest, virgin, jet blue), are the ones who have figured out that the customer experience (and how they measure it) are arguably one of the most important pieces of their strategy.

If you think about it, how you measure success is probably more important than how you define success. If you goal is to go east, and you measurements reward your for going west, where do you think you’ll end up?

Business in Beta

Sort of not new news, but I semi-published some thinking through work a few weeks ago. Nothing that major, but I’ve been writing about some similar stuff around this blog, so I thought I’d make the connection for those that are interested. Check it out, let me know what you think.

Business in Beta.

Immediate vs. Reliable

Ryan posted up a response to my questions around immediate vs. reliable. I have to admit, that’s an impossible question to answer, but I guess that’s sort of the point of the exercise. You can tell Ryan did a lot of thinking around this, and I think his response is pretty inspiring.

The first big thought was around posing the question. He said.

The question you pose is often just as important as the answer you find.

That idea made me think of David Foster Wallace’s now famous Kenyan convocation speech (see next post). In that wonderfully inspiring bit, he talks about how the mind is a wonderful servant and a terrible master. That if we can harness the power of thinking about what we do before we do it, we can end up in a pretty amazing place. I think Ryan was onto something similar. By carefully formulating your questions, you move with intention. It’s not emergent, it’s not post rationalized, it’s just well thought through.

Secondly, I like we’re Ryan started to break apart the standard unanswerable question and graft some of those qualities onto people and methods.

I want reliable people posing provocative questions and processing more immediate inputs.

That’s pretty genius if you think about it. Immediacy and reliability are just concepts, without context they aren’t real. Taking those things and attributing them to who/what/when/how gets you much closer to a designable state. It’s a nice aspirational equation for who you should find and how they should work. Thanks Ryan.

Adwords Evolved

I don’t usually get too inspired by advertising. Some times it makes me laugh or pulls at some heartstrings, but it doesn’t really inspire me to look at the world in a different way. Then my co-worker Clark showed me this.

Converse just won an Effie for flipping Google Adwords completely on its head. In the past, if people wanted to sell shoes, they would by the Adword for ‘shoes’ or ‘footwear’ or if they’re feeling adventurous, ‘kicks’. Then if people search for “shoe” they’ll see the link. The more marketers buy the same words, the more expensive that Adword is. That basically means every shoe marketer in the world is inflating the price of the word, creating more competition for themselves, and probably not meaningfully reaching anyone. (When’s the last time you searched for shoes? You either hit the brand or you go to Zappos.)

Converse flipped the script, they started buying Adwords that their demographic were already searching on. How did they know what they were searching? They just looked at Google Zeitgeist. So now, when a teen is searching for ‘how to kiss’ they might see a link for a Converse mini-site. The mini site is a moment to connect, and it’s a link back to Converse (if they want it). The only way you get to pull that off is by intimately knowing your customers and knowing what they want.

I would expect that Google will start to price terms in Zeitgeist slightly higher (if they don’t already). I think this campaign will probably change the way people buy Adwords. It’s like human-centered media planning…what an oxy-moron.

Minimum Viable Product

I’ve been thinking a lot about prototyping businesses. I think it’s a hangover from years in the software industry. It’s regular in a business of bits and bytes to build something small as a proof of concept for bigger things. In fact, much of my career in software I was working on something that had been already sold, trying desperately to make good on someone else’s promises.

I’ve had this continuum in my mind for a while, on one end is vapor wear (sold products that don’t yet exist) and at the other end is military-grade (products so refined and tested, they should live through a nuclear winter.) I’ve been trying to figure out how to start building new lines of business in a traditional business, (restaurants, CPG, service businesses, etc) without building up an entire supporting enterprise. Seems like it should be simple, but it’s not.

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