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    Published on: April 10, 2015

    by Kevin Coupe

    There is a fascinating piece in Fast Company about what fairly could be called the new HBO:

    "The media landscape is rapidly changing," Fast Company writes. "The advent of the DVR and the rise of streaming services like Netflix and Hulu have enabled a generation of binge viewers who can watch what they want, when they want, where they want. Viewing habits have never been more in flux. Until now, HBO has been mostly on the sidelines of this revolution. But in the past year, the company has begun taking aggressive steps to not just join this revolution, but lead it."

    Part of this is HBO Now, the new streaming service that allows people to access HBO programming without a cable subscription ... meaning that you don't need traditional cable to watch "Game of Thrones." But also part of the revolution is the fact that HBO no longer feels like it has to fit within traditional programming parameters ... it if wants to produce 15-minute movies, or even two-minute movies designed to be watched on mobile phones, it can do it. In essence, you have a major media company taking a guerilla-approach to creating and marketing product ... which is both an enormous cultural shift as well as a recognition of the competitive realities in which it finds itself.

    That approach could have an impact on other companies' business models as well.

    Fast Company writes that "HBO also has a new deal with Vice, the gonzo news organization that airs a weekly newsmagazine series on HBO. This year, Vice will start airing a daily half-hour newscast on HBO, and the newsmagazine show will increase from 14 episodes a year to 35."

    Think about that for a second. The major networks are watching their audiences shrink and in some cases, their credibility ebb away. (Thanks, Brian Williams.) More and more young people are getting their information from alternative news sources like "The Daily Show," but Jon Stewart's departure could put that audience in play ... and so a newscast from a "gonzo news organization," especially one that can be seen anywhere, anytime, might be just the right prescription for the new world of news dissemination.

    These are enormous Eye-Openers, and lessons in how to compete in a 21st century environment.

    In order to be competitive, one can't fall back on old habits and respect old boundaries. Whether you are a food retailer or a taxicab company or a media company, it is important to dispose of old biases and find new opportunities.

    You can read the entire, fascinating story here.
    KC's View:

    Published on: April 10, 2015

    Reuters reports that Amazon is suing four websites in an attempt to stop them from selling and posting fake positive reviews for products being sold on its site.

    "Amazon said the bogus reviews undermine a system that the Seattle-based online retailer launched 20 years ago to help shoppers using its website decide what to buy," the story says, noting that "four- and five-star reviews can aid sales, especially if customers perceive them as unbiased ... Amazon said the defendants are misleading customers, and through their activity generating improper profit for themselves and a 'handful' of dishonest sellers and manufacturers."

    The defendants in the case have not yet commented. Amazon is looking to stop their operations, plus damages.
    KC's View:
    This is important, because one of Amazon's great innovations has been the concept of customer reviews ... and it has to do everything it can to prevent the corruption of that feature.

    Though it isn't really a surprise that there are companies out there that, essentially, would try to make a buck by deceiving the American public. Even in 2015, there's a sucker born every minute...

    Published on: April 10, 2015

    Reuters reports that Amazon has won a concession from the Federal Aviation Administration (FAA), getting the regulators to allow it to test state-of-the-art delivery drone technology outdoors,though Amazon "must keep flights at an altitude of no more than 400 feet (120 meters) and no faster than 100 miles per hour (160 km per hour)."

    The permission comes a month after the FAA had granted permission to test an early - and, Amazon said, obsolete - iteration of the delivery drones. Amazon had criticized the FAA for being out of step with technology, and a threat that the company could move its drone research overseas has hung over the negotiations.

    The Reuters story notes that "Seattle-based has been pursuing its goal of sending packages to customers by air, using small, self-piloted aircraft, even as it faces public concern about safety and privacy. The company wants to use drones to deliver packages to its customers over distances of 10 miles (16 km) or more, which would require drones to travel autonomously while equipped with technology to avoid collisions with other aircraft."
    KC's View:
    I've thought all along, even as the FAA was making dissenting noises about commercial use of drones, that Amazon would get its way on this. I'm still not sure how practical it all is, but I a, reasonable certain that it is more practical than most naysayers believe.

    After all, normal just begs to be messed with.

    Published on: April 10, 2015

    Gannett reports that in Idaho, a new law has taken effect that " lets ride sharing companies like Uber regulate themselves and not have to deal with regulations or laws imposed by city governments. The city of Boise had been at odds with Uber over regulations and insurance before the House bill became law."

    The story says that Gov. Butch Otter let the bill become law without signing it.

    In a press release, Uber said that Idaho is now "part of the momentum sweeping the nation, joining cities and states across the country that have embraced innovation and adopted a smart regulatory framework for ridesharing ... We couldn't have done this without Idahoans like you. You envisioned an Idaho connected by safe, reliable rides, and helped guide this legislation through to the finish line."
    KC's View:
    I post this item because I think it should serve as a cautionary note to people who dismiss Uber and its brethren because they don't play by the same rules as traditional companies. That's what disruptive companies do ... they ignore the rules, or find loopholes, or just go around them, finding ways to disenfranchise traditional businesses and create an offering that consumers find to be relevant.

    Published on: April 10, 2015

    • The Chicago Tribune reports that "Walgreens Boots Alliance said Thursday it will close about 200 less-profitable U.S. Walgreens stores and open the same number of stores in new locations ... the stores will close during the next three years, with the last closing no later than the end of 2017."
    KC's View:

    Published on: April 10, 2015

    • Larree Renda, formerly executive vice president of Safeway and founder of the Safeway Foundation, has joined International Speedway Corp. (ISC) as a member of its board of directors. ISC owns and operates NASCAR racetracks around the country, including the Daytona International Speedway in Florida and Watkins Glen International in New York.

    • Weis Markets announced the promotion of Michelle Dorin, its Director of Pricing, to be Director of Dairy, Frozen, Specialty Foods and Beer. In addition, Weis also said that Maria Panko, Senior Private Brands Manager, has been promoted to Director of Marketing and Private Brands.

    • The New York Times reports that ride-hailing startup Lyft, which is trying to position itself as offering s friendlier experience than Uber, has hired Rex Tibbens, a former VP-logistics at Amazon, to be its new chief operating officer.
    KC's View:

    Published on: April 10, 2015

    I wrote the other day that it is instructive that while some companies are talking about giving $1 raises to employees, Starbucks is now willing to pay for employees to get a four-year college education. (Where would you rather work?)

    One MNB user responded:

    While it is great what Starbucks is doing, I think your concept of "doing it right" forgets the context. I'm guessing those other guys might be able to fund college for employees if they too were charging $4 bucks for a cup of coffee. They would lose their target audience in the process. Consumers overpaying for a commodity makes that possible. That is not the space most fast food folks are willing to play in.


    But in some ways, I've always wondered is this is a false choice. Let's take McDonald's. While its average transaction may be smaller than that at Starbucks, it also seems to be largely populated by employees who work part time, are paid poorly, and who often leave for other jobs, creating high ongoing training costs. If they paid people better and gave them more hours and even offered them a path to the middle class, would that result in more efficient and effective restaurants that actually are more profitable? I don't know the answer to that ... but I think that maybe McDonald's current troubles suggest that it needs to find a better way.

    Yesterday's FaceTime commentary talked about how I went to my local Whole Foods to buy fingerling potatoes, and found three varieties - French, Austrian and Russian Banana - but no description of how they differed from each other. And I said I thought this was a lost opportunity to inform the shopper and create a relationship.

    One MNB user wrote:

    Might be that Whole Foods didn’t really drop the ball by not expounding on the relative merits of each country’s fingerling potatoes, but is being compliant with the Country of Origin sourcing.

    In fact, all three varieties were from California.

    MNB reader Steve Sullivan wrote:

    Or it's a clever marketing ploy.  The thing to do is to get a bunch of all three and make your own analysis.  And the store sells 3 pounds of potatoes instead one.

    It didn't work.

    From another reader:

    Greetings from the land of potatoes - the great state of Idaho! I think you’re spot on when you say retailers should not just be the source, but the resource. In the research we do, respondents - especially Millennials - want in-store engagement, but they also complain about too many choices. They’re new and overwhelmed in the decision-making process, and they want help. Explain the product differences and illustrate what it’s best used for. Retailers will win if they make shoppers’ lives easier. Manufacturers who embrace the educational aspect of merchandising will secure long-term loyalty from Millennials seeking answers.
    And that’s my two cents….

    I'm buying your two cents.

    And another MNB reader wrote:

    Just curious but did you ask a Whole Foods Team Member what the difference was?  I agree that signage is important and could definitely have been helpful in this case but if you didn't bother to ask a Team Member you missed a huge learning opportunity.  I find it's the Team Members more so than the signage that is the biggest source of information.  I've never had a question that wasn't answered in depth and I find Whole Foods Team Members are always excited to share information about a product, recipe ideas etc.  If you did talk to a Team Member and they weren't helpful, well then there's no excuse for that but if you didn't bother I'd say the lack of information is partly your fault for not asking.

    There was nobody around. But ... I disagree with your fundamental position. It is not up to the customer to create the foundation for a sale and an ongoing relationship. That is entirely up to the retailer ...

    And still another MNB reader sent me the following information about fingerling potatoes:

    A small, narrow potato (generally 2 to 4 inches in length) that is actually a very young tuber. The potato has a finger-like appearance and a firm texture that varies from moist to dry, with a flavor that ranges from a mildly sweet to rich and nutty. Like many other potatoes, the finger or fingerling potato as it is also known, can be baked, boiled, fried, grilled, roasted, steamed, or sautéed. There are a variety of different finger potatoes available such as the Austrian Crescent, Buttercream, French Fingerling, German Kipfler, Purple Peruvian, Ruby Crescent, and the Russian Banana. Also referred to as Fingerling Potatoes.

    The Austrian Crescent is a good potato for boiling or steaming, providing a cream colored flesh that goes well in salads or side dishes. This potato may have a small crescent shape or also be somewhat straight in appearance. The Buttercream is a smaller potato with a tan colored skin covering a cream-colored flesh that can be boiled, steamed or baked. It is not considered to be a good potato for salads since the texture is not firm and crumbles easily. The French Fingerling, which is more plump and oval than other varieties, has a red outer skin covering a moist cream-colored flesh that provides a somewhat nutty flavor. It can be baked, fried, grilled, sautéed, or steamed. The German Kipfler is a yellow fleshed variety that is considered to be a good potato for making salads. It has a firm flesh that retains its shape well for a variety of baked recipes. The Purple Peruvian, native to Peru, has a purple outer skin that covers a lavender colored flesh. Since this potato has a firm texture that cooks quickly, it can be baked, steamed, or microwaved for shorter periods of time than the yellow or white fleshed varieties. It is a good potato for salads. The Ruby Crescent has a finger-like appearance covered in a ruby colored skin covering a cream colored flesh. This variety is firm textured and well suited for roasting or steaming to be served in salads or side dishes. The Russian Banana, native to the Russian region, is tan skinned with a white to cream inner flesh. It can be baked, steamed or fried to be served as a side dish or salad potato. It provides a rich buttery flavor.

    When selecting, choose those that are firm and plump, avoiding those that have shriveled skins, sprouting eyes, soft spots, blemishes and green spots. Store potatoes in a cool dry place. They will keep at room temperature for up to two weeks and longer when stored in cool temperatures. Do not store in the refrigerator because the cold temperatures will convert the starches into sugar and the potato will become sweet and turn a dark color when cooked. Do not store with onions, the gas given off by onions accelerate the decay of potatoes.

    There. That wasn't so hard, was it?

    Regarding the first woman to be hired as a full-time, regular season official by the NFL, and the general business lessons this teaches us, one MNB user wrote:

    It isn’t just female referees in the NFL—how about females as coaches in women’s sports?  All too many women’s sports teams are coached by males.

    And from another:

    In response to your article, “Game On,” and CNN the report that “corporate America has few female CEOs, and the pipeline of future women leaders is alarmingly thin …”

    According to Wikipedia, the Peter Principle describes how “employees only stop being promoted once they can no longer perform effectively.”  In other words, “managers rise to the level of their incompetence.”

    In my career, I’ve seen this happen over and over again – I’ve worked with and for a number of managers that have been promoted into positions that they weren’t qualified for.  However, I only remember seeing the Peter Principle applied to men.  The women I’ve known and respected in the workplace seem to be ruled by the opposite principle.  Many females not only get passed up for upper-level positions, but often get “demoted in place” by being assigned lesser-challenging projects and clerical duties.
    Perhaps we should call it the “Patsy Principle.”  A female employee is moved into a position where she is efficient and effective, but not allowed to go further.

    MNB reader Mark Heckman wrote:

    Just about the time we get all this “equality” stuff figured out between the races, the genders, and the have’s and have-not’s, we will soon thereafter surely be replaced by robots.

    Beware Skynet.

    On the subject of the Food safety Modernization Act (FSMA), one person who described himself as an "enthusiastic" MNB reader sent me the following email:

    FSMA, like anything that comes out of Washington, is far from perfect, but supports a general direction in food safety goals we all should care about, since we all have to eat. It seems that we could put our vested interests aside, and agree based on common sense that improvements in food safety, fewer illnesses and recalls, etc. would be a good thing, and create stronger consumer confidence in the system of protecting our food supply.

    It’s been noted that the FDA would need $580 million from 2011 to 2015 to carry out FSMA's mandate ... Given that a fighter jet costs between 60 – 100 million dollars to buy, and $30-40 K per flight hour to support, why don’t we just NOT buy and maintain a jet per year in order to do a better job of protecting the food supply for the whole nation!

    Probably because the folks who make fighter jets have better lobbyists than we consumers do.

    Though, when you think about, shouldn't our elected representatives be acting as our lobbyists?

    Now, there's a radical notion...
    KC's View:

    Published on: April 10, 2015

    If you'd told me that I'd be willing to spend four hours watching a documentary about Frank Sinatra, I probably would have scoffed. As it happens, that's exactly what I did do last weekend, and I can tell you that it is an impressive piece of filmmaking, not without flaws, but wonderful nonetheless. And it even offers some pretty good business lessons.

    "Sinatra: All Or Nothing At All" is what I would call a semi-exhaustive look at the singer's life and career. The filmmaker, Alex Gibney, uses as his framing device a farewell concert that Sinatra gave in 1971, having decided to retire from show business. The concert, in Los Angeles, consisted of eleven songs that Sinatra saw as forming the backbone of his career, illustrating his evolution as an artist. Gibney moves from song to song while interspersing some amazing footage, punctuated by interviews with a wide variety of people, including his children and two of his wives.

    Now, when I say that the documentary is semi-exhaustive, it is because the film shows a great deal of generosity toward its subject, giving him more than the benefit of the doubt when it comes to things like his relationship with organized crime figures; that may have been part of the price of gaining so much cooperation from so many people.

    On the other hand, the filmmakers probably would argue that they are simply more interested in his artistry. That's a completely legitimate position, especially since Sinatra is, by almost any measurement, a transformational cultural figure. The concert footage and recordings are remarkable, and the film uses a wide range of interviews with Sinatra to largely narrate the story. What comes across most is how Sinatra thrived on aloneness ... which is different from loneliness. The songs are best when his voice exists in a kind of isolation, as the dominant instrument in any of the performances. A piece this week suggests that "Sinatra’s voice is always that of someone confiding, not someone emoting." I think that captures it precisely.

    In one of the interviews that carry the film along, journalist Pete Hamill, who once wrote a book called "Why Sinatra Matters," says that while Sinatra's "imperfections were upsetting," he was "a genuine artist, and his work will endure as long as men and women can hear and ponder and feel. In the end, that's all that truly matters."

    This authenticity as an artist is what makes "Sinatra: All Or Nothing At All" work so well.

    As for the business lessons...

    One of the central themes of the documentary is how Sinatra reinvented himself numerous times as he sought to keep himself relevant to a changing audience. That became extremely difficult for him in the sixties, when rock 'n roll took over the popular consciousness and he no longer could lay claim to being the hippest guy in the room. He'd done his best; even though he hated the music of Elvis Presley, he hosted Presley on his TV show when Elvis returned from the service. (There is great footage of the two of them doing a duet - it is priceless and one of the best things in the film.)

    That's something we all have to do in our businesses - seek ways of being relevant to our customers, looking for ways to connect with the people who make our success possible.

    There's another lesson. When Sinatra decided to retire in 1971, he was just 56 years old. (He came back a few years later, and had a late career surge.) Think about how the world has changed in the last 40 years or so. Nobody today would consider retiring at 56. Mick Jagger is 71. Paul McCartney is 72. Billy Joel and Bruce Springsteen are both 65. They're all still performing, and there is no suggestion that they're too old or not relevant enough to continue for as long as they're able.

    These days, 56 is just getting started.

    I cannot recommend Still Alice enough. It is a fabulous movie, though incredibly tough to watch ... I know that I had tears in my eyes almost from the beginning.

    Still Alice is the story of a highly accomplished linguistics professor, played by Julianne Moore, who discovers she has early onset Alzheimer's, and the movie tracks her inevitable decline as she tries to navigate the horrible impact of the disease. The movie is heartbreaking, not just because of how it affects Moore's character, but also her family - chiefly her husband, played extremely well by Alec Baldwin, and free spirit daughter, played by Kristen Stewart in a wonderful turn.

    In the end, of course, it is Moore's movie, and she is extraordinary - proud and defiant and scared and vulnerable, terrified for herself and her family, as she slowly feels her intelligence and language move beyond her grasp.

    One cannot help but think of all the people we've known who have been affected by Alzheimer's, and wonder what would happen if that dread disease hits even closer to home. It is provocative and wise and devastating.

    Still Alice is going to stay with me for a long time. I think you'll have the same experience.

    My wine of the week is a 2011 Dundee Hills Pinot Noir from Oregon's Stoller Family Estate - it is delicious, with lots of fruit.

    That's it for this week. Have a great weekend, and I'll see you Monday.

    KC's View: