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Archives › January 2007
January 31, 2007
Today's news
A Viral Campaign Bombs
Posted by Mike Hofman at 5:20 PM
The suspicious packages that caused alarm in the Boston area today were part of a viral marketing campaign, ABC News is reporting. The campaign for the Cartoon Network's Adult Swim program "Aqua Teen Hunger Force" prompted mass transit delays and the closure of a major highway on Wednesday, after reports of suspicious packages were fielded by area police. As many as nine objects were found; several were attached to bridges and subway stations in high-traffic areas. Turner Broadcasting, which owns the Cartoon Network, told ABC that the objects were magnetic lights. The company placed these lights in Boston and nine other cities around the country several weeks ago. (For the link to ABC News' article, click here.) The company has apologized for the scare.
The ad campaign and resulting hubbub comes at a time when outdoor advertising is undergoing a creative renaissance, as Max Chafkin reports in this month's issue. (You can read Chafkin's article "Ads and Atmospherics" here.)
What do you think? Does this show the limits of attention-grabbing outdoor/viral marketing campaigns? Should Turner do more to make amends to the fine people of my former hometown, Boston? And could this potentially be a blessing in disguise? Do you think ratings for "Aqua Teen Hunger Force" will jump in Boston following today's wall-to-wall media exposure?
Today's news
The Fed Holds Firm
Posted by Mike Hofman at 2:29 PM
The Federal Reserve Bank's Open Market Committee left the target federal funds rate at 5.25 percent this afternoon.
"Recent indicators have suggested somewhat firmer economic growth," the Fed said in a statement, "and some tentative signs of stabilization have appeared in the housing market. Overall, the economy seems likely to expand at a moderate pace over coming quarters."
Ever cautious, the Fed noted that the the risk of inflation is still present given the economy's "high level of resource utilization," which could lead it to raise rates as 2007 progresses.
January 30, 2007
Women in Business
More from the "Women of Inc." teleclass
Posted by Bobbie Gossage at 2:50 PM
Thank you to everyone who came to the Principal Financial Group's Women In Business teleclass today. For those of you who participated, here's the list of resources that Jane Berentson, Stephanie Clifford, and Leigh Buchanan and I discussed.
Also, I wanted to give you the link to that list of business blogs I mentioned at Blogher.org. If you look through them, you can see for yourself what works and what doesn't. The best blogs are helpful and/or entertaining, and they are conversational and interactive. The worst business blogs just regurgitate company press releases or advertisements.
If you have any other questions about what we discussed in the teleclass today or about any other aspect of running your business, please feel free to send an email to us at askinc@inc.com.
January 29, 2007
Innovation
You Tube to Share Revenue With Users?
Posted by Ryan McCarthy at 3:22 PM
Chad Hurley, co-founder of the web 2.0 darling, You Tube -- now property of Google -- hinted at an interesting new revenue stream for the two-year old company. Here's Hurley at the Davos World Economic Forum talking about about You Tube's plans to actually share advertising revenue with users who upload videos onto the site.
The idea, it seems, is to subject You Tube's users to three-second advertisements called "pre-rolls" prior to watching a clip on the site. Presumably, You Tube would then somehow share the revenue from these ads with some of its users.
The particularly creative posters among You Tube's approximately 70 million users, who've posted gems like "Little Superstar," may now turn into profitable enterprises.
But can You Tube make this business model work? And how will it pay and reward users who, at this point, have been so adept at generating content for the site for free? Will paying users who generate great content turn You Tube's audience off?
And if the revenue-sharing model does work, how long can You Tube remain true to its users? Will we someday see production companies launched with the sole purpose of generating short, viral video clips?
January 26, 2007
Inc. 500 conference
Flowers in our hair at the 2007 Inc. 500
Posted by Athena Schindelheim at 12:21 PM
As an official veteran of the Inc. 500 experience (having attended two of the last 25 Inc. 500 conferences and awards ceremonies in hilly San Francisco, CA, and in haunted Savannah, GA), I can say with authority that the event is a source of inspiration, networking connections with other smart and successful entrepreneurs, livened philosophical and pragmatic discussions, valuable advice and insight, fun gifts from the event sponsors, and the ever-present dessert-like snack. On Saturday alone I ate a raisin bran muffin, a buttery scone covered in powder sugar, a dense walnut-topped brownie, a large individual cheesecake torte, and a custard-filled cup fashioned out of chocolate.
That same morning, Yvon Chouinard, Patagonia’s founder and the Inc. 500 opening keynote speaker, broke his audience in the Grand Ballroom into stitches as he explained why, “leading an examined life in business is a pain in the ass.” One of his shocking points about how Patagonia, an Inc. 500 alumnus, differentiates its products from others in the outdoor apparel industry by their exclusive use of 100% organic cotton elicited gasps. Industrial cotton, he said, is one of the most harmful raw materials because of the common use of pesticides known as Agent Orange, and fields of cotton he has visited could only be described as total death zones. He talked at length about business’s responsibility to be aware of its affect on the planet and shared the Patagonia mission statement to “build the best product, do no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”
Chouinard also mentioned that, although he receives multiple offers on a daily basis, Patagonia is not for sale. His book, “Let My People Go Surfing,” is a kind of living will and testament to his wishes for the running of his company when he is no longer at full capacity. Employees get their work done, but not according to a strict schedule. If the tide comes in, they can grab their boards and come back to their desks later. He was very adamant about maintaining slow growth at this point in Patagonia’s lifecycle and said he had as much money as he’d ever want or need. A lot of companies let their rocketing growth shoot right out of their own control, but it was still interesting to me to hear a CEO admit to reaching his financial goals.
During the speech, I had the pleasure of sitting with a young couple from Nappanee Window who graced the 2005 Inc. 500 list at No. 299 and enjoyed the conference in Savannah so much that they decided to join us again to celebrate the 2006 honorees. One of my favorite parts of attending the annual conference are these friendly encounters and conversations. I’d also like to give a shout out to the rad dudes from No. 85 Booyah and No. 147 AET Solutions.
Later in the afternoon (pastry in hand, I’m sure), I hurried into the Web 2.0 breakout session to hear what Bobs Cringely and Scoble, Michael Pond, and our very own Ed Sussman had to say about the incredibly evolving online landscape. They dropped a lot of app names, like Wet Paint, Kismet, iTrack, and preached on the amazing powers of BlendTec. The walk-away message, though, is that the real 2.0 is about the evolution of your business model, and like any new shiny toy (if you choose to enrich your website with a blog), this one requires constant maintenance.
January 25, 2007
Technology
Thumb Shopping
Posted by Bobbie Gossage at 5:42 PM
If you own a BlackBerry (or if a BlackBerry owns you) and you wish you had time for more impulse purchases, there's a new program you might like. Digby, a free BlackBerry application that launched this week, lets you order things like CDs and books from Amazon.com with a few clicks. The program was developed by 30 Second Software, a private start-up in Austin that was founded to make mobile applications for the impatient.
Instead of waiting for entire Web pages to load on your BlackBerry, you can use Digby to search and scroll through the inventory. It's also speedier because Digby can store your credit card information and automatically import the shipping information from your BlackBerry's address book.
Plus, if you want woo a client (or romantic interest) but don't want to put much thought into it, you can use the program to quickly send flowers, chocolates, or a gift basket by clicking on the icons.
Visit Digby.com from your BlackBerry to download the free software.
January 24, 2007
Today's news
In Praise of Drug Testing
Posted by Mike Hofman at 4:31 PM
Just days before the Super Bowl, the National Football League and the players' union agreed to a plan for more extensive drug testing, and for larger fines for players who fail tests, ESPN reports. The move can be read as an effort to prevent the NFL from facing the same kind of troubles that Major League Baseball has faced over steroids and other performance-enhancing drugs. The NFL's testing regime, which the union ratified, will test more players per week, meaning that more tests will occur throughout the course of a year. The tests will also be conducted in a random fashion, so that players can't plan their drug use around predictable tests.
Of course, testing for steroids in sports is very different from testing for illegal drugs in the workplace. But still, when I heard about the NFL and players' union coming together to endorse a new plan, I recalled a column that Norm Brodsky wrote in Inc. in November 2004. In that column, Norm said that reluctantly, his company had begun drug testing.
"We'd heard rumors about marijuana being bought and sold on our premises. We'd also seen a marked increase in petty theft and minor accidents, which I suspected was related to drug use," Norm wrote. "People were running forklift trucks into walls and dropping skids of boxes onto the floor as they were being moved from one spot to another. Items would disappear from the shipments of goods that we kept in the warehouse for customers of our trucking business. I couldn't blame all of the problems on drug use, but I felt certain that it was a contributing factor."
"Still, I hesitated to start drug testing... I had reservations about punishing people for doing something I'd also done at their age. In addition, I knew that drug testing could result in our having to let some employees go -- maybe even some good, long-term employees -- at a time when the growing labor shortage was making hiring increasingly difficult. That seemed likely to cost us a substantial amount of time and money -- not to mention emotional anguish -- over and above the cost of the testing itself. But I eventually decided that we had to go forward anyway, mainly because of the accidents. No one had been seriously injured, but I knew our luck would run out sooner or later."
So, with ample warning to his employees, Norm started drug testing. The results of the first test were stunning: half of his workers failed. Read his column (here's the link) to find out what happened next.
In the meantime, what do you think? Do you conduct drug testing at your company? Do you think that the NFL's idea of hitting an athlete's wallet following a failed drug test is sound? If employees fail at your company, what are the consequences for them?
January 23, 2007
Proposed Tax Breaks
Posted by Mike Hofman at 5:51 PM
The Senate is currently considering a plan to link the much-ballyhooed federal minimum wage increase to a package of tax breaks designed to mollify small business owners. According to a press release from Senator Max Baucus of Montana, the chairman of the Finance Committee, the provisions include:
1. Extending for the next five years the "Work Opportunity" Tax Credit, which can be claimed by employers who hire workers off welfare, for example. The bill would also broaden this group to include returning veterans.
2. Extending by one year the tax rule that allows small businesses to bundle as much as $112,000 in expenses into one annual deduction.
3. Extending by one year the rules that allow entrepreneurs to deduct expenses incurred while refurbishing leased facilities or in some cases facilities that you own or build.
4. Allowing a larger group of companies to use the simplified cash method of accounting for tax purposes.
5. Making S Corp status available to more new and existing businesses.
6. Creating a certification process for professional employer organizations or PEOs, which serve as the employer of record for companies that want to outsource basic human resources functions.
What do you think? First, are tax breaks a fair trade for higher minimum wages? Second, which of these provisions do you find most appealing? Third, are any of these proposals, in your view, a bad idea?
January 22, 2007
Inc. 500 conference
Notes from the Inc. 500
Posted by Mike Hofman at 6:03 PM
So the 25th annual Inc. 500 conference was held this weekend in San Francisco, at the lovely Fairmont Hotel located high atop Nob Hill. As always, the event brought together some of the smartest, most successful, and more harried entrepreneurs in America. This year, compared with past conferences, the crowd seemed very optimistic. They also seemed younger.
Yvon Chouinard of Patagonia, Ken Hendricks of ABC Supply, Chuck Williams of Williams Sonoma, and John Tu and David Sun of Kingston Technologies were among the notables to grace the main stage. Chouinard, whose speech kicked off the conference, offered his unique and (for a roomful of business owners) controversial views on the responsibility of companies to make up for the environmental degradation caused by commerce with cold hard cash. Patagonia, he explained, donates one percent of sales in order to promote activists involved in environmental conservation and other causes. It all sounded pretty lefty to some CEOs, but then again, in a room full of entrepreneurs, there are bound to be disagreements.
In another keynote speech, Tom Peters, the author of In Search of Excellence, advised the crowd that the only bankable way to succeed in life is to get up earlier than anybody else (6:15 a.m. at the latest) and to work longer into the night than the competition. He also argued that companies that aren't directing their pitches (not tailoring, but directing, mind you) to women and to what he referred to as geezer boomers—well, they're missing the boat.
Finally, a delegation of nine Chinese government officials were also on hand to promote entrepreneurial exchanges between the globe's biggest economy and its fastest growing. The delegation presented Inc. editor Jane Berentson with a lovely painting of a tiger. Their interpreter was perhaps the hardest working person at the event, and at one point, a panel discussion that began in English suddenly switched over to Mandarin as a CEO in the audience asked a question in Mandarin on how long it takes to register intellectual property in China. A panelist and an audience member, also speaking Mandarin, discussed the question among themselves, while the non-Mandarin speaking portion of the audience was provided with a live-action metaphor for what it's like to do business in a foreign land.
January 18, 2007
Today's news
To Catch an Embezzler
Posted by Mike Hofman at 4:49 PM
Between January 2004 and last month, a Boston area women employed as a bookkeeper at a drywall company embezzled more than $1.1 million from her employer, the Boston Globe reports today. Her method: forging some 450 checks "to herself, her credit card company, her mortgage firm, and other businesses to which she owed money," the Globe says (for the full text of the article, click here). "She alledgedly covered up her activities by entering legitimate payees for each check."
Unfortunately, this is an all-too-common problem at smaller companies. Three years ago, frequent Inc. contributor John Grossmann wrote a "Case Study" (here's the link) about Graff-Pinkert, a family-run business in Oak Forest, Ill., that buys and sells machine components. The company had recently discovered that a bookkeeper there stole $200,000 from company accounts. The next year, at the annual Inc. 500 conference, the CEO of one of the fastest-growing companies in the country told me that, after reading that article, he went back and took a closer look at his books. Lo and behold, his bookkepper had embezzled more than $700,000!
One of the interesting things about these embezzlement cases is that, typically, embezzlers move from job to job, employer to emplyer, and crime to crime somewhat undetected. Only after a scam is revealed and former employers are contacted does an entrepreneur learn that the crook had a history of stealing from a previous employer.
Companies also hush up these crimes out of embarrassment or fear that their customers or competitors will find out, and that their reputations will be tarnished. "The tendency for many business owners is not to prosecute," entrepreneur Lloyd Graff told Inc. in 2003. "They don't want their dirty laundry in public and don't want to look stupid for allowing someone to so easily take advantage of them."
What do you think? Should companies make more of an effort to pursue legal action once an embezzler is discovered? Does a company have a moral obligation to inform someone calling for a reference that a former employee had his or her hand in the till? And how widespread do you think embezzling like this is? Do you have an experience to share?
January 17, 2007
Employees
Home Based, but Promo Denied
Posted by Mike Hofman at 4:42 PM
Employees who work from home are less likely to get promoted or enjoy other career advances than their in-the-office counterparts, according to a survey of 1,320 employers conducted by the recruiting and placement firm, Korn/Ferry International.
"[M]ost of the executives consider telecommuters to be at least as productive as their desk-bound colleagues, according to the survey. And three-quarters of those bosses also said they'd like a job in which they could regularly telecommute," the Los Angeles Times noted in an article looking at the survey findings.
"The survey results come as many companies are allowing more employees to telecommute, work flexible hours and even share jobs in order to attract and retain talented employees, often women with young children," the Times continued. "The paradoxical findings speak to a 'general fear' that workers who have the boss' ear in the office will get promoted ahead of an off-site colleague who is doing better work, said Michael Distefano, vice president of global marketing at Korn/Ferry. 'It's silly when you think about that.'"
Companies may also promote office workers over home-based employees because promotions generally involve some new management duties, the Times notes, and managing from home is more complicated than working for someone from home. (To check Korn/Ferry's release on the survey, click here.)
What do you think? Do you hesitate at the notion of promoting a worker who's never in the office, or would you see no roadblock to rewarding a productive worker whom you never see? Do you think that an employee who requests a flexible work arrangement is tacitly agreeing to forego some aspects of career advancement, including raises and promotions? And how do you think your workers would react to the idea to being managed by someone who works at home?
January 16, 2007
Today's news
Pixar's Slow Start
Posted by Mike Hofman at 5:06 PM
One of the more interesting moments, from an entrepreneurial perspective, of last night's Golden Globe awards was the acceptance speech of John Lasseter. Lasseter is the hot shot producer at Pixar who created the Toy Story series and, this year, Cars, which won the best animated feature award last night. (As Lasseter noted in his speech, this was the first such new category added by the Hollywood Foreign Press Association in many years.)
Cars, which was the second highest grossing movie of 2006, was also the seventh hit in a row from the innovative animation studio that most people associate with Steve Jobs. But as Inc. reported in its June issue, the impression that most people have about Pixar—that it is a remarkable overnight, tech-driven success story—is all wrong. In fact, Jobs' co-founders, two obscure computer graphics researchers named Edwin Catmull and Alvy Ray Smith, struggled for years to figure out what business they should be in, and what their revenue model ought to be.
Just 15 years ago, the company barely survived thanks to TV commercial work totaling $2 million in sales, a paltry sum when you consider that Cars produced well over $200 million in domestic ticket sales. Indeed, the story of Pixar's early years provides a nice reminder of the fact that even long-suffering companies can, in the end, work out a valuable business proposition.
Alpha Dogs
Give Tom Oreck a Break
Posted by Donna Fenn at 3:19 PM
Tom Oreck has been taking a lot of heat lately. The president of the Oreck Corporation, a privately-held New Orleans-based company that makes vacuum cleaners at a 500-employee plant in Long Beach, Miss., recently announced that he’s moving the company’s manufacturing operations to Cookeville, TN. The reasons: insurance costs that have nearly doubled for just one-third the coverage; and a crippling lack of skilled workers to fill jobs at the plant. Blame it on Katrina, which devastated the region and destroyed the housing stock.
Tom Oreck was once hailed as a local hero when, ten days after the storm, he re-opened the New Orleans headquarters and the plant. He provided temporary housing for employees, and brought in truckloads of food, water and supplies. “My Dad, David Oreck, founded this company 40 years ago and I’m not going to let a hurricane destroy what he created,” said Tom Oreck. “If they were an Oreck employee before the hurricane, they still have a job.” These are not the words of a CEO who is planning to bail out.
Continue reading "Give Tom Oreck a Break"
January 11, 2007
Alpha Dogs
Copy Cats and Alpha Dogs
Posted by Donna Fenn at 4:51 PM
In this month’s issue of Inc., I write about Chris Mendez, CEO of Clothes Dr., a central-Florida chain of dry cleaning stores. Mendez’s business was in crisis until he met a fellow named Jason Loeb, the CEO of Sudsies, and a bona fide Alpha Dog. The Miami-based Loeb had all but abandoned the traditional dry cleaning business model, closing down store fronts and adding delivery trucks and a robust web site to organize pick up and delivery. It was a radical change that resulted in far lower costs, higher revenue, and greater customer retention. Still, most dry cleaners wouldn’t dream of making such dramatic changes. But Mendez felt differently. After meeting Loeb at an industry event, he called him repeatedly for advice, hoping to replicate the model at Clothes Dr., which was in a non-competitive market. Mendez is now reaping the rewards, all because he stepped away from his company and was on the lookout for great ideas that had made others in his industry successful. He’s living proof in the power of the “stolen” idea. Who are the Alpha Dogs in your industry and what can you learn from them? What’s the best idea you’ve ever replicated?
January 9, 2007
iPhone Envy
Posted by Max Chafkin at 7:46 PM
The world’s gadget manufactures are in Las Vegas this week, hawking their wares at the annual Consumer Electronics Show. This event always includes some drool-inducing product announcements, and this year has been no exception. We’ve seen a satellite dish that you carry can around in a briefcase, a new gadget from the makers of the Slingbox for watching YouTube videos in your living room, and, of course, a giant flat screen TV. But so far the showstopper at CES isn’t at CES. It’s at MacWorld.
Apple’s Steve Jobs once again proved he knows how to launch a product today, announcing the release of a new portable device that will “reinvent the phone” (read a minute by minute account , or go with this sober summary from the New York Times). Although it’s unclear whether the phone will live up to Jobs's lofty promise, a quick look at the specs on Apple’s website makes me look askance at my brand new BlackBerry Pearl (and every other cell phone, for that matter). The iPhone has a touch screen keyboard, Wi-Fi and cellular Internet access, the Mac OS X operating system, and can play MP3s and widescreen videos just like an iPod.
How could you not love this thing?
Continue reading "iPhone Envy"
Today's news
Jim Clark Exits Shutterfly
Posted by Mike Hofman at 4:50 PM
Jim Clark, the legendary technology entrepreneur who founded Silicon Graphics and Netscape Communications, has quit as chairman of the board of Shutterfly, the online photo ordering site, the company announced on Monday. (To read the official press release, click here.)
As Dealbook, the New York Times business blog, notes today, Clark cited the demands of Sarbanes-Oxley as the key reason for his departure. "As I understand it, Sarbox dictates that I not Chair any committee due to the size of my holdings, not be on the compensation committee because of the loan I once made to the company, not be on the governance committee, and it even dictates that some other board member must carry out the perfunctory duties of the Chairman," Clark wrote to the board. "What’s left is liability and constraints on stock transactions, neither of which excite me. It seems pretty clear to me that lawmakers have gone too far in considering a large shareholder to be inappropriate in the roles, but it is equally clear that I have no ability to change this in the near term. My only solution is to become an outsider. I wish to be treated as such effective immediately." (To read Dealbook's coverage of Clark's resignation, click here.)
Shutterfly, which is based in Redwood City, Calif., appeared on the Inc. 500 in 2005 and 2006, ranked numbers 170 and 320 respectively. The company went public in September.
Clark, who was the subject of Michael Lewis's 1999 book The New New Thing, is among the most high profile entrepreneurs to cite Sarbanes-Oxley as a reason for dropping a board gig. Clark also notes in his farewell letter that as a technologist, he has less and less to offer Shutterfly, as it becomes, in his mind, more of a manufacturing play. What's your best guess: Do you think we'll see more folks of his caliber walk away from corporate governance altogether, as Sarbox regulation becomes more entrenched with each passing year? Or do you think Sarbox is a convenient excuse that any boardmember who wants to quit their job can cite—sort of the new "leaving to spend more time with the family"?
January 8, 2007
Could You Go Back to Corporate America?
Posted by Carole Matthews at 4:07 PM
Entrepreneurs are -- on some level -- just like any other individual in terms of employment: They need an income, a level of security to ensure they can provide for themselves and/or their families, and work that won't put them to sleep. But they're an unusually passionate group of people whose work is born of something deeper. They enjoy the challenge of building a business, the independence it affords, and the excitement of knowing the business will sink or float based on their efforts.
I was reminded of this sentiment when I read today's Careers Q&A at WSJ's Startup Journal. Reporter Perri Capell responded to a question regarding one entrepreneur's search for a job after having owned a company for the past seven years. The entrepreneur can't find a job, and reporter Capell's first speculation is perhaps the entrepreneur isn't cut out to work for others. (Besides this point, the reporter offers some tips for finding a job after being a business owner: Look for positions at smaller companies seeking someone to help start a spin off; use networking; update your resume emphasizing your business ownership achievements; and return to your original skill set.)
However, when this entrepreneur does find that elusive job, will working for someone else be fulfilling enough? Inc. Editor-at-Large Bo Burlingham responded to one entrepreneur-turned-employee in this 2001 Inc. Query. Burlingham's first comment was that Inc. hadn't heard from too many entrepreneurs seeking to become employees after having experienced business ownership. And Norm Brodsky noted in the same response that entrepreneurs are generally too headstrong to be long-term employees, but could work with a small company looking for an experienced entrepreneur, or become a contractor. Norm's closing remark, "If that doesn't work out, start a business."
Becoming an employee obviously is possible for entrepreneurs. But even the entrepreneurs-turned-employees I know harbor secret yearnings to become owners again. One such entrepreneur who is happy (he says employment works for him because his parent company is across the country) can't seem to shake the entrepreneurial itch. Despite his amenable arrangement, he already has plans for his next business in the works.
I suspect he'll never be able to shake that entrepreneurial passion. Could you?
The Apprentice
The Apprentice Season Premiere
Posted by Nadine Heintz at 10:43 AM
I reluctantly tuned in to the new season of the Apprentice last night. The Donald's recent desperate attempts to drum up publicity for the show have been nothing short of embarrassing. First the hullabaloo over the "shocking" antics of Miss USA. And then the ugly, ridiculous battle with Rosie. I guess it's just further proof that you can't buy class.
That said, I must confess that the Donald's sheer tackiness is part of the show's appeal. And tackiness is in no short supply this season. First of all, Trump seems to have died his hair bleach blond to blend in to sunny L.A. Then there was that opening scene that featured the Donald zipping up to his L.A. mansion to greet Melania and Baron. Gag! The contestants are no less artificial, which NBC seems to embrace by giving them one-dimensional labels. There's Heidi the Hottie, for example, and Surya the Hair. So are they basically admitting that the best thing Surya has going for him is his Gotti-esque hairdo? Not surprisingly, the women's labels are demeaning. Besides Heidi the Hottie, there's Jenn the Blonde and Nicole the Dreamer. But I guess Aimee the Thinker balances it all out. The fact that there's only one Thinker in the bunch doesn't bode well for the caliber of this season's candidates!
I will admit that I like the change of venue and it is pretty fun to watch the losing team camp out behind the winners' mansion. Not like the mansion is that great anyway. Are you telling me there's only one bedroom in that whole place? The bunkroom style sleep quarters are pretty bad. Still, it must be awful to watch the other players' relax in the pool while you sweat it out on a tree stump and brush your teeth over sinks of stagnant water. Despite those new twists, what's really going to make or break this season are the tasks. One reason why the New York show started to slump is that it seemed to be repeating the same lame challenges season after season, most of which were blatant promotions for advertisers. I'm hoping that the show will break out of that mode now that it's in L.A.
Last night's carwash challenge wasn't exactly thrilling, but at least it didn't involve a big box retailer or a car company. And it was pretty telling. Martin the Philosopher is clearly too timid to be a good salesperson and Frank totally blew it by spending an hour at the copy shop printing up those tiny black and white signs. That was a huge blunder. Sure, the other team looked like hitchhikers and hobos with their cardboard signs, but they did attract plenty of customers--too many, in fact. I would have been pretty annoyed if I had to wait an hour for a car wash. But Heidi and everyone else really rolled up their sleeves and got the job done. I was pretty impressed, especially when Heidi was kneeling on her bare knees on the pavement scrubbing hubcaps.
In the end, Heidi's high volume strategy trumped Frank's up selling approach. The latter strategy seemed particularly risky considering that Frank had no way of knowing whether his team members were good salespeople. Also, the $10 price point did seem pretty low. I like Frank's go getter attitude, but it would have been smart to hold a 10 or 15 minute strategy session at the start of the task. Frank's other problem is that he doesn't listen. He talks over everyone and can't take any second-guessing or criticism. I wouldn't want him on my team.
I seriously needed an aspirin during the boardroom scene. Frank and Martin were both irritating in their own special ways. I think Ivanka got it right when she said that Martin would never fit in at the Trump Organization. He's too full of himself, and we all know there's room for only one person like that at Trump Inc. Heidi was almost as smug and annoying as Martin. Considering her team won by a slim margin and hit some pretty serious rough patches, a bit more humbleness was in order. Though I agree with the Donald's decision to can Martin, I'm not a fan of Heidi or Frank.
So far, my favorite contestant is Angela the Olympian, just because she's the only one who actually seems to have any substance. Plus, she looks like a hockey player (which she is), not a Barbie doll. I'm looking forward to watching her in action. At this point, it's hard to form an opinion on many of the characters, but I will say that a couple of them, including James the Webhead, seem to have some potential to shine and entertain. That said, I have serious doubts that natty Ivanka will be a sufficient replacement for icy Caroline and wise old George. I guess we'll find out.
January 4, 2007
Today's news
Home Depot: A Fixer-Upper?
Posted by Mike Hofman at 11:47 AM
By now, you probably have heard the news that the head of Home Depot, Bob Nardelli, is leaving the company. "Since he became chief executive... Home Depot’s stock price has languished and the company has lost market share to its chief rival, Lowe’s," the New York Times reports in today's edition.
Among other reasons for Nardelli's departure, pundits observe that his compensation was elephantine even by Corporate America's current standards. His golden parachute is reportedly in excess of $200 million. Nardelli's performance at an annual meeting last spring was considered rude, and some people say that his management style was autocratic and that he didn't do a good enough job of keeping board members happy. On the brighter side, the company was consistently profitable during his tenure.
Nardelli, who came to Home Depot from GE back in 2000 (when he didn't get the nod to replace Jack Welch), was the first chief executive from outside the company. Home Depot founders Arthur Blank and Bernie Marcus were certainly tough acts to follow; Marcus received the first ever Goldhirsh award for entrepreneurial excellence from Inc. magazine last March.
Do you think Nardelli got a fair shake? Do you see the Home Depot losing ground to Lowe's? And as the company moves forward under new leadership, what do you think its main priorities ought to be?
January 3, 2007
The Today Show Welcomes Inc. Cover Boys
Posted by Mike Hofman at 2:14 PM
Why do some ideas lodge themselves in our minds while others slip in and out? That's the question that authors Chip and Dan Heath explore in their new book Made to Stick. The book, which was only just published, has generated a lot of buzz so far. On his business book blog, Bob Sutton notes that the book was ranked #1 on Amazon.com's pre-order list. The Heath brothers also appeared on the Today Show this morning; to read or view their appearance, click here.
The current issue of Inc., now on newsstands, also features a Q&A with the authors, who talk about their understanding of what makes ideas sticky, and the marketing applications thereof. (They hasten to add that the book is applicable to a wider audience than simply marketers.) Chip Heath explains the "Made to Stick" philosophy this way: "We believe that the best ideas have most of these traits: They are simple, core messages; they are unexpected; they are concrete, credible, and emotional; and they are stories. So when John F. Kennedy said that we were going to put a man on the moon within the decade, that idea stuck because it had many of those qualities. A more current example, and our favorite marketing example, would be Jared, the Subway spokesperson who lost 245 pounds by eating Subway every day. It meets all of those criteria. But believe it or not, some top people at Subway initially objected to the campaign."
To find out why the Subway folks almost rejected Jared, check out the full Q&A by clicking here.
To read and respond to the authors' blog, go here.
How do you create a hit product? Ask Richard Thalheimer
Posted by Max Chafkin at 11:41 AM
Sharper Image founder Richard Thalheimer built a $669 million dollar enterprise by finding and hawking an odd array of items—ultrasonic rodent repellent, bulletproof vests, and something called "The Rock"—to the status-conscious, gadget-happy masses. The 58-year-old entrepreneur, who left the Sharper Image late last year after nearly thirty years at its helm, started the San Francisco-based firm while still in law school (the name referred to the quality of the copier paper he was selling). His first hit, in 1977, was a $69 runner’s watch that he sold by mail and marketed in magazines ads. In 1982, the Sharper Image landed at number 15 on the Inc. 500 list, remaining on the list through 1985.
Over the past three decades, Thalheimer learned a lot about how to spot and market new products (he is credited with discovering such unlikely hits as the Razor scooter). Recently he agreed to lend his expertise to Inc. readers.
If you want to know how to turn your clever idea into a mass market phenomenon—from sourcing to writing ad copy—shoot an email to askinc@inc.com. If your question is selected, Thalheimer will answer it in Inc.’s March issue.
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