The LA Times Interview With Paul Buchheit

 

Facebook's Paul Buchheit talks about Facebook, Google and his new gig

November 12, 2010 |  5:53 pm

Earlier today we reported that Paul Buchheit, who created Gmail and founded FriendFeed,was leaving Facebook to join Y Combinator. We caught up with Buchheit on his last day at Facebook.

 

It’s interesting that Paul is leaving Facebook before an IPO (Initial Public Offering) happens. There is more to life than money when you have enough to walk away from what might be a huge payday.

On a somewhat related note, the EconTalk podcast did an interview with Paul not long after Facebook acquired his startup Friendfeed. You can find the episode on EconTalk here.

UPS delivers 'amore' - WSJ.com

Third-party logistics is a growing area at a time of globalization and cost-cutting of in-house supply-chain operations, said Kevin Sterling, senior transportation analyst at BB&T Capital Markets.

via online.wsj.com

*Possible area for students to study and become experts in. How to integrate complex supply chain distribution channels.

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New Technology to Lure Shoppers - WSJ.com

Some of the most sophisticated in-store technology is tied to consumers' mobile devices, ad executives say. Marketers are experimenting with ways to use mobile phones to provide customers with services and promotions as they shop. These range from truck reviews at car dealerships to allergy information tied to certain foods at supermarkets, Mr. Ross says.

via online.wsj.com

Sounds like Location Based Services (Foursquare etc) are on to something here. Who can get the first score?

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Ford to End Mercury

via online.wsj.com

The pace of change has quickened during the recession. This will reduce the friction caused by marketing support (ad money and dealer marketing) required for weak and dying brands.

This consolidation may lead to more models per company. This might occur to differentiate a firms model lineup against its competitors.

Marketers may find more niches to target against. Single firm car manufactures can more readily make positioning moves to serve the unmet needs of unique markets.

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Meijer's new small-store format in Niles, Illinois, could open door into urban neighborhoods | - MLive.com

For those consumers who can’t find what they are looking for, there is a kiosk online where they can order from meijer.com for home delivery.

via mlive.com

Meijer would be wise to consider free ship-to-store as an option. People could order online, have it shipped to the store, pick it up and buy other merchandise while they are there. This would expand the inventory offered without having to carry it on shelf. Consumers will also like saving on shipping costs.

Large items could be shipped direct to consumer to save them the hassle of transporting. This would be especially useful to urban dwellers that use public transportation.

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Snack Firm Diamond Foods to Buy Kettle - WSJ.com

Diamond Foods Inc. said Thursday it has agreed to acquire Kettle Foods from Lion Capital LLP for $615 million, a move that gives the snack-nuts producer a much bigger bite of the premium potato-chip market.

via online.wsj.com

*Sold for approximately 2.5 times sales.

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Fewer homeowners falling behind on mortgage payments - latimes.com

We are likely seeing the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures that started with the subprime defaults in early 2007 [and] continued with the meltdown of the California and Florida housing markets due to overbuilding and the weak loan underwriting that supported that overbuilding," Jay Brinkmann, the group's chief economist, said in a statement.

via latimes.com

It's good news that signs of improvement are becoming visible. Consumer confidence should begin to rise and take hold as the mole hill of positive economic data becomes a small skill hill. There are still risks out there, but it appears that the worst is behind us.

Businesses are cautiously looking forward to the future. We should see the total number of people employed rise even as the unemployment rate increases.

Why would the unemployment rate increase if the economy is recovering?

The way unemployment is measured, people become so discouraged that they stop looking for work and are no longer counted as being part of the labor force. If one is not considered part of the labor force one cannot be officially unemployed.

As the economy appears to be entering a recovery stage people regain the optimism that there are job opportunities to be had. These formerly discouraged people will then be counted as unemployed because they are looking for a job again. It would not surprise me if the unemployment rate jumped a bit in the coming months. Government hiring for the 2010 census may reduce or prevent the anticipated jump in the unemployment rate.

Unemployment will remain at elevated levels for the short and intermediate term. There are opportunities out there. It is advisable for people to start getting their resume and network in order. As Harvey Mackay would say, dig your well before you're thirsty. Starting preparation today will bring job offers sooner when the right job opportunity arrives. Be ready for that opportunity when it's right in front of you.

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Wal-Mart Spices Up Private Label - WSJ.com

Private label is growing in dollar sales in the United States. When consumers need to do some belt tightening they look to store brands (Typically lower priced, there are some premium PL brands that sell at higher price points).

A strong brand differentiation is a solid strategy to neutralize consumer private label substitution.

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Radical Shifts Take Hold in U.S. Manufacturing

via online.wsj.com

Specialty (unique) vs commodity (general).

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The Economy 2007-2009 / GDP / Wall Street Journal

GDP has gone up two straight quarters, rising 2.2% in the third quarter after a year of contraction. In all of 2009, GDP fell 2.4%, the biggest drop for an entire year since 10.9% in 1946. GDP rose 0.4% in 2008 and 2.1% in 2007.

via online.wsj.com

Interesting to see that both 2007 and 2008 had positive GDP growth. The 2009 GDP drop seemed a lot deeper than 2.4%. The employment situation certainly was a lot worse for people that lost their jobs or had hours reduced.

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Bloomberg: "Does the Apple iPad Make Strategic Sense?"

It's hard to bet against Apple. The two things I admire most about the company are its ability to think holistically about business models (iPod + iTues, iPhone + the App store, iPad + iBookstore) and its willingness to keep innovating. Imagine how different it would have been if Apple stopped at the first generation iPod, or just rode the iPod for as long as it could. Its willingness to step out and enter into new categories is an important lesson for all companies.

via bloomberg.com

Apple is certainly one of the five most innovative companies today. They make consumer friendly products that do new as well as old tasks (email etc) for consumers. They have been seemingly able to raise the bar continually.

If one is not risking failure, one is not making the movements that lead to innovation. For the most part, it looks like Apple got past most of the challenges they came across in the development of the iPad.

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Startups In The News

In a sign that 2010 really is a new year, several new start-up "incubators" are slated to pop up around Silicon Valley in the next few months.

Incubators typically help nurture small businesses by providing space, services and mentorship to entrepreneurs, often for a fee or an equity stake in their business. Well-known incubators include Y Combinator and Plug and Play Tech Center, with many venture-capital firms also incubating start-ups.

via online.wsj.com

As the economic recovery becomes more apparent, more people will be reporting on startups. Certainly business publications such as the Wall Street Journal and Business Week will feature them prominently in the near future.

It was not too long ago where the Wall Street Journal had a graphic indicating that every quarter about 200,000 new businesses are launched in the United States.

Link to startup graphic

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Coca Cola Bottle Innovation

Coca-Cola Co., under fire from environmentalists for using plastic bottles, has introduced a new packaging material made partly from plants. The container has "the same weight, the same feel, the same chemistry, and functions exactly the same way" as a regular plastic bottle, a Coke spokeswoman says.

via online.wsj.com

Beverage manufactures are under pressure on multiple fronts.

Environmentalists want things like carbon removed from the CPG supply chain. According to the article plastic (PET) is not recycled at a high rate. Here in Michigan there is a ten cent deposit on beverages that are carbonated. The redemption rate on recyclable containers, including cans, is reported as between 95% and 99%.

The lighter beverage makers can make containers, the more that is saved on fuel costs that are part of distribution. It's a delicate balancing act. Strength must be maintained and the package must protect the contents from changing when exposed to environmental conditions that vary. Heat and light being two that may affect the contents.

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Harley-Davidson: Tough Economy & Entry To India

One bright spot for Harley-Davidson has been its performance in international markets, where its brand has strong appeal. Last year, it announced plans to enter the fast-growing Indian motorcycle market and will introduce 12 models there this year.

via nytimes.com

Premium products were hit hard in the '07-'09 recession. Harley-Davidson is a premium product. It's rather amazing that HD was able to retain profitability for much of the recession.

It will be interesting to track how the HD entry to India progresses. The economy in India is growing very rapidly.

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The Wall Street Journal Reports on Foursquare

Tristan Walker, the head of business development for Foursquare, estimates current Foursquare app users to be around a quarter of a million. He says the company hopes to make money by working with “local mom and pop shops” as well as mid-sized retailers. For instance, he said, Tasti D-Lite recently launched a Loyalty Program on Foursquare, through which customers can earn and redeem points by tweeting or checking in on Foursquare while stopping by the ice cream chain.

via blogs.wsj.com

Interesting article. Gaining the support of small establishments on the ground is hard. Perhaps they will have the mayors and super-users (currently there are three super-user levels) spread the word on how Foursquare can help.

Three forces for local to harness.
Visits - Who When and Where?
Loyalty - How often?
Word-of-Mouth - Is the message being spread? New levels of awareness are critical for sales growth.

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Digital Content Moving From Free To Fee?

Many media analysts expect that Comcast Corp.'s plan to buy a controlling interest in NBC Universal would give it a significant say in the future of online video -- and accelerate Hulu's move to a subscription service.

via latimes.com

It appears that we may be near an inflection point for online digital media. New powers seek to tilt the field in their favor (content creators and content distributors). You can't blame them for trying to get the full price the market is willing to pay.

Questions
What content has value?
What is the value of that content?
Is there a mix that increases total profits even if the most valuable content is seemingly under priced?

What is the optimal price to maximize profits? This is currently unknown and may remain that way for several years.

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U.S. Economy Is Recovering

Jan. 21 (Bloomberg) -- The index of U.S. leading indicators rose more than anticipated in December, a sign the economy will keep growing through the first half of the year.

The New York-based Conference Board’s gauge of the outlook for the next three to six months climbed 1.1 percent, the most in three months, after increasing 1 percent in November. The gain exceeded the median forecast in a Bloomberg News survey for a 0.7 percent rise.

via bloomberg.com

This is good news. The economy is finally picking up speed and showing signs of forward progress. There are nice GDP estimates at the end of the full article on bloomberg.com.

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Kraft Foods & Cadbury Reach a Deal

After months of talks and stalled negotiations, Kraft and Cadbury finally make a deal.

Wall Street Journal:

On the takeover front, Kraft persuaded Cadbury to accept its sweetened $19.4 billion takeover offer.

Hershey made some movement to reach a deal with Cadbury while the initial gestures by Kraft were rebuffed. Perhaps the involvement by Hershey further emboldened Cadbury to hold out for a better deal longer than they might have have without Hershey’s interest.

The talks with Hershey provided Cadbury with extra leverage in negotiations with Kraft.  Hershey may have been successful in getting Kraft to pay more then they wanted to.  This deal will be worth revisiting several times in the next five years. Suggested time frames after the deal closes.

• 6 months
• 1 year
• 2 years
• 5 years

Questions

• Are there reduced costs as a result of the merger?
• Are there greater economies of scale in commodity purchasing (reduced costs/greater buying power)?
• Are Sales increasing slower, the same as, or faster than competition?Are sales growing slower, the same or faster than category growth?
• Are categories expanding or contracting?
• Are new markets being entered?