Lone Gunman

We should not hold Ama­zon in con­tempt for pres­sur­ing local inde­pen­dent book­stores to the brink of clo­sure and instead should embrace the com­pany for tak­ing advan­tage of inef­fi­cien­cies, fur­ther­ing a read­ing cul­ture, and–believe it or not–helping us ‘buy local’ more effectively.

In response to Richard Russo’s recent New York Times arti­cle berat­ing a recent not-so-well-considered Ama­zon pro­mo­tion, Farhad Man­joo takes a dif­fer­ent per­spec­tive on the Ama­zon vs. independent book­stores debate, this time com­ing down firmly in the Ama­zon camp.

I get that some peo­ple like book­stores, and they’re will­ing to pay extra to shop there. They find brows­ing through phys­i­cal books to be a med­i­ta­tive expe­ri­ence, and they enjoy some of the ancil­lary ben­e­fits of phys­i­cal­ity (authors’ read­ings, unlim­ited mag­a­zine brows­ing, in-store cof­fee shops, the warm couches that you can curl into on a cold day). And that’s fine: In the same way that I some­times wan­der into Whole Foods for the lux­u­ri­ous expe­ri­ence of buy­ing fancy food, I don’t begrudge book­store devo­tees spend­ing extra to get an expe­ri­ence they fancy.What ran­kles me, though, is the hec­tor­ing atti­tude of book­store cultists […] when they argue that read­ers who spurn indies are aban­don­ing some kind of “local” lit­er­ary cul­ture. There is lit­tle that’s “local” about most local book­stores. Unlike a farm­ers’ mar­ket, which con­nects you with the peo­ple who are sea­son­ally and sus­tain­ably tend­ing crops within dri­ving dis­tance of your house, an inde­pen­dent bookstore’s shelves don’t have much to do with your com­mu­nity. Sure, every local book­store pro­motes local authors, but its bread and but­ter is the same stuff that Ama­zon sells—mass-manufactured goods whose intel­lec­tual prop­erty was pro­duced by one of the major pub­lish­ing houses in Manhattan. […]

Wait, but what about the book­stores’ own­ers and employees—aren’t they ben­e­fit­ting from your deci­sion to buy local? Sure, but inso­far as they’re doing it inef­fi­ciently (and their prices sug­gest they are), you could argue that they’re ben­e­fit­ing at the expense of some­one else in the econ­omy. After all, if you’re spend­ing extra on books at your local indie, you’ve got less money to spend on every­thing else—including on authen­ti­cally local cul­tural expe­ri­ences. With the money you saved by buy­ing books at Ama­zon, you could have gone to see a few pro­duc­tions at your local the­ater com­pany, vis­ited your city’s museum, pur­chased some locally crafted fur­ni­ture, or spent more money at your farm­ers’ mar­ket. Each of these is a cul­tural expe­ri­ence that’s cre­ated in your community.

That said, occa­sion­ally I like to pay a ‘pre­mium’ and buy books from local stores, but not for any of the rea­sons men­tioned above. Rather, I hope for that bit of lit­er­ary serendip­ity and hap­haz­ard dis­cov­ery that only seems to hap­pen in local independents.

Among the many valid responses to the Quora ques­tion of why soft­ware devel­op­ment task esti­ma­tions are often off by a fac­tor of 2–3, Michael Wolfe, CEO of Pipewise, describes exactly why this is with­out once men­tion­ing ‘soft­ware’ or ‘project’.

Instead, Wolfe elo­quently pro­vides undoubt­edly the best anal­ogy I’ve ever heard for explain­ing the dif­fi­culty in pro­vid­ing esti­mates for soft­ware projects: a cou­ple of friends plan­ning a coastal hike from San Fran­cisco to Los Ange­les and start­ing their journey.

Their friends are wait­ing in LA, phone calls have already been made push­ing the date back…

Man, this is slow going! Sand, water, stairs, creeks, angry sea lions! We are walk­ing at most 2 miles per hour, half as fast as we wanted. We can either start walk­ing 20 hours per day, or we can push our friends out another week. OK, let’s split the dif­fer­ence: we’ll walk 12 hours per day and push our friends out til the fol­low­ing week­end. We call them and delay din­ner until the fol­low­ing Sun­day. They are a lit­tle peeved but say OK, we’ll see you then. […]

We get up the next morn­ing, ban­dage up our feet and get going. We turn a cor­ner. Shit! What’s this?

God­damn map doesn’t show this shit!. We have to walk 3 miles inland, around some fenced-off, federally-protected land, get lost twice, then make it back to the coast around noon. Most of the day gone for one mile of progress. OK, we are *not* call­ing our friends to push back again. We walk until mid­night to try to catch up and get back on schedule.

Of course, this isn’t exactly a new anal­ogy: it’s apply­ing the ideas behind Benoît Mandelbrot’s paper, How Long Is the Coast of Britain?, pub­lished back in 1967, to soft­ware esti­ma­tion. Still, it works perfectly.

If you like Wolfe’s writ­ing style and want to read more, he runs a blog called Dear Founder.

Update: And of course, there’s always O.P.C.

New and poten­tially dis­rup­tive music stream­ing ser­vices are hav­ing a hard time break­ing into the mar­ket, with many ana­lysts blam­ing their busi­ness mod­els and oth­ers blam­ing the con­trac­tual demands from labels for the trou­bles encoun­tered. There are also com­plaints about the roy­al­ties paid to artists and poor rev­enues of exist­ing ser­vices.

Michael Robert­son–founder of MP3Tunes and MP3.com–attempts to lift the veil on the indus­try by look­ing at some of the (you could safely say “unrea­son­able”) con­trac­tual demands placed on music stream­ing ser­vices by record labels:

Gen­eral deal struc­ture: Pay the largest of A) Pro-rata share of min­i­mum of $X per sub­scriber, B) Per-play costs at $Y per play, C) Z per­cent of total com­pany rev­enue, regard­less of other busi­ness areas.

Labels receive equity stake: Not only do labels get to set the price on the ser­vice, they also get par­tial own­er­ship of the company.

Up front (and/or min­i­mum) pay­ments: Means large amounts of cash are nec­es­sary to even get into the game. […] This fur­ther sti­fles inno­va­tion in ser­vices and busi­ness models.

Detailed report­ing, includ­ing monthly play counts: Pro­vid­ing addi­tional reports unre­lated to pay­ment, includ­ing over­all mar­ket share of sales in var­i­ous cat­e­gories. […] The labels effec­tively offload their busi­ness analy­sis (and the cost of such analy­sis) onto the music services.

Data nor­mal­iza­tion: With­out stan­dard nam­ing con­ven­tions and canon­i­cal meth­ods for ref­er­enc­ing artist, tracks and albums, the ser­vices are left to try and match artist, track, album names pro­vided by one label with those of another. It’s incred­i­bly inef­fi­cient, as each ser­vice must undergo this process separately.

Pub­lish­ing deals: Once you’ve signed deals with the labels, you then need to cut deals with the pub­lish­ers. […] Although you may have the rights to stream from labels, you some­time can’t get the rights to stream from the pub­lisher, or worse, even find the publisher.

Most favored nation: This is a deal term demanded by every major label that ensures the best terms pro­vided to another label are avail­able to it as well. This greatly con­stricts the abil­ity to work out unique con­trac­tual terms and fur­ther lim­its busi­ness models.

Non-disclosure: This is the main rea­son music ser­vices, not the labels, have been get­ting heat from the artist com­mu­nity. Music ser­vices can’t defend against accu­sa­tions about low artist pay­ments because they pay the labels who don’t dis­close what they’re pay­ing to the artists.

It’s worth not­ing that while Michael Robert­son is a trust­wor­thy writer and likely to have access to peo­ple who know this infor­ma­tion (if this isn’t first-hand infor­ma­tion any­way), he’s also likely to har­bour some resent­ment toward record labels from his busi­ness ven­tures. Still, even with­out a solid ref­er­ence I felt that this was too inter­est­ing to just pass up.

Years ago (and still, for cer­tain prod­ucts) con­sumers decried the idea of planned prod­uct obso­les­cence in indus­trial design: the inten­tional engi­neer­ing of prod­ucts to have a lim­ited use­ful life, such as with prod­ucts pro­duced with sealed-in bat­ter­ies or fridges that will only func­tion for seven years.

In recent years, how­ever, the need for planned obso­les­cence has moved from the sup­ply side to the demand side, with con­sumers them­selves requir­ing that their gad­gets don’t last so long that they become a bur­den: it’s desired func­tional obso­les­cence. Writ­ing about the influ­ence this has on our con­sump­tion habits, Rob Walker takes an inter­est­ing look at trends in prod­uct obso­les­cence and the rise of func­tional obso­les­cence as a demand-side phe­nom­ena rather than a supply-side one.

Con­sider that most ubiq­ui­tous gad­get, the mobile phone. […] The typ­i­cal Amer­i­can gets a new one every 18 months. […] The prob­lem, if that’s the right word for it, is that new devices per­form more func­tions, faster—and peo­ple, as a result, want them. […] The light-speed inno­va­tions in con­sumer elec­tron­ics have turned many of us into ser­ial replac­ers. A dealer in vin­tage home-entertainment equip­ment recently con­vinced me that it used to be pos­si­ble to buy a top-notch stereo sys­tem that really would func­tion admirably for decades. Imag­ine, by con­trast, that tomor­row some com­pany unveiled a cell phone guar­an­teed to last for 20 years. Who would gen­uinely want it? It’s not our devices that wear thin, it’s our patience with them.

The very real prob­lem of elec­tronic waste makes peo­ple like me hes­i­tate to replace good-working-order pos­ses­sions. Yet at the same time, we like to stay cur­rent with new tech­no­log­i­cal inno­va­tions. So rather than pro­vide evi­dence of some cyn­i­cal cor­po­rate strat­egy, our gad­gets’ minor mal­func­tions or dis­ap­point­ing fea­tures or unac­cept­ably slow speeds largely pro­vide an excuse to replace them—with a lighter lap­top, a slim­mer tablet, a clearer e-book reader. Obso­les­cence isn’t some­thing com­pa­nies are forc­ing on us. It’s progress, and it’s some­thing we pretty much demand. As usual, the mar­ket gives us exactly what we want.

I don’t take infomer­cials very seri­ously, mainly due to how hilar­i­ous and absurd they are. How­ever I’ve now been won over and can see their poten­tial for cer­tain product–market com­bi­na­tions. How did this mirac­u­lous change come about? Through a sur­pris­ingly enjoy­able inter­view between Andrew Warner and the mas­ter of the infomer­cial, Tim Hawthorne.

From his many years of expe­ri­ence (he cre­ated the fourth ever infomer­cial, devel­op­ing over 300 since then; has worked with some well-respected com­pa­nies such as Apple, Nikon, 3M and Braun; and is respon­si­ble for about a bil­lion dol­lars in client sales), Hawthorne talks exten­sively and insight­fuly on the many infomer­cial sales tech­niques that his data show are the most per­sua­sive. Two items that I par­tic­u­larly liked:

The most per­sua­sive deal types:

Buy one get one free, or get the sec­ond one at half price. So you’re get­ting an imme­di­ate dis­count. Buy one and get a sec­ond one super size, so you’re actu­ally dou­bling or tripling the order. Buy one and the sec­ond is actu­ally going to be dou­ble the size. Drop a pay­ment. Let’s say that your offer is three pay­ments of $19.95, that’s your ini­tial offer. But wait, if you call now, if you order now, we’ll actu­ally make one pay­ment for you. So it’s only two pay­ments of $19.95. So that’s drop a payment. […]

I think one of the most pow­er­ful bonuses or pre­mi­ums that you can offer is free ship­ping. A lot of peo­ple don’t under­stand the power of this. For some rea­son, if I’m going to pay $99.95 and there’s an addi­tional $9.95 or $14.95 or $19.95 for ship­ping, that addi­tional amount which is very impor­tant to many ven­dors, if you can sac­ri­fice that, it has an amaz­ing impact on people.

Words and phrases that trig­ger action:

“Free” is still, I think, and will always be con­sid­ered the most pow­er­ful word in sell­ing. After that we would prob­a­bly think of words such as now, you or your, easy, eas­ily, guar­an­tee, break-through, rev­o­lu­tion­ary, fast, quick, instant, magic, new, spe­cial, exclu­sive, lim­ited time, risk free, only, save, money back, money back guar­an­tee, call now, and in terms of a clas­sic phrase, “but wait, there’s more”.

Every­body kinds of kicks around that par­tic­u­lar phrase and it’s used often. One of the rea­sons it’s used so often is that it’s so effective.