Thursday, December 30, 2010

Looking at the Small Picture First

I recently re-read the Four Hour Work Week by Tim Ferriss. And I stumbled upon one of my favorite excerps. Thanks again @Timferriss 

 

     An American businessman took a vacation to a small coastal Mexican Village on doctor's orders. Unable to sleep after an urgent phone call from the office the first morning, he walked out to the pier to clear his head. A small boat with just one fisherman had docked, and inside the boat were serveral large yellowfin tuna. The American complimented the Mexican on the quality of his fish.

     "how long did it take you to catch them?" the American asked.

     "Only a little while," the Mexican replied in suprisingly good English.

     "Why don't you stay out longer and catch more fish?" the American asked.

     "I have enough to support my family and give a few to friends," the Mexican said as he unloaded them into a basket.

     "But. . . What do you do with the rest of your time?"

     The Mexican looked and smiled. "I sleep late, fish a little, play with my children, take a siesta with my wife, Julia, and stroll into the village each evening, where I sip wine and play a guitar with my amigos. I have a full and busy life senor."

     The American laughed and stood tall. "Sir, I'm a Harvard M.B.A. and can help you. You should spend more time fishing, and with the proceeds, buy a bigger boat. In no time, you could buy several boats with the increased haul. Eventually, you would have a fleet of fishing boats."

     He continued, "Instead of selling your catch to a middleman, you would sell directly to the consumers, eventually opening your own canery. You would control the product, processing, and distribution. You would need to leave this small coastal fishing village, of course, and move to Mexico City, and then to Los Angeles, and eventually New York City, where you could run your expanding enterprise with property management."

     The Mexican fisherman asked, "But, senor, how long will all this take?"

     To which the American replied, "15-20 years. 25 tops."

     "But what then, senior?"

     The American laughed and said, "That's the best part. When the time is right, you would announce an IPO and sell your company stock to the public and become very rich. You would make millions."

     "Millions, senor? Then what?"

     "Then you would retire and move to a small coastal fishing village, where you would sleep late, fish a little, play with your kids, take a siesta with your wife, and stroll to the village in the evenings where you could sip wine and play your guitar with your amigos. . ."

 

Posted via email from chrislevy's posterous

Friday, September 24, 2010

The decline of Blockbuster

Months ago, the mere mention of bankruptcy in an article about Blockbuster would provoke seething responses from company reps. On more than one occasion, I received fuming messages from Blockbuster about how bankruptcy was a "worst-case scenario" that was nothing more than "a last resort."

Now the worst case scenario has arrived. Rumors of Chapter 11 began to bubble in August, and Bloomberg reports that Blockbuster will file for bankruptcy Thursday. (And it's now officially initiated "pre-arranged" Chapter 11 proceedings.)

We've already presented the best of Blockbuster's bad metaphors. Here, we present a timeline of how the video rental giant fell.

1985: First Blockbuster store opens in Dallas.

1994: Viacom acquires Blockbuster for $8.4 billion.

1997: Reed Hastings returns Apollo 13 to Blockbuster six weeks overdue, and is dismayed by the $40 late fee.

1998: Reed Hastings founds Netflix.

1999: Viacom holds Blockbuster IPO, valued at up to $4.8 billion.

2000: Blockbuster declines several offers to purchase Netflix for a mere $50 million. Instead, the company inks a 20-year deal to deliver on-demand movies with Enron Broadband Services, a subsidiary of energy trading giant Enron.

2001: Enron files for bankruptcy amid accounting scandal.

2002: Blockbuster debuts Super Bowl ad starring the voices of Jim Belushi and James Woods, as a rabbit and a guinea pig. The company posts a $1.6 billion loss.

2003: Netflix posts first profit, earning $6.5 million on revenues of $272 million. Redbox launches a kiosk rental service.

2004: Blockbuster enters online DVD rental market. Netflix CEO Reed Hastings tells analysts in an earnings call, "In the last six months, Blockbuster has thrown everything but the kitchen sink at us." The following day, Hastings receives a package from Blockbuster. Inside: a kitchen sink. (LOL).

2005: Blockbuster launches a marketing campaign touting its new "No Late Fees" policy. Subsequently, 48 states launch investigations into the program, charging Blockbuster with misrepresenting its late fee policy to customers. Blockbuster settles for $650,000.

2006: Blockbuster, now valued at $500 million, surpasses its goal of two million subscribers for its online platform. Netflix reaches 6.3 million subscribers by December.

2007: Blockbuster hires new CEO Jim Keyes, formerly of 7-Eleven. Keyes decides to roll back the company's Total Access plans. "Clearly our spending on that one channel was exceeding our returns," he said during a company earnings call. After losing a half-million subscribers in the third quarter, Blockbuster announces it will no longer report its subscriber count.

2008: Blockbuster proposes buying struggling electronics chain Circuit City. Blockbuster soon withdraws its offer after it's universally panned. Circuit City files for bankruptcy in November. Keyes also expresses doubt about Netflix in an interview: "I've been frankly confused by this fascination that everybody has with Netflix...Netflix doesn't really have or do anything that we can't or don't already do ourselves."

2009: Blockbuster rolls out Blockbuster Express, its kiosk system designed to compete with Redbox.

March 2010: Blockbuster touts 28-day exclusive window over Netflix for new releases. The company also reintroduces late fees, which had been costing the company $300 million in revenue annually.

May 2010: In an interview with Fast Company, Jim Keyes is asked whether Blockbuster's financial troubles were due in part to Netflix's success. "No, I don’t know where that comes from," he says. Keyes denies his company is going bankrupt.

June 2010: Keyes compares Blockbuster to Apple, claiming that its On Demand service is the equivalent of the iMac.

July 2010: Blockbuster launches Droid X app. Blockbuster is de-listed from the New York Stock Exchange after shares hit all time lows.

August 2010: Though ailing from a debt of $900 million, Blockbuster's head of digital strategy explains, "We're strategically better positioned than almost anybody out there. Never in my wildest dreams would I have aimed this high." Blockbuster adds video games to by-mail subscription plans for no additional cost, but neglects to mention that new releases will not be available for three months.

September 2010: Drowned in revenue losses of $1.1 billion, sources say Blockbuster plans to file for bankruptcy. The company is valued at just $24 million.

Posted via email from chrislevy's posterous

Tuesday, September 21, 2010

WHERE GOOD IDEAS COME FROM by Steven Johnson

 

I was lucky enough to place myself in a group of people that really strived to put hunches together and design, design, design!  To this day I think you are only as good as those that surround you!

 

 

 

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Saturday, August 28, 2010

Jeff Bezos Princeton Commencement

Jeff Bezos 2
Editor's note: These remarks are from Amazon CEO Jeff Bezos commencement speech to Princeton's Class of 2010, delivered on May 30, 2010.

As a kid, I spent my summers with my grandparents on their ranch in Texas. I helped fix windmills, vaccinate cattle, and do other chores. We also watched soap operas every afternoon, especially "Days of our Lives." My grandparents belonged to a Caravan Club, a group of Airstream trailer owners who travel together around the U.S. and Canada. And every few summers, we'd join the caravan. We'd hitch up the Airstream trailer to my grandfather's car, and off we'd go, in a line with 300 other Airstream adventurers. I loved and worshipped my grandparents and I really looked forward to these trips. On one particular trip, I was about 10 years old. I was rolling around in the big bench seat in the back of the car. My grandfather was driving. And my grandmother had the passenger seat. She smoked throughout these trips, and I hated the smell.

At that age, I'd take any excuse to make estimates and do minor arithmetic. I'd calculate our gas mileage -- figure out useless statistics on things like grocery spending. I'd been hearing an ad campaign about smoking. I can't remember the details, but basically the ad said, every puff of a cigarette takes some number of minutes off of your life: I think it might have been two minutes per puff. At any rate, I decided to do the math for my grandmother. I estimated the number of cigarettes per days, estimated the number of puffs per cigarette and so on. When I was satisfied that I'd come up with a reasonable number, I poked my head into the front of the car, tapped my grandmother on the shoulder, and proudly proclaimed, "At two minutes per puff, you've taken nine years off your life!"

I have a vivid memory of what happened, and it was not what I expected. I expected to be applauded for my cleverness and arithmetic skills. "Jeff, you're so smart. You had to have made some tricky estimates, figure out the number of minutes in a year and do some division." That's not what happened. Instead, my grandmother burst into tears. I sat in the backseat and did not know what to do. While my grandmother sat crying, my grandfather, who had been driving in silence, pulled over onto the shoulder of the highway. He got out of the car and came around and opened my door and waited for me to follow. Was I in trouble? My grandfather was a highly intelligent, quiet man. He had never said a harsh word to me, and maybe this was to be the first time? Or maybe he would ask that I get back in the car and apologize to my grandmother. I had no experience in this realm with my grandparents and no way to gauge what the consequences might be. We stopped beside the trailer. My grandfather looked at me, and after a bit of silence, he gently and calmly said, "Jeff, one day you'll understand that it's harder to be kind than clever."

What I want to talk to you about today is the difference between gifts and choices. Cleverness is a gift, kindness is a choice. Gifts are easy -- they're given after all. Choices can be hard. You can seduce yourself with your gifts if you're not careful, and if you do, it'll probably be to the detriment of your choices.

This is a group with many gifts. I'm sure one of your gifts is the gift of a smart and capable brain. I'm confident that's the case because admission is competitive and if there weren't some signs that you're clever, the dean of admission wouldn't have let you in.

Your smarts will come in handy because you will travel in a land of marvels. We humans -- plodding as we are -- will astonish ourselves. We'll invent ways to generate clean energy and a lot of it. Atom by atom, we'll assemble tiny machines that will enter cell walls and make repairs. This month comes the extraordinary but also inevitable news that we've synthesized life. In the coming years, we'll not only synthesize it, but we'll engineer it to specifications. I believe you'll even see us understand the human brain. Jules Verne, Mark Twain, Galileo, Newton -- all the curious from the ages would have wanted to be alive most of all right now. As a civilization, we will have so many gifts, just as you as individuals have so many individual gifts as you sit before me.

How will you use these gifts? And will you take pride in your gifts or pride in your choices?

I got the idea to start Amazon 16 years ago. I came across the fact that Web usage was growing at 2,300 percent per year. I'd never seen or heard of anything that grew that fast, and the idea of building an online bookstore with millions of titles -- something that simply couldn't exist in the physical world -- was very exciting to me. I had just turned 30 years old, and I'd been married for a year. I told my wife MacKenzie that I wanted to quit my job and go do this crazy thing that probably wouldn't work since most startups don't, and I wasn't sure what would happen after that. MacKenzie (also a Princeton grad and sitting here in the second row) told me I should go for it. As a young boy, I'd been a garage inventor. I'd invented an automatic gate closer out of cement-filled tires, a solar cooker that didn't work very well out of an umbrella and tinfoil, baking-pan alarms to entrap my siblings. I'd always wanted to be an inventor, and she wanted me to follow my passion.

I was working at a financial firm in New York City with a bunch of very smart people, and I had a brilliant boss that I much admired. I went to my boss and told him I wanted to start a company selling books on the Internet. He took me on a long walk in Central Park, listened carefully to me, and finally said, "That sounds like a really good idea, but it would be an even better idea for someone who didn't already have a good job." That logic made some sense to me, and he convinced me to think about it for 48 hours before making a final decision. Seen in that light, it really was a difficult choice, but ultimately, I decided I had to give it a shot. I didn't think I'd regret trying and failing. And I suspected I would always be haunted by a decision to not try at all. After much consideration, I took the less safe path to follow my passion, and I'm proud of that choice.

Tomorrow, in a very real sense, your life -- the life you author from scratch on your own -- begins.

How will you use your gifts? What choices will you make?

Will inertia be your guide, or will you follow your passions?

Will you follow dogma, or will you be original?

Will you choose a life of ease, or a life of service and adventure?

Will you wilt under criticism, or will you follow your convictions?

Will you bluff it out when you're wrong, or will you apologize?

Will you guard your heart against rejection, or will you act when you fall in love?

Will you play it safe, or will you be a little bit swashbuckling?

When it's tough, will you give up, or will you be relentless?

Will you be a cynic, or will you be a builder?

Will you be clever at the expense of others, or will you be kind?

I will hazard a prediction. When you are 80 years old, and in a quiet moment of reflection narrating for only yourself the most personal version of your life story, the telling that will be most compact and meaningful will be the series of choices you have made. In the end, we are our choices. Build yourself a great story. Thank you and good luck!

Posted via email from chrislevy's posterous