Ben Perreira

My head's dropbox.

Month: May, 2012

Shouts and Whispers

When traveling (or doing business, or trying to meet women, or surfing, etc.) there are shouts and whispers. Shouts are the things everybody does because they are easy, conventional and require no mental effort. Whispers are what the few do who seem to have a pulse on inner goings-on. Where shouts zig, whispers zag.

Neither one is better. Following whispers can be incredibly stressful, but I think much more rewarding. 

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Eat, Sleep, Pee

I’m wandering Europe for the next month or so to conduct some interviews for my MBA thesis. I love checking out new cities (Helsinki and Stockholm so far), but the travel schedule can be trying.

I had the pleasure of seeing Dennis Ross speak about four years ago and subsequently reading his book “Statecraft” on diplomacy. At the talk he said, “Eat when you can, sleep when you can, and pee when you can.”

Something it’s about making things happen while everyone’s nappin’, I s’pose.

Customer “Service”

The customer is always right, according to a dated maxim. 

In reality, the customer should be taken care of as much as possible, but is often neglected when necessary. In recent years mobile network operators have dropped customers who end up causing them to lose money due to complaints.

Then some companies try, but just fail because of sloppy execution. Take Subway, which a year ago became the largest fast food chain in the world based on number of restaurants. A couple years ago Subway management must have told all employees that they had to say “Welcome to Subway” every time someone walked in the door, and they do. Problem solved? Customers cared-for?

No.

Where everything else in Subway is measured to the T, its greetings are off. “Sandwich artists” don’t look at up customers, rather they simply utter the greeting in cacophony while pushing our footlongs along. At the end of the day the insincerity is almost insulting, even at Subway. Their employees are above average for a fast food chain, but imprecise instructions from management don’t do them any favors.

As usual, the game is won or loss in the most ambiguous of territories.

Mathematics of Satisfaction

Satisfaction = Outcomes – Expectations

Expectations are the enemy. Defeat the expectations.

Finding Value

The hardest thing to do is accurately value anything. It involves finding the recipe to the secret sauce of a buyer’s perceptions of what you’re selling. Finding the accurate value for your labor would mean knowing your employer is paying you the most of all potential employers in exchange for the use of all of your assets.

Some things are relatively easy to value, like a basketball – you figure out how much it costs to make, what consumers want and how much they will pay for it. If the ball will be profitable, you make it.

A basketball player, on the other hand, is difficult to value. There is seldom a direct line between a single player and financial returns. A team can try to benchmark using market values, but those are clearly flawed at least some of the time (see: NBA and NFL, summer 2011). A player’s value can also be calculated using a combination of past contribution and projections of future value (see: Derek Jeter’s current contract). Again, this assumes things will go at least as well as planned. Not always a great bet (see: Wall Street, late summer 2008).

A great source of value comes is arbitrage. Where people and products are commodities, value has to come from getting things cheaper and faster. Where there is arbitrage – or where arbitrage is created – a brand has effectively gotten into its consumers’ minds.

Take Coca-Cola. I was at a great sandwich place in Hollywood a couple months ago and noticed Coke being sold in cans, bottles and from a fountain. A 12 ounce can of Coke cost $2.00, while a 12 ounce bottle of “Mexican” Coke cost $3.50. Two products that were initially developed to be indiscernible in two different markets are now being sold in the same market at largely disparate prices. Coca-Cola’s brand adds value already, but the alternative branding, slightly altered flavor and different packaging add (very close to) $1.50 of pure margin.