• "Disruptive" new book tour spurs viral reactions

    audio piece about the book tour

    Lena Dunham is no stranger to controversy. Her HBO series "Girls" (about twentysomethings in Brooklyn) has created quite a stir, due to its risqué content and issues raised about body image and feminism. 

    Now, Ms. Dunham is about to embark on a book tour, to promote her new book, "Not That Kind of Girl...a Young Woman Tells You What She's Learned," for which she received a $3.5 million advance from Random House.  She did not want to do a "boring" tour, going from bookstore to bookstore, doing a reading and signing books. Instead, she has re-invented the book tour, by booking "talent" to provide real entertainment at each scheduled stop.  She also is selling tickets to these events--at $38 apiece, which includes a signed copy of the ($28) hardcover.

    About 600 wanna-be performers for this new kind of tour sent Lena Dunham videos of their acts over the summer (many of which are posted to YouTube). Ms. Dunham had good things to say about all but three of the submissions, but narrowed her selection to seven "lucky" acts. However, Ms. Dunham ran into some bad cyber-press when it became known that she did not intend to pay any of the performers. She has since reconsidered and she will be paying these artists.

    Sources: "Turning a Book Tour Into a Literary Circus (and a Hot Ticket)," by Alexandra Alter, the New York Times, September 28, 2014.
    and other sources linked above.

    For Discussion:

    • What might make this marketing campaign an example of "disruptive innovation"?
    • How is the original decision not to pay the performers similar to the Super Bowl half-time performers not being paid? How is it different? From a marketing perspective, why do you think Lena Dunham changed her mind about compensation?

  • eBay and PayPal splitting up


    story from Bloomberg on YouTube

    When it comes to internet-based businesses, things can change quickly.  At the beginning of 2014, John Donahoe, eBay President and CEO, told analysts that, "the best way to drive long-term shareholder value is to keep eBay and PayPal together." 

    But this week, he's saying the opposite. Now the board of eBay thinks that both entities will do better if PayPal is spun off into its open IPO, within the next year.

    What changed?  It might not have been a business reason--it might have been due to pressure from "activist shareholders like Carl Icahn." Icahn believes that there is a conflict of interest between the two companies that is hampering PayPal.

    We'll see what happens.

    Sources: "eBay and PayPal Split," by Nancy Marshall-Genser, Marketplace, American Public Media, September 30, 2014.
    also, the Carl Icahn links above.

    For Discussion:

    • What is your experience with eBay and PayPal? Have you sold or purchased on eBay? By auction or firm price purchase? 
    • Would you be interested in the PayPal IPO? What would make it a good (or bad) investment?
  • Huge pension plan dumps hedge fund investments


    video (with investment spin) from Northern Trust

    "CalPERS," the California Public Employees' Retirement System, is the one of the largest public pension funds in the United States. This means that it is a world-class institutional investor. When it makes at move in the market, it is going to be noticed. And as of September 15, 2014, CalPERS decided that it would sell off its $4.5 billion in hedge funds investments.

    The reason given was "to reduce complexity and costs." Hedge funds traditionally have high fees--so that would explain the "cost" reason. But conventional wisdom would suggest that the largest pension fund in the US would have the brain power to understand the complexities of the most sophisticated of investments.

    Nevertheless, there is a fundamental difference between investing in a company that is producing a product at a profit...and investing in s hedge fund, which is placing bets on movement of various markets to reduce overall risk...but which has no actual value as a product on its own--only as an instrument betting against other bets as to how the markets will move.

    The move is a conservative move--to an investment portfolio with demonstrated real earnings. Hedge funds actually invest in strategies that contradict each other, so that the portfolio overall will always be "winning" somewhere...even if they are likely to be "losing" somewhere else.

    Source: "Hedge funds lose Calpers, and more," by James B. Stewart, New York Times, September 26, 2014.

    For Discussion:

    • How have hedge funds grown over the last 20 years?
    • What are the pros and cons of hedge funds? What does CalPERS stand to gain or lose by disinvesting?
  • An abundance of corn is not good for everyone


    image from http://wineguyworld.blogspot.com/2011/09/fresh-corn-pancetta-risotto-tis-season.html

    Lots and lots of corn was grown last year and this year. Record-breaking amounts. This is partly a good thing, since corn has more uses than ever:

    • animal feed for chickens, pigs and cows
    • ethanol
    • corn syrup
    • corn processed foods
    • fresh corn

    But there could be too much of a good thing.  When there is a lot of supply, prices fall. This past year they have fallen more than 20 percent. And there are storage and shipping costs for the surplus...

    So, farmers' profits are getting squeezed, since their other costs--for land, fertilizer, water and utilities--are either rising or staying the same.

    This has a trickle effect...since they have no money to invest in more farm equipment...which means fewer workers are needed in factories that make that equipment. So, it is ironic that a surplus can have the effect of causing a loss.

    Source: "How too much corn spells trouble far beyond the fields," by Paddy Hirsch, Marketplace Whiteboard, American Public Media, August 6, 2014.

    For Discussion: In what other arenas can an abundance create problems?

  • Fiscal years and calendar years


    Fiscal year vs. calendar year lecture

    As employees in the United States, we are automatically "calendar year" cash-basis taxpayers. This means that we are taxed on our cash receipts as employees between January 1 and December 31 of any given year.

    But if we form a small business, or if we are part of a larger corporation--any business entity--we are allowed to pick a "tax year" or "business year" that does not line up with the calendar.  The formal name for this is a "fiscal year." In the video above, the lecturer suggests that retailers might pick a July 1, 2014 to June 30, 2015 year, for example, because they would want the business activity for a single season (assuming the December holiday season is their big season) to be in one accounting period, rather than being split in two.

    In my experience, however, retailers often pick a different fiscal year--one that starts on February 1, 2014 and ends on January 31, 2014.  This accomplishes the same goal--all holiday sales are part of one accounting year, and the January "after holiday" sales can bring inventories down to the lowest level of the year as well. Because an annual physical inventory is required for every business that is publicly audited, having inventories at a low level can make this process of counting everything be a little more economical.

    Many state and local government entities have a fiscal year end of June 30. Another common fiscal year end is September 30.  If it makes business sense to not follow the calendar year, the IRS allows flexibility in establishing a fiscal year, but a business must usually get permission from the IRS to change their fiscal year end.

    Source: "Calendar or Fiscal? Which Tax Year is Right for your Small Business?" by Caron Beesley, Sba.gov The Small Business Administration, January 7, 2013

    For Discussion:

    • What fiscal year might make sense for an owner of apartment rental units in a college town? Why?
    • Do some internet research to determine why local governments often run on a fiscal year ending June 30.
  • Ethics Quiz from CNN

    Ethics Quiz from CNN

    Deep into the video linked above are 5 basic guidelines, which work in all arenas, not just work:

    • Don't do any harm
    • Make things better
    • Respect others
    • Be fair
    • Be compassionate

    Source: "Ethics Quiz," CNN, linked above.

    For Discussion:  Comment on this brief quiz with respect to its value in practice.

  • New study suggests that ameliorating climate change is close to cost-neutral

    New Climate Economy Report

    The Global Commission on the Economy and Climate has just issued a report that flies in the face of "conventional wisdom": Efforts to reverse the effects of climate change by reducing the use of carbon fuels are not as costly as some observers have suggested. New economic models have shown that predicted costs have not been offset in other studies by costs which would be incurred to maintain current practices. This new study finds that technological advances have made the changes to solar, wind and other renewable energy sources cost effective. 

    Just to put things in perspective on a personal level...since my household installed solar panels, we have generated 50,000 kilowatts of electricity, while we have used about 58,000. We only had to pay for 13.7% of what we used.  And some of those watts have gone into powering my Chevy Volt on electric power (since I almost never drive beyond the 40 mile electric radius). I pay nothing for gas per month, where I used to spend $150-$200. We have already saved enough in electric costs to equal our investment in solar paneling...and the Volt is already costing less per month than a similar car would cost. So my personal experience is that lessening my carbon footprint is also saving me money. 

    What is your experience?

    Sources: "Fixing Climate Change May Add No Costs,Report Says," by Justin Gillis, the New York Times, September 14, 2014.

    2 hour version, presented at the United Nations, of New Climate Economy Report

    written summary version of the report

    For Discussion:

    • Where do you stand on climate change? What steps have you taken on a personal level to address it?
    • What do you think of this report? What might be the "agenda" of the individuals taking part in this report? Who are the experts on the other side?
  • Good Eggs Scrambling



    Good Eggs: Food Produced with Integrity...Rob Spiro on You Tube


    Food. We all need it. And we've also read and heard about ways in which some of our food today may not be as nutritious--or even as safe--as food 50 years ago was.

    One option for food buyers is to have a more personal relationship with food growers and sellers. Good Eggs is a company that attempts to create a food distribution network that enhances the interconnectedness of the food producers and the food consumers. The internet facilitates this. But the development of relationships is also a major factor.

    Rob Spiro, the CEO of Good Eggs, is formerly the CEO of Aardvark, so has street cred both as a food consumer and as a information technology start up guru. A part of Rob's philosophy can be summed up in this way:

    "There is no doubt in my mind that the issue of our planet's health and our own health are now very important to people all over, it's not a blue-state, red-state thing."

    Sources: "Good Eggs is scrambling to deliver fresh food," by Marco della Cava, USA Today, September 14, 2014.

    "Good Eggs" the website for the Los Angeles Market.
    "Good Eggs: Food Produced with Integrity" YouTube, September 9, 2014.

    For Discussion:

    • How much do you care about the integrity of your food? List everything you have eaten in the last 3 days and then re-assess your level of care.
    • What are the marketing, sales, and "bottom line" issues in the food industry? What are the advantages and disadvantages?

  • iPhone 6 frenzy: models are "sold out"


    The Verge review of the iPhone 6 and iPhone 6 plus

    Apple's new iPhone 6 Plus--though not even available until this Friday, September 19th--is sold out according to Monday's USA Today. There will still be models available for those who stand in lines at retailers on Friday, and Verizon has some iPhone 6's available...but the 6 Plus version is sold out.

    Go figure. Yes--these phones are larger (the Plus is much larger...but not as unwieldy as a Samsung). But--really--how much more do they do?

    Regardless of the production issues and cost/benefit of the new models, it is interesting to note some of the marketing decisions related to these phones.  For example, Chine, Russia, Spain, Italy and New Zealand are all countries that will not have ANY iPhones available this Friday. They have been totally excluded...at least until September 26th.

    Source: "Dial down impatience for iPhone 6 (print) and The iPhone 6 Plus is the Must Have iPhone," by Jefferson Graham, USA Today Money, September 13, 15 (print), 2014.

    For Discussion:

    • What are the factors that go into a product being "sold out"? How can that work from a marketing standpoint?
    • What kind of smartphone (if any) do you have, and why? Do you intend to buy one of the iPhone 6 models? If so, why?

  • Excitement for Alibaba IPO builds


    Jack Ma speaking in Tokyo on July 15, 2014. Photo by Yoshikazu Tsuno AFP/Getty Images

    Alibaba looks as though it is going to be the biggest IPO (Initial Public Offering) yet.  Here are the largest IPOs on record:

    • Alibaba--estimated at $20 billion by Renaissance Capital (but other estimate up to $25 billion)--Friday, September 19, 2014.
    • Visa--$17.9 billion--March 18, 2008
    • ENEL SpA--$16.5 billion--November 1, 1999
    • Facebook--$16 billion--May 17, 2012
    • General Motors--$15.8 billion--November 17, 2010

    But being big does not mean it is a sure thing for an investor. To buy or not to buy--that is the question...With over 60% of the IPO proceeds going to insiders--and only 40% going to investment in expanding the company, it is a big risk for investors.

    Source:  "Alibaba IPO: Jack Ma's scrappy start-up takes on U.S.," by Jessica Guynn and Calum MacLeod, USA Today, September 14 & 15, 2014.

    For Discussion

    • Check out this analysis (and others): Would YOU invest in Alibaba?  Why or why not?
    • How did Alibaba start out? What is its mission?
    • How does Alibaba compare to Amazon? [List similarities and differences]
  • WinCo Foods vs. Walmart


    image from the website linked below.

    WinCo Foods is an Idaho-based grocery store chain that has earned the reputation as “Walmart’s worst nightmare.” Some of the principles that guide the production and operations of WinCo include:

    • employee ownership (rather than stockholders just interested in an investment)
    • keeping prices low low low
    • paying full health benefits to anyone working 24 or more hours per week
    • ensuring that even the floor-workers have the opportunity to earn valuable pensions
    • maintaining low overhead--cutting out middlemen in their distribution channels
    • not accepting credit cards
    • requiring customers to bag groceries themselves

    According to grocery store expert Burt Flickinger III, WinCo is “arguably … the best retailer in the western U.S.” Observers may debate that viewpoint, but Winco does serve as an example that it is possible to pay grocery workers decent wages.

    Sources: "A win-Winco situation: Grocery chain treats employees well and has low prices," by Claire Thompson, the Grist.org, August 14, 2013.
    "Trumping Walmart: Win Co Foods shows how to keep employees AND customers happy," by Lorraine Devon Wilke, addictinginfo.org, August 10, 2013.

    For Discussion:

    • How do you think WinCo compares with another privately held grocery chain--Trader Joe's?
    • In what ways does the comparison to Walmart not make sense?

  • Analyzing a sales pitch


    Talk about "meta." This is a sales pitch that is pitching how to sell anything. Derek Halpern's one line pitch via his Facebook ad is:

    He has a good point. Some people are afraid of sales, but good salespersonship is a major factor in all business success--even if it is selling yourself to your bosses as a factor in office politics.

    I am not suggesting that you go for his (supposedly) free video, but it is great for a business student to analyze the sales techniques Mr. Halpern is actually modelling as he makes his sales pitch.

    Source: "How To Sell Anything Without Being Salesy," by Derek Halpern, via YouTube, September 2014. 

    For Discussion:

    • List the sales techniques that Mr. Halpern uses in his video
    • Which techniques were the most effective for you?
    • What visual factors did he use to minimize the "salesy" part of his pitch?
    • Analyze the comments that appear on his YouTube page as well. Do you think they are genuine? Why or why not?

  • Small Business Quiz

    I ran across this Small Business Quiz posted in a blog called Just Thought You Should Know .  Bearing in mind that a small business is defined broadly as “a company with 500 or fewer employees," see how you do. Answers are at the bottom of the page:


    1. Small businesses outnumber corporations approximately ____ to ____.  
    a. 110 to 1      b. 550 to 1       c. 950 to 1      d. 1150 to 1

    2.  According to the Small Business Administration (SBA) minorities own ____ firms in the U.S. and generate $700 billion a year in revenue.   
    a. 4.1 million       b. 2 million            c. 1 million            d. ½ million

    3. Small businesses employ ____% of the country’s private workforce.   
    a. 25%             b. 36%%       c. 57%%       d. 62%

    4. Small businesses create ____ more patents per employee than large patenting companies.    
    a. 5 times   b. 7 times      c. 10 times      d. 13 times

    5. ____ to ____% of all new jobs come from small businesses. 
    a. 80 to 90%  b. 60 to 80%    c. 40-60%    d. 20 to 40%

    6. Of the more than 27 million businesses in the United States ___% have fewer than 500 employees.  
    a. 99%   b. 89%       c. 79%       d. 69%

    7. In fact, according to the SBA, ____% of US business have fewer than 20 employees.   
    a. 69%      b. 79%       c. 89%       d. 99%

    8. As of 2013, women owned ____% of all privately held business firms in the U.S.    
    a. 20      b. 30      c. 40      d. 50

    9. The state with the largest percentage of female owned business is ____ and the state with the smallest percentage is ____.       
    a. New York/Texas    b. Illinois/Georgia     c. California/Alaska      d. Florida/Ohio

    10.  ____ of small businesses are owned and operated by a single person.     
    a. 70%      b. 60%       c. 50%       d. 40%


    Sources: "Small Biz Quiz," Just Thought You Should Know, July 10, 2014.
    Aimee Groth and Kim Bhasin,   “18 Amazing Facts about Small Businesses in America,” businessinsider.com, August 24, 2011.
    Fast Facts about (and for) Female Entrepreneurs in 2014,” Do More Business, dbsquaredinc.com, January 24, 2014.
    Minority Business Enterprise,” wikipedia.org, 7/10/14.“Statistics about Business Size (including Small Business) from the U.S. Census Bureau, census.gov, 7/10/14.

    For Discussion:  Here are the answers; review them against your own and check out some of the sources listed above:

    1) d          2) a         3) c          4) d          5) d          6. a         7) c          8) b          9) c         10) a

    What are the implications of these realities?

  • Code Black: business management in an urban hospital


    interview and excerpt from Code Black a documentary about managing an urban hospital

    As the U.S. population ages, and as income inequality becomes more disparate, the management of emergency health care in urban hospitals will become more challenging. The documentary Code Black is an inside look at how County USC's emergency medicine department actually operates. County USC provides medical care to approximately 3 million uninsured Los Angeleans.

    The interview linked above (as well as the film) provides several insights into the business of emergency medicine.

    Sources: "CODE BLACK Documentary With Trailer and Dir. Ryan McGarry," an interview with the MD director, Lip Service via YouTube, June 17, 2014.
    Code Black movie trailer

    For Discussion:

    • Comment on your perceptions of Dr. McGarry's preparation from the career that was his first choice.
    • From a practice management perspective, why are positions as ER doctors becoming more competitive?
    • What were the business law issues with doing this film?
    • What business ethics issues arose in this project? To what extent did the director seem to be aware of them?
  • Different relationships with time

    RSA Animate via YouTube

    If "time is money," then our relationship with time is an important factor in business. Philip Zimbardo frames the discussion about human differences in terms of our primary orientations to time over a couple of parameters. First, he describes six different "time zones" for framing experience -- two ways that are oriented to the past, two to the present, and two ways that are future oriented.

    Experiencing time in terms of pacing can also be very different from one person to another. Time duration, in terms of life being fast-paced or slow-paced, can be influenced by culture or geography as well. 

    Generational differences also exist, and can create management challenges in the workplace. Awareness of one's own predispositions as well as knowledge about how other peoples' experience may be different can help managers be more effective.

    Source: "The Secret Power of Time," by Philip Zimbardo via RSA Animate, YouTube, May 24, 2010.
    Extended lecture

    For Discussion

    • What is your primary orientation: past, present or future?  What is your orientation regarding the duration of time?
    • Which orientations lend themselves to a more efficient or profitable workplace? Which types of businesses can benefit from the other orientations?
  • Uber or under-insured?


    image from Uber's blog

    Uber and Lyft are transportation services that provide rides in private cars for a fee. Connections between driver and rider are made through an app. At first, many drivers and riders assumed that these services would be operating outside of the kind of regulations that exist for regular taxicab drivers.Recent traffic accidents, however--including a fatality--have brought legislative attention to the insurance situation regarding Uber and Lyft.

    When these services first started up, most drivers were not insured to use their vehicles as fee-for-hire taxis.  Insurance companies exclude this use from private, personal auto insurance policies. Some drivers may have rationalized that they would lie if they were ever in an accident. They may have even thought that Uber or Lyft expected them to do this, since neither company required drivers to show evidence of special coverage. (Uber denies they ever encouraged drivers to lie...and Lyft did not return the inquiry on this matter to the author of the NYT article.)

    The situation has evolved, and the graphic above illustrates the insurance situation as it properly exists now.

    I wonder if Airbnb and other casual hotel-like services will soon be as clearly compliant with regulations as Uber is becoming.

    Source: "The question of coverage for ride service drivers," by Ron Lieber, the New York Times, September 5, 2014.

    For Discussion

    • Who do you think should be liable if the driver who is searching for an Uber fare has an accident while they are in the "available" status?  Why?
    • How do you feel about the regulations regarding operating as a hotel business versus Airbnb rental spaces? Explain your position. Would your opinion change if there was a fire started by an Airbnb renter in the apartment next to yours?
  • Chinese company to invest $1 billion in U.S. housing developments

    Image from article linked below

    The Chinese building company Landsea is planning to invest $1 billion to build developments in Simi Valley, in Dublin, CA (near San Francisco) and in Manhattan. The housing market in China has been building 12,000 homes per year, but show signs of "cooling off," so Landsea is expanding globally to the U.S.  They anticipate selling about 30% of their units to Chinese buyers, and the remaining 70% of the units to American buyers. Landsea says it plans to expand its U.S. real estate investment in the future.

    This is part of a wave of Chinese investment in U.S. real estate; the Rhodium Group recently reported that Chinese investments from April to June of 2014 totaled $400 million.

    Source: "Chinese builder Landsea to invest $1 billion in U.S. housing market," by Tim Logan, Los Angeles Times, September 4, 2014.

    For Discussion: Should the U.S. limit foreign investment in U.S. land? Why or why not?

  • Cloud security breaches and password security hygiene


    Story on Apple's iCloud breach from Bloomberg News

    The recent data breach that allowed private celebrity photos on iCloud to be downloaded by hackers is a giant heads up regarding security related to cloud storage. Businesses (particularly businesses with private client data) as well as individuals are vulnerable.

    Of even more concern to many of us, health records will all soon be housed in the cloud--posted by health care providers and us as individuals (via Apple's Health Kit app and other programs). Do we want this data in the hands of strangers?

    The problem is, the password that we use to access that health information is the most vulnerable link in the security chain. Expert observers of the recent photo breach surmise that it was not really a generalized hack, but rather unsophisticated passwords that were guessed and connected to Apple ID email accounts.

    This news, coupled with the story about the Russian hackers' claim to have gotten access to 1.2 billion usernames and passwords, MIGHT suggest that it is time to take internet password hygiene seriously.

    Source: "In the cloud, you are the weakest link," by Paddy Hirsch, Marketplace; American Public Media, September 4, 2014.

    "Russian hackers claim to have 1.2 billion usernames and passwords," by The Verge, via YouTube, August 6, 2014.

    For Discussion

    • When did you last change your passwords? Click these suggestions and take action.
    • Why does the primary suggestion in that link provide better security? What could still go wrong?
  • Labor Day question: What does "Made in the USA" really mean?


    image from iStock Photo via the article linked below

    Is the t-shirt with the label "Made in the USA" really made in America? What about the lamp that was assembled in the USA from parts manufactured partly in the USA and partly in China? What qualifies for the label?

    As it turns out, the rules are very strict. According to Julia Ensor, a Federal Trade Commission attorney, “If a marketer wants to make an unqualified ‘Made in the USA’ or other U.S. origin claim, the marketer needs to have substantiation that product was all or virtually all made in the USA."

    The document listing all of the parameters of the standard is linked here: 37-page FTC document. And, by the way, the lamp would NOT be allowed to label itself an unqualified "Made in USA" product.

    I guess the following label is trying to stretch the limits of "full disclosure":


    image from Wikipedia

    Source: "What, exactly, does 'Made in the USA' mean?" by Adriene Hill, Marketplace, American Public Media, September 1, 2014--Labor Day.

    For Discussion: Is it important to you to buy American-made products?  Why or why not?

  • Fast food workers coordinate a protest in order to get higher pay


    Last year's (2013) strike by NYC fast food workers...this year's approach is different...You Tube

    Last year, New York City fast food workers went on strike to get a $15 pay rate and the right to join a union. It was disruptive, but it was short lived and only marginally successful. The big chain fast food restaurants, such as McDonald's and KFC, were not moved to change their policies.

    Organizers are planning another event for this Thursday, September 4, 2014. In addition to fast food workers, home health-care workers are also asked to join what is being called a "protest."  This will involve work stoppages at fast food restaurants in more than 100 cities and sit-in demonstrations in more than in more than a dozen cities.  At a July convention, 1,300 fast food workers voted to stage this action, and participants say that they are willing to face being arrested.  They appear to be modeling their current protests on the protests of the civil rights movement.

    The Service Employees International Union (SEIU) has spent millions of dollars in support of this effort. The SEIU usually represents janitors and home health-care workers, but in addition to the financial support, they are encouraging their members in Atlanta, Boston, Chicago, Cleveland, Detroit and Seattle to participate in the non-violent protests.

    Fast-food operators and the parent companies say that they cannot afford higher wages and dismiss the need for unions. They also say that one-day strikes where only a few workers participate don't really hurt their businesses. Some SEIU members complain about their union's support of the fast food workers, but union leaders tell them that  higher wages for fast food workers will mean higher wages for everyone over time.  "A rising tide lifts all boats."

    Source: "Fast-Food Workers Seeking $15 Wage Are Planning Civil Disobedience," by Steven Greenhouse, New York Times, September 1, 2014.

    For Discussion:

    • How do you feel about striking workers? Are you willing to cross a picket line? Do you believe the workers or the executives at McDonald's and KFC?
    • Where else has civil disobedience been used? To what degree was it successful in that instance? Do you think a strike or sit-ins are more effective?