Hot Commodity

Beautiful Vending. The concept is pretty simply actually. The company basically installs ‘Straight Up’ Vending Machines (“revolutionary, coin-operated, hair straightener machines”) at trendy, popular pubs, clubs, gyms, and shopping centers in the UK. My first thought? This is a terrible idea. Who is going to go to a pub, or club, or gym, or mall, and think ‘hmm, I just left my house 15 minutes ago but I really need to re-straighten my hair to make sure it’s perfect’? And then I realized that, oh wait, there are so many women that would absolutely do that!

Beautiful Vending has created a completely new business model: providing women with the luxury of straightening their hair on-the-go or after they face the “inevitable frustration” of stepping out into the rain, wind, heat, humidity, or whatever else the ‘Weather Gods’ can throw at us. I admit, even I have had those moments where sudden downpour has completely negated all benefits of the precious 15 minutes I spent on my hair before I went out.

The company has been particularly clever in its marketing scheme, positioning the devices as a status symbol and an absolute necessity in any chic and fashionable public place. “In today’s world image is everything. We spend billions annually on looking good not to mention the endless hours that are invested in the strive for perfection…The saviour of bad hair days has arrived, the Beautiful Vending Styler machine is now available in clubs, bars, gyms and shopping centres; so for those occasions when sleek and sexy turns to shock and horror, we have the solution,” they say. They are aggressively trying to penetrate this new market- so much so, in fact, that they recently sued a company that was trying to sell a very similar product (www.straightngo.com), a “copy cat company” as they called it, and have replaced all of straightngo’s machines with their own.

The concept is a little off the wall (literally, see below)…

but it’s definitely serving a consumer need and it seems that women all over the UK are using these machines regularly. Besides the fact that they will have no hair left by the time they are 50 because of all the damage they are inflicting on it, it sounds like a win-win situation for the female consumers and the company. Before you know it there will be hair straightener vending machines next to the hair dryer in every trendy UK hotel. Bravo Beautiful Vending!

Check them out at www.beautifulvending.com (not to be confused with www.straightngo.com ). Ha.

The Ikan is a new countertop appliance whose mission is to eliminate trips to the grocery store. In essence it serves as a barcode scanner that offers a color screen, a laser scanner, and an interior Wi-Fi antenna that connects to your home’s wireless network. Basically every time you’re about to throw away an empty container you pass it under the scanner like you would at a price-check machine at Wal-Mart. The Ikan will beep, consult its online database of products, display the name and description of the item, and then add it to your shopping list saved somewhere in cyberspace. Every few days you can review the list online at Ikan.net and click to have your groceries delivered to your house at a time that you specify.

Reactions from users so far have been pretty varied. Some people can’t believe how much time it saves while others don’t think it takes much more effort to just maintain a handwritten list. With services like Stop n’ Shop’s Peapod grocery delivery service, the added benefit of delivery via the Ikan isn’t all that alluring. Yet others praise the “environmental benefit” the company claims to imbue.

This is where my head starts to explode.

Just because a green recycle logo appears on the screen when you scan a package that’s recyclable does not make Ikan a ‘green’ company. Plus, the gadget is always on. Even though it only uses a little bit of electricity, seeing the lit up screen night and day “will bug the environmentalist in you” says the New York Times. Oh, and when they deliver the items each comes in its own white plastic bag- every package of cheese, every tub of butter. That, my friends, is not ‘green’ by any means. I’m a huge proponent of ‘environmentally friendly’ but the millions of companies that gloat just because they hired a ‘green consultant’ (what does that even mean?) or because they recycle are not really ‘green’ at all.

Back to the Ikan though. So even if it’s not quite environmentally green there should be some other benefits right? Wrong. The Ikan encourages us to buy processed foods, be completely unimaginative and buy exactly what we’ve bought before, disregard seasonal, local, and fresh foods, and avoid an occasion to get out of the house and go to the grocery store (and even potentially bond with mom or dad or daughter or son).

We are already overly reliant on our smart phones to remind us about events, birthdays, important dates, etc. We really don’t need another $400 device to further weaken our memory, make us lazier, and reinforce bad eating habits.

At a trial when judges have to decide whether sexually explicit material should be considered obscene there is no simple formula they can apply to reach an answer. Instead they are asked to use a “local yardstick” and decide whether or not the material violates community standards. In the trial of a pornographic website operator taking place in Santa Rosa County (Florida), however, the defense plans to use the Internet to change that. Mr. Lawrence Walters, the defense attorney, plans to use publicly accessible Google search data to try to persuade jurors that community members’ “interests” are pretty broad. For example, he plans to show that residents of Pensacola, Florida are more likely to use Google to search for terms like “orgy” than for “apple pie” or “watermelon” and so the sexual material distributed by his client is not outside the norm.

Of course, this makes no sense for several reasons. Firstly, if a small number of users are behind the majority of this volume then the data is completely useless. Plus the search data may not be at all relevant because the volume of Internet searches is not necessarily an indication of a community’s values anyways. Just because someone’s doing it, it doesn’t make it right. How many times have you heard that one before?

More interesting, though, is how telling this is of the value of data collected by internet companies like Google both from a commercial standpoint as well as a porthole into the thoughts/desires of users. As opposed to showing the range of explicit magazines, movies, and websites available for consumption, the defense is trying to show both availability and interest (using Google Trends which allows users to compare trends in a given area). Chris Hanson, a staff lawyer for the national office of the American Civil Liberties Union, noted that this tactic underscores the power of the Internet to reveal personal preferences- something that raises concerns about the collection of personal information. “That’s why a lot of people are nervous about Google or Yahoo having all this data,” he said.

We’ve all been told time and time again to be careful what we post on social networking site profiles or anywhere on the internet for that matter, but I don’t think we usually consider the kind of data that might be collected based simply on our search queries- text entries that we feel are completely temporary and not really saved anywhere. Reminds me of Spiderman… “With great power, comes great responsibility”… I just don’t know if that applies to us every day internet users or to the internet behemoths like Google. Are we really responsible for how our searches might be used to misrepresent the community as a whole? I don’t really have an answer right now, but I’m interested to see how the trial pans out in the next couple of weeks.

Procter & Gamble is planning to give ConAgra (one of the US’s biggest food groups) access to its industry-leading packaging and design skills in one of the largest co-operation deals struck by the world’s biggest seller of consumer goods and personal products. ConAgra will be able to use everything ranging from P&G’s non-splatter valves on plastic bottles to their advanced wrapping techniques to improve the user-friendliness of its products. This is the first time that P&G has ever allowed another company to access its unique packaging technologies, and this could mean changes to hundreds of food lines across the country.

This has the potential to become of the largest deals to be developed under P&G’s “connect and develop” open-innovation strategy and could be the blueprint for further collaboration with other companies in areas such as manufacturing, research, and marketing.

I think the recent successes under the “connect and develop” strategy can be attributed to A.G Laftley, who became P&G’s CEO in 2000. Soon after becoming chief, he set a target of having half of P&G’s innovating coming from external partnerships. Unlike other companies and chiefs that are all talk when it comes to open innovation, though, A.G Laftley and P&G are actually forming these external partnerships and reaping great benefits. I was fortunate enough to hear Mr. Laftley speak this past February at the Undergraduate Business School Leadership Conference hosted by Emory’s Goizueta Business School. The theme of the conference was innovation so he spoke about a lot of the usual things… goals, strategy, core strengths, flexible culture, etc. but the thing I found most interesting was his enthusiasm in regards to partnerships. He was a huge proponent of collaboration between firms because he said that people don’t realize that there will always be more talent outside the firm than inside (just by nature of the size of the firm in comparison to all the innovators, engineers, etc. out there). The “not made here” stigma needs to go and corporations need to recognize the value in carefully executed collaboration.

A recent article in The Economist profiled the “free-market revolution” currently taking place in Sweden’s schools. Reforms from 1994 basically allow anyone that satisfies very basic standards to open a new school and accept students at the state’s expense. The local municipality must pay the school the equivalent of how much it would have spent educating the child itself (depending on child’s age and school’s location). There cannot be any religious requirements or entrance exams and the schooling must be absolutely free for the students. What has emerged is a series of chain schools that are sweeping the country in a wave of independent educational institutions, and the share of Swedish children educated privately has risen from less than 1% to more than 10% since the reform.

The biggest chain, called Kunskapsskolan (or “Knowledge Schools”) now has 30 schools, 700 employees, and 10,000 students around the country and an operating profit of nearly SKr 62 million a year. How are they making money if they can’t charge students you may ask? Well, like IKEA, the giant Swedish furniture-maker, the schools get its customers to do much of the work themselves. Most important is the Kunskapsporten which is basically a website containing the entire syllabus. Although students attend some classes and lectures, a lot of the studying and learning is done independently and the students can work at their own level. The school saves on facilities by renting fields and classrooms a few times a week when needed.

I think this sounds like home-schooling with a little bit of tutoring and outside help. I’ve never been a huge fan of home schooling because I think one of the most vital parts of grade school is interacting with peers, learning how to live by a schedule, discovering the importance (and challenges) of team work, and being exposed to everything the world has to offer. That’s not to say I don’t have home schooled friends that are socially adept, but even they often complain of being ill prepared for college and/or the work life. Moreover they often complain about having difficulties building relationships with colleagues as they get older.

What’s worse though is the school systems attitude towards education. While many schools would be appalled at being likened to IKEA, the company’s boss goes so far as to compare his schools to McDonald’s. “If we’re religious about anything, it’s standardization. We tell our teachers it is more important to do things the same way than to do them well,” he says. He then further likens his schools to hotels and airlines which he says only make money if they are popular enough to maintain high occupancy rates. This concept sounds outrageous! You certainly aren’t going to produce the kinds of leaders and innovators and free-thinkers the world’s future needs with this approach. When it comes to education, doing things well seems pretty darn important to me. And I’m not sure comparing yourself to the airline industry is such a good idea right now anyways. The fact that it is difficult for airlines to differentiate themselves is definitely part of their problem because the only component they can really compete on is price and these schools can’t even compete on that.

Kunskapsskolan’s DIY style of education may soon spread beyond Sweden’s borders to the UK, says the article, but I sure hope it never comes here.

Yesterday Honda Motors celebrated the start of production of its FCX Clarity, the world’s first hydrogen-powered-fuel-cell vehicle intended for mass production. That’s a mouthful, but the car represents a major breakthrough in alternative energy automobiles. Honda only plans to make 200 of the FCX Clarity’s in the next three years but plans to increase production volumes in the future. The first five customers include actress Jamie Lee Curtis and a film producer in LA. The Clarity can drive 280 miles on a tank (almost as far as a gasoline car) and gets higher fuel efficiency than a gasoline car or even a hybrid- around 74 miles per gallon according to Honda.

No doubt the Clarity, and hydrogen-powered-fuel-cell vehicles still face several hurdles. The cars cost several thousand dollars to produce, but Honda predicts this will drop to less than $100,000 in under a decade since it has found ways to mass produce the car and take advantage of economies of scale. For now the company is subsidizing its customers who can lease the car for only $600 a month, which is not much more than leasing one of Honda’s top line Acura line luxury cars. The other major problem is infrastructure: very few states have built many hydrogen filling stations, though California is currently leading the way and setting an example for the rest of the states.

For now, the initial customers seem to be drawn mostly to the car’s novelty more than anything else. I can relate as my family bought me a Prius in its early stages back in 2004. Of course I loved the wonderfully quiet engine, the decreased gas costs, the ‘Park’ button, and the fact that I never had to take my key out of my purse, but most exciting was the look on people’s faces when I drove around and the awe of my friends. At the time experts predicted it would take 8-9 years to make up the premium we paid on the hybrid… now that number has dropped to approximately 3.

And that’s the thing that’s most interesting. Of course everyone is praising Honda and Toyota now that fears of major climate change, $140/barrel oil, and depleting fossil fuel resources are becoming the reality, but in the past two decades both companies have been criticized publically several times for pouring money into “unproven” technologies while refusing to follow the rest of the industry into large sport utility vehicles and pickup trucks. Well “unproven” is what innovation is all about! Now Honda is in an enviable position – Toyota too- while other companies try to deal with large inventories of gas-guzzling trucks and massive cars that requite large incentives to sell.

Just another example of how important it is to continue to invest in radical innovation (not just incremental) even while “things are good”. And as Jeff Bezos, the chief at Amazon, has always maintained, competitor-focused companies risk complacency when they become industry leaders- but customer-focused companies must always keep improving. Other CEOs and other companies, whether in the online retail industry, the automobile industry, or in ones completely unrelated, should learn a thing or two from these guys.

The Philadelphia Inquirer and Philadelphia Daily News recently ran ads for a “new airline” called Derrie-Air which supposedly charges passengers by the pound. But this new carrier will never actually take flight because it was simply a one-day advertising campaign by Philadelphia Media Holdings, the papers’ owner.. The goal was to “demonstrate the power of our brands in generating awareness and generating traffic for our advertisers, and put a smile on people’s faces” says Philadelphia Media Holdings spokesman Jay Devine. If you visit the website you’ll read that Derrie-Air is the “world’s first carbon-neutral luxury airline” and see sample rates that range from $1.40 a pound for flights from Philly to Chicago to $2.25 a pound for flights from Philly to LA. The company tracked traffic to the Derrie-Air site (http://www.flyderrie-air.com) and noted that the website drew a much higher-than-usual response rate (1.25% click-through rate compared to a national click-through of 0.05%!)

It was an interesting experiment for sure, but of course the lack of full disclosure on most of the ads has prompted concern for several journalism veterans who claim it is “clearly deception” and that “newspapers should not be in the business of deception.” Honestly, though, how else could the company conduct market research in terms of understand how advertising is going to work in this era. Plus the ads were so far-fetched that’s it hard to imagine that anyone would take them seriously. And if that wasn’t enough, the name of the airline (which means booty/back-end in French) should have given it away!

^haha

This reminds me of the “War of the Worlds” broadcast that aired over the CBS radio network on Halloween in 1938 and terrified citizens across the country. The news-bulletin format was decried as cruelly deceptive by some newspapers and public figures but it did bring fame to Welles (the director). In the same way, this has brought more attention to the worsening plight of airlines.

The difference: an airline that charges per pound is much more foreseeable in the near future than an alien attack!

…Which brings me to my main point…

I’m sympathetic to the airlines’ troubles but treating customers like freight and taking away service elements is certainly not going to help. Desperate times call for desperate measures- but the focus should be on innovations that can help airlines greatly lower their operating expenses, not on finding ways to cut corners. Some airlines have found commendable simple fixes for the time being. For example, Japan Airlines Corporation is using crockery in their cabins, which is 20% lighter than the service items they replaced, and Southwest Airlines is flying slower (cutting just 72 seconds on a Houston to LA flight can save them 8.7 gallons of fuel for each of the airline’s four daily non-stops!). This is definitely scalable in the short run. But really, what we need are large scale, sustainable solutions. In the 70s Brazil responded to the OPEC oil embargo by launching a national program to create a viable alternative to gasoline by using the nation’s sugarcane industry to produce enough ethanol to meet its economic needs. Wall Street laughed then- but who’s laughing now?

Basically, instead of trying to solve America’s obesity problem, airlines need concentrate on technology, efficiency, and sustainability…the pressure is on.

Yotel, Simon Woodroffe’s (founder of YO! Sushi back in 1997) newest undertaking was launched in July 2007 and aims to provide consumers with “luxury” hotel rooms at affordable prices. Simon came up with the idea of Japanese capsule hotels (hotel system of extremely dense occupancy popular in Japan) a while ago and recently combined forces with the designer of British Airways first class cabin, Priestman Goode, to create a chain of small, but comfortable and fashionable hotel rooms. Yotel offers “economy” and “premium” rooms that are only 7 and 10 square meters in size, respectively, but the designers have incorporated innovative use of space and impressive interactive technology (“techno wall” where iPod can be directly plugged into room’s sound system without speakers or international sockets, flat screen TV, mood lighting, etc) to make the rooms appealing. Bedside charging points, personal lighting, a dimming control and bed deployment switch allows you to work or relax without moving from the comfort of your bed. The luxury bathroom includes overhead rain shower, a hand shower, and a heated mirror among other things. The study desk folds out of the “techno wall” with its own stow able chair and a complete range of power and connectivity including free internet access. Suit and dress hanging and storage for everything from your car keys to loose change provide a place for everything. The 23”flat screen TV system mentioned earlier hangs from the wall with a varied choice of films, TV, radio, and internet. Obviously the reduced land costs due to the small room size add to Yotel’s ability to provide affordable prices even with all these features. There has even been talk of putting these rooms underground!

As more and more people have begun traveling, I think this is a great idea. As a student I love the concept because the rooms are so technologically savvy and cheap at the same time!

It is refreshing to read about an innovative start up that is not in the tech- space and and that has an idea that actually makes sense. I would love to stay in a Yotel room one day. Too bad they are currently only available near Heathrow and Gatwick Airports in the UK, but a Yotel is set to open in Amsterdam later this summer and plans to expand further are underway. An excuse to go to Europe perhaps?!

If you’re going to be traveling anytime soon, or just want to check them out, go to www.yotel.com

CBS recently aired a story entitled “The Millenials are Coming” on their show 60 Minutes, that claims that my generation (born between 1980 and 1995 and called the Millenials), is rapidly turning the workplace into a “psychological battlefield.” The article also goes on to bash our work ethic, alleges that managers must speak to us as therapists may speak to patients on TV, says that we don’t know how to take criticism, and grossly exaggerates and distorts our ambitions to become CEOs and managers at an early age. Much of this is attributed to the “coddling virus” and Wall Street Journal columnist Jeffrey Zaslow goes so far as to blame our “narcissism” on the beloved Mister Rogers.

Well, I certainly agree that we are changing and will continue to change the workplace… but aren’t our increasing technological savvy and reaching aspirations a sign of progress? We may talk, type, and text all at the same time but we get things done faster don’t we? And when it comes to work ethic I have a hard time understanding how my friends who are toiling away for 15-20 hours a day, 6-7 days a week at investment banks, hedge funds, and consulting firms, or how my peers that are working at the National Institute of Health while studying for the MCATs and running their own research projects on the side, or how other Millenials that are interning for minimal pay at a literacy camp for underprivileged children in Harlem while working a second job to make money can be construed as lacking dedication. Oh and regarding criticism: today no university course is complete without lots of room for feedback, teacher/student sessions, and peer reviews, and I believe this has carried forward into the work place as well. Millenials can handle criticism- in fact they often ask for it. And yes we may be guilty of finding pleasure in compliments and awards… but aren’t we all? I realize, of course, that I may be talking about a specific segment of the Millenial population; but so is the article. Not only does the article neglect the kinds of Milennials I just described above (for the most part), but several friends have noted that it also ignores many minority students whose childhoods were not colored with Little League, ballet classes and “you can be anything you want to be” speeches.

No doubt my generation has its flaws, but I think the article and 60 Minutes’ Morley Safer’s pessimism may be a little overstated.

For the past few years several entrepreneurs and corporate leaders have been discussing the idea of a “social stock market.” The Rockefeller Foundation recently brought this concept to the forefront of business news by pledging $500,000 to conduct a feasibility study of the concept in the UK. With this money social investment experts Mark Campanele and Pradeep Jethi plan to develop a social stock exchange (SSE) by 2009 via a “research project that will profile social enterprises and investors, assess market interest and examine the scale of potential social impact.” Supporters of this concept argue that a SSE will make it easier for green investors to find and fund social entrepreneurs and provide early stage investors and venture capitalists with a quicker exit strategy and more liquidity. SustainAbility, a consulting firm and think tank claims “money remains the main headache for social businesses; 72% of the social business surveyed cited raising money as their main challenge.”

As the world faces an increasingly urgent energy challenge the idea of a functioning SSE becomes more appealing. There are several challenges, however, some of which include:

1) How does one determine what is and isn’t a social business? This is an extremely subjective measure, as is an assessment of the “social return” of an investment.

2) The effort to create this exchange market may draw away skills and resources that should be invested in actually developing social businesses. Rather, many argue that the focus should be on developing mechanisms to help raise investments for social entrepreneurs and their companies.

3) Some social causes may prove more popular and attract more attention for emotional reasons than others. For example, Kiva.org, a microfinance website that uses the power of social networking to support microenterprise in the developing world, has already noticed that widows in Africa are almost always funded immediately while men in Central America often have to wait much longer. In fact, the Kiva team plans to experiment with higher interest rates on less popular causes to help attract funders. Similar problems may emerge in a social stock exchange.

4) Most importantly, a separate stock exchange will marginalize social enterprises by categorizing them separately. Instead, these companies should remind investors that their ability to account for social, environmental, and financial value concurrently is a legitimate sign of management quality, and the current global crises should be indications of their importance in the future. Well informed social investors will recognize that moderate or sub-par financial returns will be supplemented by social returns (although, again, I don’t know exactly how these are measured).

Although the idea of social stock exchanges has been discusses for some time now, very few examples have emerged (Sassix, Greensx). I’m not sure if this is because it is an unachievable goal (point 1 above), a bad idea (points 2, 3, and 4), or simply because a well-designed model has yet to emerge. Nevertheless, it will be interesting to track the progress of Campanele and Jethi’s research project.