Recently in Business Category

Darwin Is Always Right

By Michael Mulvey on April 17, 2014 9:46 AM

Greg Hoy on the future of design/digital shops/studios/agencies (whatever the fuck you call yourself) (via A List Apart):

I recently spoke to quite a few digital design shop owners, and the consensus is that the first quarter of 2014 sucked, and for some, criminally so. Shops depleted their cash reserves, struggled to meet payroll, extended their lines of credit, and yes, downsized.

Although:

Finally, there's this thought from another successful agency head: there is a massive amount of untapped work out there that is waiting for you. You don't have to change a thing with your business, you just have to find it. Again, this speaks to the fact that you need to spend money on marketing. The industry has many more talented players than it used to.

One correction to on this last quote: You DO have to change your business. You can't just throw money at marketing. You have to know how to market your company.

If you don't know about marketing, I suggest you start reading Seth Godin's books now.

As usual, the mutants will survive.

How Siliconishly Meta

By Michael Mulvey on April 15, 2014 9:22 AM

WSJ: AngelList's Newest Experiment: a $25 Million Fund to Invest in Angel Investors:

A new experiment in startup funding could have widespread ramifications for the way venture capitalists place bets on young companies.

On Tuesday, crowdsourced fundraising site AngelList unveiled a new fund that has raised about $25 million from limited partners who traditionally invest in venture-capital funds. The fund, called Maiden Lane, will bet about $200,000 each on the site's top investors and on select startups picked by them.

...aaaaand Silicon Valley sticks its head up its own ass.

Retail Reinvented

By Michael Mulvey on April 4, 2014 5:05 PM

Amazon continues to chip away on tradition retail stores.

Interesting shit indeed.

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Value Creation

By Michael Mulvey on March 18, 2014 8:38 AM

Horace Dediu:

Indeed, since the launch of the iPhone the net profits earned by the collection of protagonists shown was $215 billion. 60% has been earned by Apple, a newcomer to the market. That figure is also consistent on an ongoing basis, having reached 60% as early as 2011 and remained in a band around that figure since.

The fact that this happened without corresponding dominance in units shipped shows evidence of something startling: Consistent value creation.

To earn profit is hard, to do so in an outsized way is very hard and to do so with consistency shows a defensibility of market access that is rarest of all. The only cases where this typical is in a monopoly or protected market situation (aka cronyism.) Apple's lack of market monopoly coupled with a (near-) monopoly in profits can only be explained by disproportionate value creation.

Value creation is one of those things Wall Street has a problem with because they can't quantify value beyond the tangibles like the quality of manufacturing.

Apple perplexes analysts because they create different types of value, the most elusive being emotional value. "You can't put a number on emotional value," they say.

Meanwhile, Apple continues to do just that.

Step 1. Step 2. ??? Profit!!!

By Michael Mulvey on February 13, 2014 1:36 PM

Editorially is shutting down. It was a site that allowed for collaborative editing and writing, and had gardered a lot of positive reviews.

Seems, despite being able to design a great product, they couldn't make money off it:

WHY NOT JUST CHARGE FOR USE?

We thought of that, and in fact, it was always our plan to do so. But Editorially is a sophisticated application that requires a team of engineers to maintain and develop. Even if all of our users paid up, it wouldn't be enough.

I'm not happy a great product failed, but that sounds like a pretty shitty business model.

After doing a little digging, their Crunchbase profile reveals they received Series A funding in January of 2012. Sounds like they didn't come up with a monetization strategy in the 2 years since and the money ran out.

This is why I think in more cases than not, taking on investors in a new business is bad if you haven't figured out your business model. Most companies don't have the scaling power of Facebook or Twitter. Those guys can integrate advertising and be okay.

Supply chains, pricing models and marketing are just as important as how pretty your product is and how well it works.

Late to the Party

By Michael Mulvey on January 31, 2014 8:36 AM

Fortune Tech were lucky duckies and got to interview Lenovo CEO Yuanqing Yang.

When asked if his company can catch up to Apple or Samsung in smartphone sales, Yang replied:

Definitely, over time. Our mission is to surpass them.

Thanks, Yang. Noted.

Let's check in each year for the next five years. See how that surpassing thing goes.

If you'll indulge me for a moment, Mister Yang, sir: Now that you own Motorola, might I suggest going all future-retro with new models that look like the StarTAC and RAZR? Kids these days eat up olde timey technology gadgets.

You know, the smartphone market is still growing, but it's also getting fairly mature. It might be wiser to use a blue ocean strategy and purse the next thing, versus swimming with the sharks in the smartphone red ocean.

Great Metaphor

By Michael Mulvey on December 17, 2013 10:21 AM

tech_startup_without_a_designer.gif

via Kerem Suer

Artrepreneurial

By Michael Mulvey on December 12, 2013 9:27 AM

My friend and studiomate Rick Kitagawa is launching a 5-week course about entrepreneurship for artists this January in San Francisco. It's called Artrepreneurship 101:

Forged from real-world experience, psychological and sociological studies and books, finance and marketing research, and the advice from people who are making a living off their art, Artrepreneurship 101 is a class designed to teach you how to deal with the emotional aspects of being a professional art hustler as well as the actual tactics and tricks I've used to make it as a professional artist. Artrepreneurship 101 is unique in that it goes beyond just telling you how to market and sell art - by using a combination of exercises and group work, we'll also tackle things like self-doubt, procrastination, and other psychological barriers that impede you from getting your important work done.

Heed to lazy asses out there:

There will be hard work ahead, so if you are looking for "Quick and EZ," then please, walk away now. I'm not going to promise you overnight success (no one is an overnight success, and if anyone promises you that, they're lying to you), but I will promise you will leave with the tools, knowledge, and support you'll need to kick-start a career in the arts.

If you are willing to commit to yourself, work hard (on the things you love), and really chase after your dreams, get ready, because enrolling in this course will be the first step in your new life.

If you're reading this and you live in the Bay Area, use the code "exhaust" to get $50 off the price of the course (good until Dec. 25).

If you're curious what the hell makes Rick Kitagawa such a smartypants, he's a sponsored artist for KRINK, Savoir-Faire, and Crescent and he runs his own screen printing company, The Lords of Print.

Profitable Losses

By Michael Mulvey on November 26, 2013 2:19 PM

From BGR:

Despite selling more than a million Xbox Ones in less than 24 hours after launch, Microsoft is not going to make money off its latest gaming console anytime soon, prompting some analysts to advise a spin-off for the Xbox division. Barron's points us to note sent on Friday by Nomura Equity Research analyst Rick Sherlund to investors claiming that Microsoft stands to lose more than $1 billion this year from its Xbox venture, a number that looks slightly better than the initial $2 billion Xbox One loss forecast from the same research firm.

???

I think it's good I'm not a "finance" or "business" person, because selling shit without making money on it doesn't make any sense to me.

The Same Typeface Bolded

By Michael Mulvey on October 28, 2013 9:14 AM

An Amazon employee from 1997-2004, Eugene Wei spells things out for people who still parrot out the lazy argument around Amazon's profitless business model:

Amazon has seen that lowering its shipping costs and increasing the speed of shipping items to customers is like a shot of adrenaline to customer's propensity to buy from them, and so it has doubled down on building more and more fulfillment centers around the world. When I joined Amazon it had one fulfillment center. Today it has dozens just in the US alone, and I would not be surprised if it has more than 100 fulfillment centers worldwide now.

That is a gargantuan investment, billions of dollars worth, and it takes a significant bite out of Amazon's free cash flow. Add in its investments in infrastructure to support a growing AWS client base, and Amazon has again hiked its fixed cost base to a higher plateau. But for Amazon this is nothing new, it's just the same typeface bolded.

And:

But Jeff [Bezos] is not wired that way. There are very few people in technology and business who are what I'd call apex predators. Jeff is one of them, the most patient and intelligent one I've met in my life. An apex predator doesn't wake up one day and decide it is done hunting. Right now I envision only one throttle to Jeff's ambitions and it is human mortality, but I would not be surprised if one day he announced he'd started another side project with Peter Thiel to work on a method of achieving immortality.

As Eugene points out, the people who bitch and moan about the profitlessness of Amazon sound a lot like the people who bitch and moan about the slow, deliberate iterations Apple has with its products.

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