Nick's Blog

If you’re feeling patriotic this 4th of July weekend, you might be tempted to grab a case of Samuel Adams, arguably the most patriotic resident of the beer aisle.  Being a naive consumer, I assumed the beer company dated back to the American Revolution, or had some connection to the historical Sam Adams, or both.

Wrong.  Samuel Adams beer was founded in 1984.  Clever marketing though.

Turns out it’s a familiar strategy for companies to play to our fond recollections of our founding fathers.

• John Hancock Insurance – founded in 1862, with no connection to John Hancock.
• The Paul Revere Corporation – founded in 1895, with no connection to Paul Revere.
• Ben Franklin stores – founded in 1877, with no connection to Ben Franklin.
• Ben Franklin Technology Partners – founded in the 1980s
• Franklin Templeton Investments – founded in 1947
• Jefferson Insurance Company – founded in 2007
• Nathan Hale Gardens – founded 1991
• Lincoln (car company) – founded in 1917

There are probably a lot more examples.  Patronize these companies and get in the American spirit!

I did find one company still in operation, Revere Copper Products, that was founded by Mr. Revere himself way back in 1801.  And apparently there is a George Washington Coffee company, founded by a George C. Washington, a distant relative of the first president who wanted to capitalize on the famous name.  And why not?  Not like he’s using it anymore.

In other news, I was really surprised during my time in Costa Rica to see the Jorge Washington elementary school in the small town of San Ramon.  I don’t believe Washington ever visited Costa Rica.  The world’s first international celebrity?

I’m not sure where I learned about Zag: The #1 Strategy of High-Performance Brands, but I think it was featured in The 100 Best Business Books of All Time.  Zag is author Marty Neumeier’s “whiteboard overview” of branding and marketing.

I didn’t know what “whiteboard overview” meant, but I was pleased to discover it meant a short book with extra-large font and lots of pictures.  Neumeier argues that a company’s biggest competitor isn’t their rival from across town, but rather the enormous amount of clutter in the marketplace.  The only way to stand out when everyone else is zigging is to zag.

If Seth Godin’s Purple Cow is the textbook on “radical differentiation,” Zag is the executive summary.

For me, these were some of the key takeaways:

• “Hit ‘em where they ain’t.”  Find new markets, or “white space,” to carve out a niche in a saturated environment.
• “Find a parade and get in front of it.”  Take advantage of trends.
• “Be the only _____.”  Do what no one else does.

I thought it was a very cool read and got some valuable ideas for the biz.  Definitely worthwhile for anyone in a marketing role or for those who own their own business.

FTC Disclosure: If you buy Zag through the above link, Amazon will pay me 4% of the purchase price.

I recently spotted this car at our local Costco.

“Whoa!” I said, “Four Jesus fish on one car.  I’ve never seen that before.”

“One for everyone in the family?” Bryn postulated.

“If Jesus is all-powerful, shouldn’t one be enough to protect the whole car?”

Let’s discuss.

First, a history lesson for those who, like me, have only a loose understanding of the fish symbolism.  The Jesus fish is officially known as an Ichthys, or ΙΧΘΥΣ, the Greek word for “fish.”  The word is also an acrostic:

• I – iota – Iēsous – Greek for “Jesus”
• X – chi – Christos – Greek for “anointed”
• Θ – theta – Theos – Greek for “God”
• Y – upsilon – yios – Greek for “son”
• Σ – sigma – sōtēr – Greek for “savior”

Beyond that, there are plenty of fish stories in the Bible so it seemed like a good fit.  The modern Jesus fish traces its origins to a remarkable guerrilla marketing effort from some Australian college students during the Vietnam War.  Today, the Jesus fish is a pervasive symbol of Christianity and a popular car-decoration, letting the world know the driver is Christian.

But typically one fish is enough to cover the whole car.  Our friends at Costco weren’t taking any chances though; they want everyone to know that the driver’s spouse and 2 kids are also Christian.  Since Jesus, being all-knowing, presumably already knows the family believes, the fish only serve the purpose of alerting other drivers.  On the road and in life, is it important and/or necessary to advertise your beliefs?  Or is it an insecurity?

Or do the parents believe the 4 Jesus fish will serve as a supernatural forcefield and protect the car and family on the road?  I think the makers and sellers of Jesus fish should propagate this belief to sell more fish.  It’s a small investment in safety, and better safe than sorry right?  And it appears to be a 5 or possibly 7-passenger car.  What about the non-family-members who might be riding along?  They could probably benefit from some Jesus protection too.

I think all this adds up to a huge business opportunity for the Jesus fish companies.  I mean why sell just one?  It’s the easiest upsell ever: Don’t you want everyone else in the car to go to heaven too?  They could literally triple or quadruple their business overnight if they could convince customers to abide by the 1-Jesus fish per passenger rule instead of the prevalent 1-Jesus fish per car rule.

Personally, I’m a fan of the Flying Spaghetti Monster car emblem.

How Restaurant.com Works

Restaurant.com sells gift certificates to local restaurants at deep discounts.  Their normal price is $10 for a $25 gift certificate, but they often run promotions where you can buy the same $25 gift certificate for just $2 or $3.

$25 worth of food for $2!  What’s the catch?

Each restaurant has their own set of restrictions.  Some of the most common Restaurant.com restrictions:

• Minimum purchase ($35 or $50)
• Dine-in only
• Not valid Friday or Saturday night
• Alcohol does not count toward minimum purchase
• Not valid toward tax or tip
• Limit 1 per table
• Not valid with any other offers
• Expires 1 year from date of issue (except in CA where apparently it is illegal for gift certificates to expire)

But abide by these rules and regulations, and the Restaurant.com gift certificates really do work!

The Business of Restaurant.com

I couldn’t find out for sure, but I don’t think Restaurant.com has a revenue-share agreement with the restaurants themselves.  Meaning whatever they charge for the gift certificate, Restaurant.com keeps 100% of the proceeds.  So restaurants are essentially “giving away” $25 gift certificates to get people in the door.  Why would a restaurant sign up for this “service?”

• Attract new customers.  Having a gift certificate mitigates risk for new customers to try a new restaurant.  Maybe they’ll become regulars.  Or maybe they’ll become regulars who always come armed with a Restaurant.com gift certificate.
• Fill empty tables.  Empty tables are a huge opportunity cost for restaurants.  Their overhead is the same whether the place is empty or packed, so might as well fill it, even if it is with low-profit-margin customers.
• Attract large parties.  Sometimes customers will come with a group of 4-6, which will more than make up for the discount given.
• Customer feedback.  Restaurant.com’s online system surveys each customer after they redeem their gift certificate.  While this feature is less valuable now that sites like Yelp are popular, it is still a chance for the restaurant to get candid feedback from customers.
• Gives the restaurant an online presence.  Obviously this feature was a bigger selling point back in 1999 before every restaurant had their own website, but is still preferable to have more web “real estate” than less.
• Cost-per-acquisition comparable or less than other advertising.  As far as I can tell, Restaurant.com is “free” for restaurants to sign up.  They just have to be willing to basically give discounts on customer checks, after certain criteria are met.  Relative to Val-Pak or other print, online, or radio advertising, Restaurant.com may actually be a cheaper method of customer acquisition.

So Restaurant.com makes their money selling gift certificates someone else has to honor.  I have to admire any business with a gross margin of 100%!  Clearly, they have some infrastructure costs, website maintenance, etc.  But their biggest cost has to be the sales staff required to sign up new restaurants and keep current accounts happy.

Restaurant.com Expert Tips

1. Read the fine print. Look for restaurants with a low minimum purchase, without day-of-week restrictions, and without exclusions on what you can order (alcohol, etc).
2. Check Yelp to see if the place is any good.  Getting a good deal on bad food isn’t really that good a deal.
3. Search for promo codes.  You can usually find one for 70-80% off — meaning your $25 gift certificate will only be $2 or $3 instead of the $10 regular price.

Here’s my “real life” example.  I searched our zip code on Restaurant.com and found a list of restaurants.  Some I’d heard of and some I’d even eaten at, but most were unfamiliar.  I was attracted to Mexxi’s Restaurant and Catering in nearby San Ramon.  Time to work the system.

1. Restrictions:  Minimum purchase $35, dine-in only, not valid toward tax or gratuity.  This means drinks count toward your $35, and you can go any day of the week.  Awesome.
2. Yelp. 4 Stars.  Also a 2009 “Best of the Bay” winner.  Score.
3. Promo code.  In under 5 seconds I found a code for 80% off.  Sweet.

So for $2, I acquired a $25 gift certificate to Mexxi’s.

Restaurant.com Cost Example

How will the math work once we go and eat?

Let’s say we order the minimum $35.  Add in tax (10%) and gratuity (18%) and the new total is $44.80… call it $45.  Knock off the $25 gift certificate and we owe $20.  Add in the $2 I paid for the gift certificate, and the out-of-pocket total is $22.  More than half off, not a bad deal!

For the restaurant though, maybe it’s not the greatest deal.  Of our $20 spent at the restaurant, $9.80 was tax and tip.  Not being familiar with typical margins at Mexican restaurants, I can’t say whether or not Mexxi’s will make money collecting $10.20 on a $35 check.  My guess is they at least break-even or else they wouldn’t be signed up with Restaurant.com.

About 6 weeks ago, I signed up to receive a free copy of Zappos.com CEO Tony Hsieh’s new book Delivering Happiness: A Path to Profits, Passion, and Purpose. Didn’t really expect them to really send it (what’s the margin in that?), but they did, and the unexpected delivery did in fact make me happy.

Delivering Happiness is part autobiography, part Zappos company history, and part human psychology study.  Hsieh (pronounced “Shay”) writes in down-to-earth prose with a dry sense of humor that makes his incredible story pretty fun to read.  He doesn’t come across as the rah-rah, rally-the-troops, vocal leader or figure-head, larger-than-life style CEO you might expect to set a 10-year goal of a billion dollars in sales.  In the middle of the dot.com crash.  In a lot of ways, he’s the anti-Mark Zuckerberg (of “I’m CEO … bitch” fame).

For me, the most interesting parts of the book were the sections Hsieh wrote about his life leading up to Zappos, and about Zappos’s struggle for survival its the early years.  Hsieh talks at length about his early entrepreneurial ventures, from worm farmer, to button-maker, to restaurateur.  He’s obviously an incredibly smart and talented person, but with trademark modesty just glosses over various details that might be construed as bragging: “I applied to Brown, UC Berkeley, Stanford, MIT, Princeton, Cornell, Yale, and Harvard.  I got into all of them,” he writes as if this were typical.  You didn’t?

After Harvard, Hsieh got a job at Oracle, but quickly became bored.  With a friend, he started a company called LinkExchange, which Microsoft bought 3 years later for $265 million.  Hsieh was 24.

With his newfound millions, Hsieh started his own venture capital firm in San Francisco.  One of the companies the firm invested in was Zappos.com, which had the preposterous idea of selling shoes over the Internet.  Those who’ve taken the Zappos tour in Henderson, NV, will have already learned that catalog shoe sales were a $2 billion business at the time, so the Zappos founders were onto something, and maybe not as crazy as everyone thought.

Ultimately Hsieh came on board the Zappos team as CEO and helped fuel their crazy growth and even crazier culture.  I feel like I’m pretty close to Zappos and have a good relationship with the company having worked with them as an affiliate for several years.  I’ve read a lot about them, visited their headquarters, and sold a ton of shoes for them.  What I didn’t realize was how close the company came to bankruptcy early on.  At one point they were within a couple weeks of running out of cash and going under.  Pretty stressful stuff.

Some people describe Zappos’ culture as cult-ish, and there’s certainly some truth to that.  But whatever.  You can’t knock it because it’s clearly working great.  Employees love it, customers love it, and investors loved it.  Win-win-win.  Well some investors didn’t love it, but they made a great return so it was probably ok.  This was one reason for last year’s sale to Amazon.  Why is culture so important at Zappos?  Because culture = brand, and every other element of a successful company’s business can and eventually will be copied.

All in all, good book.  Especially for free.  If you want to learn more about Tony Hsieh and the history of Zappos, it’s definitely worthwhile.  But if you want to learn more about really “delivering happiness” in the workplace, I think Peak by Chip Conley packs more substance.

FTC Disclosure: If you buy Delivering Happiness through the above link, Amazon will pay me 4% of the purchase price.

This is a fun game from TripAdvisor / TravelPod.  It starts out pretty easy but gets much harder.  I made it to Level 10!

Go here to play the game: http://www.tripadvisor.com/TIQGame

It looks like there’s different settings so you can play a US-only version if that might help your score.

I was enjoying some delicious watermelon the other day, and came up with a theory that it was basically sweetly flavored air.  What nutritional value could possibly come from watermelon, a water-melon?  It has no substance.  There’s really no chewing involved; it dissolves almost instantly in your mouth.  Other fruits have some “meat” to them — apples, bananas, etc, they’re pretty solid.  Even other melons require some work to eat.  Not the watermelon though.

My hypothesis was that watermelon was basically the cotton-candy of fruits: melt-in-your-mouth deliciousness, but basically no nutritional value beyond sugar.

What I Found

Turns out watermelon does have some value beyond being a low-calorie way to fill up your belly.  A 1-cup serving (who can eat just 1-cup?) contains just 46 calories, with no fat, no cholesterol, and a negligible amount of sodium.  The calories come primarily from carbs: 1g of fiber and 9g of sugars.  I was surprised to find out that watermelon also contains a small amount of protein.  From the seeds maybe?

For vitamins, watermelon is a very good source of vitamin A and vitamin C.  Who knew?  Even more surprisingly, a cup of watermelon delivers 5% of your daily value of potassium, which is about as much as half a banana.  Watermelons are rich in lycopene, a powerful antioxidant most commonly found in tomatoes.

Researchers have linked watermelon consumption to reduced blood pressure, reduced risk of kidney stones, a stronger immune system, reduced cancer risk, arthritis relief, reduced diabetes risk, reduced heart attack risk, improved night vision, and improved asthma symptoms.  What I thought was just sugar-water is pretty much a miracle food.

Haha those studies were probably sponsored by the Watermelon Farmers Association.

Next up, watermelon Jolly Ranchers.

20,000,000: That’s how many barrels of oil we consume in the U.S. every day.

In light of the massive BP oil spill in the Gulf of Mexico, there will be a lot of political pressure in the coming months to take  a hard look at the future of offshore drilling.  Is it viable, efficient, and safe for the long-run?

Well, clearly it’s not as safe as we thought.  But we’ve decided as a society, through our consumption, that the occasional catastrophic ecological disaster is worth the risk.

And we’ll make the same decision again tomorrow.  Here’s why.

Prohibiting, limiting, or creating more red tape for offshore drilling decreases supply in the near term.  With demand remaining constant and less supply, prices go up sharply.  In the long-run, this would be good because it would probably make our planet cleaner and spur innovation in new technologies and alternative fuels.  But in the short-term, the price increase would be painful for customers to swallow, especially as we struggle through this recession.

And for policy-makers, there’s no such thing as the long-run.  There’s only the next election.  If a politician sponsors some proposal that ultimately sends gas to $5 a gallon, it’s a one-way ticket out of office.

So despite the terrible disaster, I don’t expect to see any major changes to offshore drilling in the near future.  Hopefully we can learn from it though to prevent a similar spill from happening again.  After all, oil isn’t worth anything in the ground (as far as I know… geologists, a little help?), but it’s pretty valuable above ground, so you can be fairly sure some company will find a way to get it up.  And I think that’s a good thing.  Until the pipe breaks.

Trapeze school!  I mean I won’t be joining the circus anytime soon, but it was still pretty sweet.  If you’re in the area, check out Trapeze Arts in Oakland for a unique and high-flying experience.  I kind of had a hard time trusting my knees to hold me on the bar, but it worked out ok.

They don’t mess around — it was pretty much climb up, clip-in, and go.  Fun times.

Bryn was all-pro and even made this video:

But I was seriously crippled afterward.  The backs of my knees / upper calves were annihilated.  Either I was doing something wrong (a definite possibility) or they were a little tight from my earlier run.

Thanks Grace for organizing!

I enjoyed this one.

Talk is cheap. If we were serious, we would have taken action.