Label Insight says that it is powering transparency at the intersection of retailers, brands, and consumers with an industry-leading platform for CPG product attribute data covering more than 80 percent of top-selling food, pet, and personal care items in the U.S. They started out in the pre-cell era by literally going into grocery stores and manually copying the product labels and entering the information into a spreadsheet. That has changed, but what hasn’t changed is their value-driven innovative company culture.
Dagan Xavier, Co-founder and SVP of Data and Nutrition Sciences at Label Insight, recently talked about how the company started and how the company continues to innovate, in a feature on Entrepreneur:
At the Intersection of Brands, Retailers, and Consumers
Label Insight sits at the intersection of brands, retailers, and consumers. Our data and analytics essentially allow those brands and retailers to increase sales by empowering the consumer to make better-educated decisions around the products that they buy. Why did I start this business? This was a pure family need. When someone in your family is sick and they need help, the first thing you do is you go and help them.
I can remember the call that I got when I was at University, second year. I got a call from my Dad and he asked me to come home because he needed some help to determine what brand of noodles he could eat based on his new diet. Ultimately, it came down to what brand of ramen noodles he could consume that were low in fat, low in sodium, didn’t have any artificial ingredients, and no trans fat.
About Label Insight
Problem Solving is ‘Full of Massive Innovation
If anyone out there can answer those four questions on all the ramen products out there I would love them to come work for us. Essentially, that’s what started this. Innovative problem solving is the most innovative and most useful when it’s created from a real need. I think back to when we started this company. This was pre-cell phone days. We would walk down the aisles of supermarkets and use our dictaphones to collect information on the back of packages and dictate it out to Excel to create our database. That’s an incredibly manual process.
In over two years of work, we collected 8,000 products. Not very much, but in those days it was a feat. Having those problems and going through that manual workload, that’s when innovation really happens and starts to occur. I would say that our whole data-ingestion process is symptomatic of that manual history and is full of massive innovation.
Our Key Value is Intellectual Honesty
When I’m seeing Label Insight succeed it’s based on a shared set of values. It’s based on having multiple people moving in the same direction. The way that you can do that is by being mission-driven and value-based. Our mission is clear, we’re out to help people make educated choices around the products that they make. As a way to keep everyone going and moving in the right direction, it has to be about values as well.
We have a number of values that we hold true to ourselves. Obviously transparency, it’s not a trend it’s a right. Other values we hold are collaboration, intellectual honesty, iteration and Innovation, and quality driven. These are all really important values that allow us to get on the same page as each other and be paddling in the right direction.
When I think about a particular value that stands out to me, it’s intellectual honesty. I believe that whenever we are looking at hiring folks and bringing people into the team, that’s the key value that I’m looking for. That ability to admit when you are wrong and to be brutally honest at times that’s the backbone, that’s the base that you need to be able to perform. We are not looking to just perform here. We are looking to change an industry. So we need folks who are able to get us there. That’s why I find that value particularly important.
Problem Solving is ‘Full of Massive Innovation,’ Says Label Insight Co-founder
Starbucks has dramatically increased the use of AI-powered customer insights to drive growth, says Starbucks CEO Kevin Johnson. During the most recent holiday season, Starbucks made data-driven decisions on a variety of items from the type of holiday cups they were offering to how they promoted gift cards, all designed to increase sales. Johnson credits these new customer insights for improving gift card sales by four percent over last years holiday period.
Kevin Johnson, CEO of Starbucks, discussed in an interview on CNBC how analytics, artificial intelligence, personalization, and technology are now driving marketing, sales, and business decisions:
AI is Making Us a Better Company
We have dramatically stepped up the focus on customer insight. We are using technology to help inform us of what customers want, what they need, and what they think of Starbucks. That informed our entire holiday plan this year, and we had a fantastic holiday.
We are driving much more use of analytics, artificial intelligence, personalization, and technology to help us be more informed and more connected to our customers. That is making us a better company.
Customer Insights Driving Starbucks Growth
I’ll frame it around customer insights. Coming out of last year’s holiday we used a number of tools and research to give us customer insights on what customers really appreciated and loved about Starbucks at the holiday. That informed everything from the design of our cups to utilizing the reusable red cup promotion that we launched. We saw gift card sales grow four percent year-on-year in the quarter.
That was a function of customer insight and research that we did. This holiday, in many ways, was informed by that insight. That’s just an example of what we’re doing. We’re using all kinds of data, customer focus groups, and things to help us be more informed and more front-footed on the trends and the things that customers really want to see from Starbucks.
Starbucks CEO Kevin Johnson isn’t worried about competitors in the fast-growing coffee market in China. He says that competition is actually broadening the addressable market by introducing tea drinking Chinese to coffee. Starbucks has nearly 3,700 stores in China already and is generating double-digit transaction growth. For Starbucks, their growth in China and around the world continues to be driven by providing a unique customer experience that is like no other in their industry.
Kevin Johnson, CEO of Starbucks, talked about how their unique customer experience is driving massive growth in China in an interview on CNBC:
We Are Playing the Long Game in China
The number one metric that we look at in China is total transaction growth. Those total transactions come from a combination of new stores that we build as well as same-store comps. We increased the number of stores in China by 18 percent this quarter and so if you put all of that together we had double-digit transaction growth in China. China is a market that is all about first mover advantage. It’s about building new stores and expanding our presence.
In fact, we’re now approaching 3,700 stores in China. We entered ten new cities last quarter and we’re now in 158 cities in China. The addressable market and the growth opportunity in China is significant. So the priority we have is really expanding our footprint while we continue to enhance the experience in our stores, drive beverage innovation, and enable new channels for customers to engage with Starbucks, as we are with Starbucks Delivers. We are playing the long game in China.
Starbucks Coming Out on Top in China
Whenever you have a large addressable market around coffee in China you’re going to have a lot of competitors come in. Some of those competitors are going to try and differentiate in different ways. They’re going to have to use price and be highly promotional in what they do. For Starbucks, we differentiate on the in-store experience. We differentiate on the quality of our coffee and we differentiate on the digital reach that we have through our partnership with Alibaba.
The one thing that the competition is certainly doing in China is expanding the addressable market for coffee. It’s introducing the Chinese consumer, who is primarily a tea drinking culture, to coffee. That’s helpful for the growth in the addressable market for Starbucks. We’re confident we’re going to play our game. We know how to create the kind of experience and leverage the brand strength that we have in China to create that unique differentiated opportunity for us to engage in customers. So I think if you look at the overall landscape of who is growing the most share of transactions and engagement with the customer, I think Starbucks comes out on top.
When you look at a competitor in China like Luckin and they talk about the number of units that they’re growing, I think sometimes a unit would look perhaps like a Starbucks store, but most of the times they look like a point of presence. That said, we have a lot of points of presence. We’re at 3,700 stores. We’ve also got our global coffee alliance with Nestle coming in with food services and CPG.
Extending In-Store Experience With a Digital Mobile Relationship
The reason you want to come to Starbucks is because we create that unique customer experience. We serve the world’s finest Arabica coffee. Our partners will handcraft that beverage to your perfection. We create an experience like no other in the industry. We’re going to continue to stay true to the experience we create in our stores and how we extend that experience with a digital mobile relationship.
The China Digital partnership with Alibaba is making great progress. We now have the virtual Starbucks store integrated into the Alibaba properties. That’s now reaching 600 million Chinese who use Alibaba on a daily basis. We think the strategy that we’re on is the right one. It’s it’s allowing us to continue to grow transactions in the double digits and we’re going to continue to play the long game with the strategy that made Starbucks what it is today in China.
Starbucks CEO Kevin Johnson says that cannabis-infused beverages are not on the roadmap. However, he seems open to that possibility in the future.
“You can’t get a cannabis triple venti today,” said Johnson in an interview on CNBC. “Certainly we’re well aware of what’s happening around CBD and THC and all the trends in the industry. There are a lot of of issues that we would have to think through on that. Right now that’s not on the roadmap. But we are mindful of the trends. We’re mindful of how CBD oils and CBD is viewed as a health and wellness item, so we’re going to keep watching this.”
“We’re staying focused on the beverage innovation that we’re driving and right now and it’s all about nitro,” the Starbucks CEO added. “We talked yesterday during the earnings call about how we’re deploying nitro and nitro cold brew across our entire portfolio of company operated stores. But we will always stay on top of consumer trends and new ideas.”
It does seem like Starbucks is leaving some room to jump into this market at a later date. So maybe someday, you will be able to order that cannabis triple venti! Could a future partnership with Canopy Growth be in their future?
Autonomous is an enormous technology, says Uber CEO Dara Khosrowshahi. Following the unfortunate accident that happened last year in Arizona, Uber took a retreat from autonomous vehicles. However, Uber has taken that time to rebuild how they are building that product.
“It will bring huge strides in safety, and huge strides in making transportation available to more people around the world,” says Khosrowshahi. “Anytime you have a technology that is as earth-shaking as autonomous, it doesn’t come easy.”
Dara Khosrowshahi, CEO of Uber, discusses their short-term retreat from autonomous vehicles and the growth and profitability of Uber going forward in an interview on CNBC at Davos 2019:
Autonomous is an Enormous Technology
We certainly took a retreat (from autonomous vehicles) based on the accident that happened that last year. We took that opportunity to really rebuild how we built product. But I do think that autonomous is an enormous technology. It will bring huge strides in safety, and huge strides in making transportation available to more people around the world. Anytime you have a technology that is as earth-shaking as autonomous, it doesn’t come easy.
If there’s one thing that Uber is about it’s about innovation risk. I don’t think it’s a have-to, it’s we want to be at the forefront. We want to be at the forefront of building out autonomous technology in a live network. We don’t need to build it for every single circumstance. We don’t need to build it for bad weather. We don’t need to build it for if they’re accidents, etc. We can build autonomous and launch it for simple situations one step at a time.
I think that the timeline (of launching autonomous) has proven to be more difficult than we thought. I think that regulation is going to play a big part in that introduction. I do think that because we run a live network the problem that we’re solving for us is going to be simpler than than anyone else. We are completely open to partnering with third-party autonomous because ultimately we believe in the technology. We want to be a part of it. It’s a great opportunity, but ultimately we think this will be good for society.
We Want to Build Sustainable Profitable Growth
What we want to build is sustainable growth that can be profitable. Sometimes near-term, for example, if you look at one of our largest and fastest growing businesses UberEats, home delivery of food. It delivers from over 200,000 restaurants in under 30 minutes. It’s a magical experience.
We have had cities in which the Eats product has become profitable. but essentially once we saw that program working we’re accelerating city launches and early cities early on are unprofitable. But we know that the model is sustainably profitable over a long period of time. So we think about near-term growth with long term profits.
Growth Now in Concert with City Regulators
I think that one area that we can control is making sure that our growth is now in concert with regulators the cities in which we operate. I think that in the past, and to some extent was a strength, but it’s not something that is sustainable, we grew just purely based on consumer demand.
We didn’t necessarily take the time to have a dialogue with society, with regulators, and with cities as to growth that serves all of the constituencies. We’re having that dialogue now. It sometimes causes complexity in our model and sometimes causes us to pause, but it creates a lasting model.
What’s special about Uber is we’re part of life in the cities. Were a huge labor force etc., so we have got to take that time and have that dialogue. In the majority of municipalities, their goal is to improve life for their citizens and life with Uber, life with UberEats, life with Jump Bikes is better. It’s really a question of how we can achieve our goals but be respectful of some of the limits that they put on us.
This Isn’t About Privacy, These Are People’s Lives
What was happening was that my teams and operating teams, the folks on the ground in Mexico, in Brazil, and in the US, they all came to me and said, “Listen with the numbers getting this big and with our platform getting as large we have to take responsibility for the platform.” I’ve got to give credit to my operators. This wasn’t like the moral CEO coming down.
This isn’t about privacy, these are people’s lives. We’ve got to invest in safety even if it causes short-term pain and growth. We came together as a team and we’re building technology, we’re making sure that the background checks, etc., all of that is being done. We have a 911 button just in case something happens. There’s a whole host of activity going into safety and it came from the team.
Bank of America has gone massively digital and it is now powering their growth. “We had a billion and a half logins to our apps last quarter,” says Bank of America CEO Brian Moynihan. “This is not theoretical. We are one of the largest digital companies. We are also one of the largest physical companies. It takes both high-touch and high-tech.”
On the consumer side, they have a branch in their pocket. Anything you can do at a branch, in the traditional banking sense, or over the phone, you can do in your app. There are 36 million digital users, 26 million mobile users who are not digital users growing at 10-15 percent a year. Sales are at the 20 percent level and 25 percent of all sales are digital. Our digital mortgage product is growing. Our digital auto product is growing. What you can do is do everything.
Half of the checks we have are deposited at the ATM and a little over 25 percent of deposits are by people taking pictures of them with their phone. It’s the exact same activity but you don’t have to go anywhere. You can do everything.
Then you have Erica. We have five million Erica users and it only started a little over a year ago. That’s where people can just talk and ask questions and it learns about you. It’s artificial intelligence voice recognition program. When you pay your bills you just say, “I need to pay X.” It will say, “You want to pay X, here is the amount.” Think about how easy it is versus writing out checks or even going into digital bill payment. The technology enables consumers to do more faster and easier.
Apps on the Institutional Side Getting Interesting Too
The applications on the institutional side are getting interesting too. Believe it or not, corporate treasurers want mobile capabilities also. With Cashpro Mobile they can initiate a $5 million wire on a mobile device while sitting in a meeting with all the controls around it and all of the foreign currency features.
To me, it was… really? But absolutely, that’s the way they want to do it because that’s the way they are used to operating.
It Takes Both High-Touch and High-Tech
We had a billion and a half logins to our apps last quarter. This is not theoretical. We are one of the largest digital companies. We are also one of the largest physical companies. It takes both high-touch and high-tech.
What have we learned? We are always a curious company and always out their learning. When we go and talk to fintech companies or observe what they are doing, more importantly, we’re trying to learn what does the customer see in that activity that they don’t see in our activity? Then we look at how we can adapt to that.
Are we interested in acquiring fintech companies? There will be no acquisitions, we just work.
Small Business Still Very Optimistic About the Economy
We do more small business than most of the people in the world. When you think about small business, what’s interesting is that the business community in the United States is very optimistic still. Even though they are not as optimistic as they were at the highest point they’re still very optimistic on a relative basis.
In our small business surveys late last Fall they are saying, “We’re going to invest more. We’re going to hire more. We can’t get people.” Those are the common themes.
I think it is a good year for investment as long as we solve a couple of key issues. We have to get the sutdown done. The incremental impact of the workers is important but it’s also just the process of getting approvals and stuff is being held up. Then ultimately the trade situation has to be solved. I’m not giving you any news, everybody says that, but it’s time to get some of this stuff done.
Blockbuster was an $8.4 billion company that was taken down by a startup called Netflix that successfully shifted the habits of consumers. Blockbuster thought that people wanted the experience of picking out physical DVD’s and would not want to just download a movie. They were wrong and today Blockbuster is out of business and Netflix is valued at $147 million.
I want to tell you a story about a company that’s going to be a love story for some, a horror story for a few, a fantasy type of story for others, and then obviously a money-making story for the people that were involved. But before I tell you the story about this company I want you to be thinking about two words; shifting habits. I’ll come back to those two words in a minute.
Let me tell you this story about this company. It’s 1984, a company gets started, it has got a yellow and a blue logo and it’s called Blockbuster. Blockbuster is a great story. You’d go to Blockbuster with your girlfriend or your husband or your wife and say, “Do you want to go to the horror section?” “Oh no, maybe comedy. I’m almost certain this movie’s not going to be available.”
Blockbuster: Nobody Wants to Download Movies
That’s 1984, the year got started. Blockbuster after only nine years was worth $8.4 billion in 1993. By 1997, a company got started called Netflix and it’s only worth $50 million dollars three years later. At one point Blockbuster could have bought Netflix for $50 million. But they said, “I just don’t think that’s the direction the consumer is going. I don’t think they’re going to shift their habits to this area because people like the experience of coming to Blockbuster and actually seeing the DVDs they pick up. Nobody wants to just download the movies. It’s not going to be taking place. People are smarter than that,”
Well, 149 million users worldwide disagreed with them. Netflix went from being a $50 million company in 2002 to today it’s a $147 billion company. By the way, Blockbuster on September 23rd, 2010, went out of business. They filed bankruptcy for $930 million and they’re gone. What’s the moral the story? Netflix since Christmas their stock is up 50 percent. Just in 2019, in the first 19 days of the year, Netflix is up 35 percent.
The Moral of the Story is That Netflix Shifted Our Habits
Netflix is up. That’s a love story for some, a horror story for a few, a fantasy type of story for others, and an obviously money-making story for those of us that were involved. Now having said that, what do you mean by shifting habits? So many people want to be innovators and shift their industry. I want to be in there, but I want to be disrupting my industry.
Bezos shifted our habits and we stopped going to bookstores to buy books. He said I’m going to shift your habit of the way you buy books. That’s why Walmart is afraid of Amazon. Instagram shifted our habits of the way we looked at albums. When’s the last time you bought an album? The list goes on. Wikipedia put encyclopedia companies out of business. How many times have you gone to Wikipedia to find out about different things? All the time. The moral of the story is that Netflix shifted our habits.
Disney is about to come out with Disney Flicks or whatever they want to call it. I know one of the Disney executives said, “We’re not really trying to compete with Netflix. We like Netflix. I use Netflix. We are just going to put out our Marvel products and Star Wars products and all this other stuff.” But Netflix becomes the one that led the way.
No one even thinks about Red Box anymore because Red Box at first made sense. By the way, if you say I still use Red Box, you’re probably over 40 years old. I’m not trying to offend you, but if you still use Red Box you’re over 40. You go to Kroger or Ralph’s to get your movies.
Start Thinking About Shifting Habits
Stop trying to come up with a great idea. Starts thinking about shifting habits. Not Seven Habits of Highly Effective People. Shifting habits. How do people buy your product? How can you shift that habit? How do people buy the product from you? How can you shift that habit? Those who can become the Bezos, become the Zucks, become whatever you want to call it of their industry because they shifted someone’s habit.
That’s all you got to be looking at. Not all this other crazy fancy stuff. So by the way, well Facebook ever be put out of business? Yes, by somebody who shifts our habit. Zuck says, “There’s no way in the world that’s the direction people are going to go to.” The will go that direction. That could also happen to Amazon and other companies as long as a new innovator is able to shift our habit.
Nordstrom is the class act of the department store segment and doing everything right says Former Toys ‘R’ Us CEO, Gerald Storch. Unfortunately, that is not enough according to Storch because customers are deserting malls for ecommerce.
He predicts that only top-tier malls will survive and even those will have to adapt to attract millennials. For Nordstrom and other department stores to survive and thrive they will have to quickly need to learn how to make money on the internet.
Gerald Storch, former CEO of Toys ‘R’ Us and CEO of Storch Advisors, discusses the death of most malls and the need for department stores like Nordstrom to do better at making money on the internet on Fox Business:
Nordstrom “Doing Everything Right” But It’s Not Enough
Nordstrom is the class act of the department store segment. They are doing everything right. Everything people say they should be doing but it’s not enough. Their stores are in great condition. They invest in their stores, they’re beautiful. They invest in their people, their service is the best in the industry. You love going to Nordstrom.
They have great internet and have invested in their ecommerce sites. They have great data management and customer relationship management skills. They have great style, their merchandise is pretty good.
Customers Rapidly Deserting Malls for Ecommerce
But it’s not enough. There is a hole in the bottom of the boat and the water is pouring in and they can’t bail fast enough. That hole is that customers are deserting the malls and they are going to mass merchants off the malls and of course to ecommerce.
I don’t think it is the demise of the department store. I think the all-channel model will still succeed. But in order to be profitable, a department store like Nordstrom needs to learn how to make more money on the internet. You can’t just say do all the things in the bricks and mortar store, make them more experiential, etc. They’ve been doing that and it’s not enough.
You can see that in their results. Their high-end stores were up in sales only three-tenths of one percent over the holiday period. That includes their ecommerce which was up 18 percent. You don’t have to know a lot of algebra to know that their physical bricks and mortar stores were sharply negative during this season.
You need to embrace the inevitable. You can’t just build a sort of fancier stagecoach in order to prevent the advent of the automobile. You have to build a profitable ecommerce site. That requires redoing their business system in order to be profitable online.
Only the Best Malls Remain Viable Enough to Transform
We talk about ‘A Malls’, ‘B Malls’, and ‘C Malls’. The ‘C Malls’ are gone. They will become doctors offices, insurance offices, places to get your nails filed, that kind of a thing. They’re done. Forget about them.
The ‘B Malls’ are a mixed bag. Some of them will be fantastic mixed-used developments. They need to be repurposed. You can’t keep them the way they are. That’s for sure. You saw Google putting office space in there. I think you will see a lot of residential, apartment buildings along with streetscapes in those kinds of malls.
The ‘A Malls’ are still viable and they will be. They’re putting in great restaurants, theaters, entertainment, and successful concepts which attract young people, millennials, who have not really been going to the mall.
Glossier is both a beauty company and a tech company that is succeeding by staying incredibly connected to their customers. Glossier founder and CEO Emily Weiss says that they are building a people-powered ecosystem where they are co-creating with their customers.
Not only do they ask for feedback from their customers, but they communicate with them on a Slack channel directly. This level of communication with consumers makes Glossier unique and is what powers their product creation and innovation.
Glossier is a pretty unique kind of beauty company that’s also a tech company. So it’s hard for me sometimes to answer that question, are you beauty or are you tech? I think we’re both. Right now at a glance were about 200 full-time employees across three offices in New York, Canada, and London. We’re about 70 percent female. Our board is 60 percent female. Our engineering team is 50 percent female. It looks a little different than most tech companies. We just crossed last year well over a $100 million in revenue. We’re very excited about that.
The way we look at it is that we’re building this people-powered ecosystem. Since we launched four and a half years ago, we have co-created with our consumers. The reason we’re able to do that is because we know who they are. We have a direct relationship with every single person who buys something from us, unlike you all of the incumbent companies that have been built through retail channels. We’ve never existed through retail channels. We have no plans to exist through retail channels.
Using Technology to Do Things Differently
The reason being we think that through using technology we can do three things very differently than what all beauty companies have done in the past. One is channel. The second is discovery. The third is listening at scale. Fundamentally, we just think about how do to give people amazing experiences.
In that way perhaps we’re similar to Amazon in that they’re extremely devoted to the customer. We’re very devoted to the customer from the standpoint that we don’t want to put things that aren’t amazing into the world.
Since we launched we’ve always relied a lot on user-generated content and feedback. We really started out of a blog that began in 2010 that was all around this premise that people are going to drive purchasing decisions in the future. Not algorithms. Not upselling or cross-selling. If anything, upselling and cross-selling people’s opinions, helping to evangelize people’s voice such that people can decide what they want.
At Glossier, we’ve really taken user feedback and asked them for things like what products to make, and where to go in terms of pop-ups or countries. We have fundamentally been able to really change the relationship between brands and customers.
Make Incredible Things That Stand the Test of Time
Traditionally, the way that I grew up with beauty products and brands was always sort of from brands speaking top down to customers. They are saying you’re not good enough, saying you don’t know what you want, let us tell you what you want. Really dictatorial. In a way, not giving people enough credit to be able to say, hey, actually I use this deodorant every day. So I am an expert at this deodorant. Seriously, we are all experts on the things that we consume and the things that we use.
What we’re trying to do is provide the tools, whether it is the physical products that we’ve created over the last four years or the digital conduits that we’re creating now. In the future we hope to help people use their voice and say, hey, how can I help someone else talk about what they’ve learned about beauty and their products and hopefully inspire others.
We’ve just typically had a pretty simple premise which is making incredible things that can really stand the test of time. That has equaled so far building these very modern essential products that we hope become icons in the same way an iPhone or an Air Jordan became essential products. Hopefully in thirty years time Boy Brow will connect a fifteen year old in the Middle East to a billionaire in Silicon Valley and we’ll be cross generational and cross socio-economic.
We get very excited about creating quality things that make people want to talk about them. Just period full stop. Over 70 percent of our growth so far has been through owned, earned, peer-to-peer, or organic because people just fundamentally want to share that they enjoyed their Boy Brow.
For Us It Has Been Quite Analog
This is something that people are really curious about. I think especially in this age of machine learning for us so far a lot of it has been quite like analog. It’s just been posting on the platforms that we have or in our Slack channel, where we have a lot like several hundred top customers, and saying what’s your dream face wash?
Sometimes, that’s the way in which we will make product decisions. But typically, it’s really an art and a science. It really depends on the project and how involved we’re going to get versus just sort of say in the office what are we excited about?
Our Innovation Comes From Staying Connected
We stay very connected. Every every team at the company, we’re about a third TAC across engineering, digital product, data, and design. Then we have an in-house creative team and we have in-house R&D. I think we’re all very connected to the to the customer. We have all of our Net Promoter Score feedback and comments from every single customer who answers it.
We are constantly taking into a Slack channel that everyone from me to my assistant to an intern can read every day just to stay connected to the customer. Sometimes it’s a single comment or sometimes it’s a macro trend that we that we hear about the translates into innovation.
Kroger and all retailers are fast becoming tech companies and thus have the difficult task of competing with companies like Facebook for top tech talent. According to Kroger CEO Rodney McMullen, one of their secrets to recruiting software engineers is the promise of more responsibility quicker than anywhere else.
In terms of the number of employees, I think you will have the same number but the skillsets will be a lot different. If you look at digital, for example, we have 500 people in our digital team. Within 2-3 years we will have a thousand. With software engineers, it is a completely different type of talent. Yes, we compete with (Facebook). It’s kind of fascinating.
It’s important for people to eat. It’s important for people to eat things they like. If you come to Kroger you are able to help people get exactly what they want when they want it. You get immediate feedback on something that is incredibly important. If the customer likes it you see it immediately. If they don’t like it you see it immediately. So you get great feedback.
More Responsibility Quicker Than Anywhere Else
I always tell people when we are recruiting them, I guarantee you that you will have more responsibility quicker than anywhere else. We have 25-year-old and 30-year-old people running $100 million and $200 million businesses.
On a couple of tests that we have going on right now, we have two interns that actually did the software work to get it in place. When their internship finished they went back to college and kept working with us to finish the project they worked on. It’s one of those things that you get a tremendous amount of responsibility incredibly fast.
The Future of Retail
I think the store will be multi-purpose. I think about one of our bigger stores. It wouldn’t surprise me if you had a small warehouse in the back of that store. You will use the same footprint, but half of it may be a physical store that is an experience space, half of it will be more warehouse efficiency space.
Making the decision in 1998 to sell the main divisions of Au Bon Pain and focus all resources on the company’s lowly Panera brand became the most stressful year and a half ever for Panera founder and former CEO Ron Shaich.
The lesson is to stand up against the pressure when you know your decision is right. Ultimately, Shaich says, even though there was “blood on the floor” initially, the stock is up a hundredfold.
Ron Shaich, founder and former CEO of Panera Bread, tells the inside story of Panera’s amazing success in an Inc. profile:
The Moment of Truth and Self-Reflection
Along the way, I had many moments of truth and many moments of self-reflection. But one of the most powerful moments was the moment when I made the decision to ultimately sell all of our original businesses. It was 1998 and I was in the Caribbean. It was Christmas time and I was kind of bummed.
We had four divisions in a large public company. I was looking at those four divisions and I understood that one of those divisions, the Panera division, had the potential to be a nationally dominant company. But it was the third largest of our divisions and it was really buried. This gem was buried under our three other divisions, Au Bon Pain, Au Bon Pain International, and Au Bon Pain manufacturing.
There I was on the beach in the Caribbean and I thought about it for a second. If I had any guts, if I had any strength, I would monetize every other asset in the company so we could take the financial resources and put it against growing Panera the way it needed to be growing. I would take our limited human resources, most importantly myself, and make that Panera business grow into what it was meant to be, and what it had the destiny to be.
Frankly, There Was Blood on the Floor
What that led to is over the next year and a half, the worst year and a half of my life. I had a Board that was disagreeing with me. My Board said we invested in Au Bon Pain, why are you selling the old Au Bon Pain divisions to bet on Panera? There was a real challenge whether I would lose my job.
One of our Board members looked at me and said, Ron, I think you’re crazy. I think you’re washed up. I think probably the problem is you and not what you perceive it to be. I had team members all of whom saw their careers affected. Frankly, there was blood on the floor in our corporate headquarters. Everybody was trying to figure out how it would affect them.
You Must Have the Fortitude to Go Through With It
That year and a half was the most stressful year and a half I’ve ever experienced. It was a stress in every sense of what stress meant. It was with me while I was sleeping. It was with me while I was driving. If I were honest with you, I would tell you there wasn’t a day I didn’t go in and say to myself is this really the right thing?
The truth of the matter is nothing is proven until it’s done. But you need to have the fortitude to go through it. You need to have the strength to make those bold leadership decisions. You need to have the wisdom to be right about 80 percent of the time on those decisions.
Ultimately, the Stock is Up a Hundredfold
The result, in the end, was all good. Everybody who was on the Board ultimately saw this as a very positive thing. I didn’t lose my job. We completed the transactions. Ultimately, the stock is up in the range of a hundredfold since that time. The people that were sold with these Au Bon Pain divisions, many of them ultimately came back to Panera when their non-competes were over.
I will tell you that in retrospect this may look brilliant. But when you’re going through it it’s so powerfully difficult and it’s so powerfully rooted in uncertainty. So much of it is about making the decision to go forward and to stick with it and to bring your organization along with it despite the uncertainty you may feel within you.
After 30,000 real-world driverless Lyft test rides in Las Vegas consumers have rated it an amazing 4.95 out of 5, says Lyft’s Chief Strategy Officer Raj Kapoor. He says that in the last 12 months the system’s gotten smarter and the ride has gotten smoother. “It has measured reactions and acts like a really good driver versus maybe an inexperienced driver,” says Kappor. “That’s a big change.”
Raj Kapoor, Chief Strategy Officer at Lyft, was interviewed by PCMag at the Consumer Electronics Show in Las Vegas:
Consumers Rate Selfdriving Lyft Rides 4.95 Out of 5
What’s changed changed in the last 12 months with our selfdriving tests is first of all the system’s gotten smarter. The smartness comes out in terms of planning and prediction. You can now tell how smooth the selfdriving ride is. If it’s seeing pedestrians or lots of cars it doesn’t make knee-jerk reactions. It has measured reactions and acts like a really good driver versus maybe an inexperienced driver. That’s a big change.
Two is that we broadened the area that we’re operating significantly. We’re operating a geofence that covers almost all the major hotels in Las Vegas and you can go anywhere in that area versus very specific points.
It’s one of those rare instances where a cool demo from CES right away becomes a live service. We have now 30,000 rides that we’ve had in the system and so far the feedback has been awesome. Consumers have rated it a 4.95 out of 5 stars and 9 out of 10 people that go on a ride would come back and do it again.
We’re really quite pleased with it. I think people have a lot of questions around self-driving, there’s some fear, but once they get in and do the ride they are really excited about it and ready to do it again.
It’s using the same scale as normal Lyft rides and in their mind it’s that same perception of how comfortable, clean, did the person or the robot drive well, all those things go into account. The automated Lyft is rating pretty high but the human drivers definitely get up there too. But 4.95 out of 5 is very respectable.
Lyft Using Las Vegas Data to Perfect the Selfdriving Ride
We can notice a lot of things with this real selfdriving test. Las Vegas is a great proving ground because there are so many people from around the world that come here. You’re not just having residents that are here. You’re having people that are using it for their vacation, using it for going back and forth, so we’re able to collect lots of data from a big diverse group of people.
We’re able to see what the repeat use is like. What do they like about it? What do they dislike about it? How much do they like to walk to the vehicle versus not? There are all these little nuances that go in.
Another example is around remote assistance. We noticed that the people love to have a conversation with the safety driver. They’re so excited at that moment. The question we have is as we move toward a future without a safety driver is how do we still get that interaction with the consumer? Can we have a remote assistant do that? We’re learning all these little things by being in the real life out there with people.
In fact, there are two people in the front. There’s a safety driver and also a safety engineer that’s in the front. So usually it’s the safety engineer that’s answering the questions. The safety driver is very focused on the road.
What doing now is developing remote assistance systems where you can talk to a lift operator and ask the questions that you need to ask via a very conversational interface with the consumer. There’s a lot going on there and there’s a lot going through their head around building trust. What is this car seeing? Is it acting the way that I would act? Then asking questions about how does that technology work? How can it do this?
More Human Drivers Will be Needed, Not Less
Going to the question around drivers. We still believe that there will be a need for more human drivers than there are even today. If you look at it these ride-sharing services in the US make up about 0.5 percent of vehicle miles traveled. Even if we go to 5 percent and the majority of rides become self-driving, if you do the math on that growth of the overall number of rides, you need even more drivers than you have today.
Also, this technology is great but it’s going to be slowly rolled out. It’s going to take a while for it to be able to do all conditions, all places, all the time.
We haven’t even begun to imagine around the new economy that comes out of self driving vehicles. There’s so much infrastructure that needs to be built around parking and charging and even mundane things like cleaning cars. Then there are serve there are groups of people that need to have assistance, whether it’s elderly people, people requiring physical assistance, or young children. We think there are going to be opportunities abound.
Obstacles to Overcome with Driverless Cars
There are a number of obstacles to overcome with driverless cars. Can I trust that this vehicle is going to operate safely, not just for me but for all the environment and community around us?
Two, is the technology itself. I think we’re on a good path and we’re improving but it’s going to take some time to get there. The other piece of it is that the cost of the vehicles are significantly expensive right now. They’re using expensive computers, expensive sensors, and they’re not made necessarily to last for a long time because they’re in a lot of R&D stage.
So the reliability and the costs have to get better. Then on the government side, the regulations that need to allow for this to flourish. We’re seeing good progress there. If we continue to have a federal level on safety standards then that’s something that’s really positive because it’s not going to be that you have to create a specific car for specific jurisdiction. We think those are the barriers but they all seem very doable.
Surprised at How Quickly Micromobility Has Taken Off
We classify all this (scooters and bike) as micromobility. What we found is that there’s really an unmet need for that zero to two-mile range short distance trips. Yes you could take a Lyft or you could potentially walk but you’re in that zone, especially if it’s a half a mile or more. It is a really convenient thing to do. It’s also a really fun thing to do whether you’re biking or scooting and especially if it’s electric propulsion.
I’m also surprised at how quickly that has penetrated but I think we’re living in a world now where there’s mass adoption, there social networks, and the innovation that’s coming that came in software so fast we’re seeing in hardware. New versions of scooters are about every month. There’s some loss rate and breakage rate that is acceptable given the high usage and it works for the consumer because it’s still a very reasonable price to get around town.
Lyft Helping Society Shift Away From Owning a Car
For people not to own a car, it’s really going to be a stitching together of a number of different modalities. Whether it’s bike, scooters, walking, or ride-sharing together, to provide a really good alternative to owning a car, which is expensive, a hassle, has parking, congestion, and emissions. It’s a really big problem that all these things together are going to be solving.
We want to get them from point A to point B in the most convenient way that they could get there and without owning a car. That’s the key criteria.
I think there will clearly be a big group of the population, especially that lives in cities, that really will not be able to justify owning a car. All the use cases that you’re thinking about you could utilize by short-term rentals, car sharing, ride-sharing, micromobility, or also public transit.
We’ve integrated into public transit and it’s the best way to get around in a lot of instances and we’re feeding into that. There’s a lot of inertia still about buying a car and some people are still wrapping up a car in their self-worth and their identity. That’s changing, especially with young people.
Lime monitors data from their scooters and bikes in real-time in order to ensure that all bikes are charged and available to riders. In fact, in 2018 Lime monitored 26 million scooter and bike trips worldwide according to their year-end report. The average ride was just over one mile totaling 28 million miles for the year.
Not only does Lime monitor data from their scooters they also remotely slow them down depending on where they are in a city, all in real-time.
Xiuming Chen, Engineering Manager of Infrastructure at Lime, discussed how Lime uses AWS and Amazon Kinesis to ingest all of this real-time data:
Lime Sends Commands to Scooters in Real-Time
Lime is a company about urban transportation and we provide a green and affordable transportation option for the users. Our scooter is connected to our servers to ensure a higher quality of service. We need to send commands to scooters in almost real-time. Maintaining hundreds of thousands of concurrent connections is a huge engineering challenge and that number is only growing.
Lime Slows Scooters Down Depending on Geolocation
We collect all kinds of information between these vehicles. For example, GPS, location, velocity battery level, and motor information. Safety is a top priority for Lime. As an example, we have a feature that requires us to slow down vehicles when they enter certain areas of the city. To achieve that we have had to increase the frequency of data collection drastically. We have a team of data scientists and machine learning engineers. The team analyzes this data to help us understand how people use our service.
On-Demand “Juicers” Use App to Collect Scooters
Normally we see spikes from 11 a.m. to 4 p.m., depending on where you are, but sometimes we also notice a very interesting spike at 9:00 p.m. So we have a network of on-demand workers that charge our scooters. We call them Juicers. Every night at 9:00 p.m. we start to allow Juicers to collect scooters. All of them open the app at the same time which causes the traffic to flatten our servers and causes a traffic spike. In the past, the traffic came directly into a relational database and our service become slower and unusable.
Amazon Kinesis Ingests Real-Times Scooter Data
We started to use Amazon Kinesis to ingest real-time data coming from our vehicles. The speed of the growth of this industry is incredible. Scalability is one critical issue we have to deal with and we can let Kinesis do the heavy lifting behind the scene. We can spend the time to work on some more important features that users really need.
“Bitcoin today is around $60 billion so I think it has the opportunity to replace gold as the dominant store of value in which case it can go up a hundredfold from where it is today,” says Lou Kerner, a founding partner of Crypto Oracle Strategic. “This is just a better store of value and if the world comes around to sharing that view and I think we’re on that path, then we are easily over 100,000 in three or four years I think in Bitcoin.”
What it’s evolved into today is a stored value. Today, the main stored value is gold, it’s a $9 trillion thing. Bitcoin today is around $60 billion so I think it has the opportunity to replace gold as the dominant store of value in which case it can go up a hundredfold from where it is today. Even if it becomes a strong second it can go a long way. It’s just a better way to store your value.
I think we just got ahead of ourselves. That’s what happened. I have a word that I use to describe the tendency of markets to become bubbles and the word I use to describe that is capitalism. There’s something called Amara’s law which is the impact of all technological changes overestimated in the short run and underestimated in the long run.
Bitcoin is the Yahoo of Its Day
Bitcoin and the broader kind of crypto category, which is this whole new computing platform of blockchain, cryptocurrency, smart contracts and such, that the disruption from that is going to greater than the disruption we saw from the internet. Bitcoin is kind of the early leader, kind of like the Yahoo of its day. While it’s a massive thing it’s not the thing.
If this is a thing and we really believe that in 20 years it will have created trillions of dollars in value similar to how the internet has, then we are at the very beginning today and it’s going to be here (way up) in 20 years. That’s my forecast. The great thing about making 20-year forecasts is that nobody knows you are going to be wrong for a long time. If it’s going to be here in 20 years the only thing we know for sure is that the path to getting there is going to be like this:
If Bitcoin Becomes a Store of Value It Will Go Sky High
If you focus on where you are going to be in 20 years then all of this (up and down) is just noise. If this becomes a store of value, and we think it is well on the path… Gold has had a 5,000-year run. It’s a great run. What else has lasted 5,000 years? This is just a better store of value and if the world comes around to sharing that view and I think we’re on that path, then we are easily over 100,000 in three or four years I think in Bitcoin.
If you take a look at the history of currencies over time 100 percent of them up until 400 years ago went to zero. The truth is if you think about the dollar, it’s a Ponzi scheme. It’s fine, this is how governments work. Nobody thinks we are ever going to pay back the debt that we have. We are never going to pay back $20 trillion in debt. By the way, there’s going to be more tomorrow and more the day after.
Bitcoin Has Taken Over Second Place From Silver
The only way to maintain your purchasing power and the only thing that has held up has been gold. That’s how you store your value. Over time all currencies degrade and eventually they all go to zero. Today, $8 trillion is stored in gold, in value that people are saying I don’t want to hold the dollar. It’s part of a diversified portfolio generally. Silver is the second biggest store of value at about $50 billion and Bitcoin today is $60 billion. So it’s really kind of take over second place from silver as a store of value.
Bitcoin Struggles to Evolve But it Doesn’t Need To
Bitcoin started off to be a digital currency. It can still potentially become one but the problem as really the first iteration of a decentralized entity that achieved scale there’s not a functional governance. So Bitcoin really struggles to evolve. It doesn’t need to evolve to be a store of value, but it does need to evolve to be a digital currency. We think that there will be digital currencies.
We think that governments are going to issue their own digital currencies. But they will obviously be pegged to their regular currency and they will degrade over time. We think that pure digital non-government digital securities where you know how many dollars or whatever it is are going to be (is better). The problem is nobody knows how many dollars there are going to be tomorrow other than you know there are going to be more.
If Bitcoin Becomes a Store of Value Then it Will Be Over 100,000 in a Few Years
The best Fortnite player in the world, ‘Ninja’ Tyler Blevins, says he currently makes more than $500,000 a month and may just become the world’s first $10 million a year gamer. Ninja has over 20 million subscribers to his YouTube channel and a reported 200,000+ paying subscribers watching Blevins livestream on Twitch.
‘Ninja’ Tyler Blevins, coming off appearances on Ellen and Jimmy Fallon, discussed his Fortnite success and wealth in an interview on CNN Business:
Blevins Makes More than $500,000 a Month
Losing tens of thousands of dollars sitting for this interview is a perfect assumption. With Fortnite alone I’ve streamed 3,400 hours this past year. That’s 142 days of gaming and streaming. On a good month I make more than $500,000 a month.
When I started making more than $80,000 a year streaming and gaming was the deciding factor in leaving college and quitting my job at Noodles & Company. That was the deciding factor by my Mom. By no means was she going to let me quit my job or drop out of school.
I say “drop out of school,” I don’t even like that because I always had every intention of going back. I actually did go back when I had an eye issue thing and my stream took a dive. After hitting $80,000 a year I said Mom, I’m doing this until I make less and then I will go back.
Could be the First $10 Million a Year Gamer
I definitely could be the first $10 million a year gamer. It’s rare that I meet people that don’t know what I’m doing. But if I had a dollar every time I was at an airport and someone asks what I’m doing. I say I’m going to a tournament. I answer it’s a video game tournament. They are amazed I make money playing video games. The gaming tournament explanation is simple. A bunch of people buy a team pass. That money goes into the prize pool winner take all.
70 Percent of Revenue Comes from Twitch and YouTube
Streaming is the hardest part for people to understand. How do you make money streaming? The answer is ad revenue. There are going to be ads in commercial breaks. Those advertising companies pay the network and it’s the same way with streaming. However many people see the ads, you get money there. Also, people can subscribe.
I make most of my money from Twitch and YouTube. It’s constant, it’s consistent, it’s monthly. About 70 percent of my money comes from Twitch and YouTube together. And then like brand deals with Red Bull and others make up the rest. It’s really simple, it’s like subscribing to a magazine, Spotify, or anything like that. It’s the same thing.
My favorite reference is a guy on the street playing the violin. He’s not expected to get any money, maybe a couple of bucks. If you enjoy it a lot sometimes people will throw in twenty’s and five’s. It’s the same thing with me, but I absolutely have a big violin case.
Former CKE Restaurants CEO Andy Puzder says that brands that adjust to the new economy are going to be more successful. He says that Walmart and Target adjusted to the new economy and that’s why they are doing great. Similarly, the fast food chains that don’t adjust will not do as well as those that have like Chick-fil-A, In-N-Out Burger, and Shake Shack.
Andy Puzder, Former CKE Restaurants CEO, discussed the how brands need to adjust to the new economy on Fox Business:
Fast Food Industry Needs to Adjust to the New Economy
I think there is a lot of competition now from grocery stores. Grocery store sales are up and people are eating at home. So that’s something that people that are running restaurants need to keep in mind. Secondly, people need to adjust to the new economy. It’s much like in retail. Sears is failing but Walmart is doing great. Kmart’s failing but Target’s doing great. That’s because Walmart and Target adjusted to the new economy.
It used to be if you ran a fast food restaurant you had an advantage with the drive-thru because a soccer mom coming home from a soccer game could pick up some food and drive home and it was very convenient. Now, maybe it’s not as convenient. You could call Uber Eats and you can choose from 40 different restaurants and it’s delivered to your door. You don’t even have to sign for it. Uber uses your credit card just like when you go with an Uber driver.
Brands That Adjust Are Going to be More Successful
The convenience element is changing. Brands that pick up on that are going to be more successful than brands that don’t. You see brands like Chick-fil-A doing very well, In-N-Out Burger, Shake Shack, these kinds of niche brands that aren’t these larger brands that have been associated with the traditional service. Millennials react differently to that. The world is changing and restaurants need to react just like other industries.
Markets Are Overreacting – Economy is Booming
Transportation and construction are particularly relevant because if the economy is growing that’s where you are going to see the jobs. You will see it in people building and you will see it in people delivering goods. We are seeing continued economic growth. I would also point out that consumer spending was the best since 2006 this last holiday season and consumer spending drives two-thirds of our GDP growth. The economy is doing very very well.
I don’t know why the markets are so overreacting to the negative news that comes out. The economy is booming, people are doing very well. Wages are up, more people are working, we have 7 million job openings, and people are taking home more of what they earn because of the tax cuts. There is really nothing on the horizon that would indicate that we are heading into a recession or even much of a slowdown.
A Good Economy is Not Good News to Certain Party
I think we are going to see continued accelerated growth this year despite what you are hearing in the news media. A lot of it is political. A lot of it is because there’s a Party out there for whom a good economy is not good news. That Party happens to control a lot of the news media so they’re having an impact. I think we are really having a dynamic economy and it can and will continue. The American people should be patient.
The founding trainer of fitness startup Rumble Boxing says that we don’t consider ourselves cool but people are telling us we are cool. Of course, it doesn’t hurt that Sylvester Stallone and Justin Bieber are early investors. Rumble, which launched in January 2017, is growing fast by making group fitness an experience where people are encouraged to take pictures and share Instagram Moments with their friends.
The Rumble business model is very unique and creative, taking the fitness experience to a new level and making it so cool that it has become a viral sensation everywhere it launches.
Andy Stern, Rumble Boxing Director of Talent, recently discussed the Rumble experience with legendary business guru Jon Taffer on Fox Business:
We’ve Made Group Fitness Fun
We’ve made it fun. In the group fitness world you have spin, you have a lot of running, we wanted to bring boxing to the masses and we wanted to have fun doing it. We’ve got 60 individuals in a room, loud music, projectors on the wall so it’s easy to follow. We wanted to take away the guesswork. We do five runs on the bag, five runs on the floor with dumbbells and strength, and it’s a blast. It’s so much fun.
Rumble Launching in Trendy Locations First
We are doing very well. We launched our first one in January 2017, so we are coming up on two years. We launched the second one in NoHo, the third one in West Hollywood, Los Angeles, and then came back to New York for a five story Upper East Side and then we just launched in the Financial District in San Francisco. During the hardest week of the year we had 600 paid customers day one.
Rumble Customers Improve Physically and Mentally
The biggest surprise to me is the people themself. It is not just a boxing world, it’s not just a professional athlete world. People want to feel good, they want to learn a skill. It’s also a little bit of a therapy session. As much as it is exciting for me to train athletes and celebrities I love seeing the average customer come back day in and day out and honestly not just improve them physically but mentally.
Sylvester Stallone and Justin Bieber – Early Investors
We’ve got some great names as investors. Sylvester Stallone and Justin Bieber are the first two that really fell in love with the concept. They’ve helped us really take this business to the next level. Equinox is our largest investor as well. They helped us with early growth and it is really just getting started for us which is really exciting.
Rumble Boxing Bringing the “Cool” Factor to Fitness
It’s an experience. People want to go out and do things, especially clients bringing in clients. They don’t want to go out to dinner and spend $400 on steaks and drinks. Instead they bring them to Rumble. They work out together, they get a great sweat, have a great time, and listen to great music.
They take pictures and share them on social media. It’s really just this fun experience. Young millennials are spending good money, $32 to $36 a 45 minute class. We are giving them a good workout but we’re also giving them a fun experience and that’s really the big part of it all.
They want to come and take pictures with our Instagram Moments, they want to tell their friends, they want to buy the swag. It’s become a thing. We don’t consider Rumble Boxing cool, but the people are telling us we are cool. We are loving every moment of it. We love the people coming and taking photos, sharing them, and working out with us.
Apple CEO Tim Cook released a letter yesterday saying that Apple is lowering their guidance for the fiscal 2019 first quarter, which ended on December 29. He attributes almost 100 percent of the revenue shortfall to their business in China:
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China. In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline occurred in Greater China across iPhone, Mac, and iPad.”
Cook attributes their China problem to issues such as China’s overall economic slowdown partially due to trade tensions with the United States. Many analysts believe that the biggest reason for slower sales in China is actually Apple’s high price point for their newest phones and this is only exacerbated by China’s weakening economy.
Apple Services Growth is Apple’s Future
One silver lining in Tim Cook’s letter is his announcements about the growth of Apple Services worldwide. Cook says that Services generated over $10.8 billion in revenue during the quarter, growing to a new quarterly record in every geographic segment. He says that Apple is on track to achieve their goal of doubling the size of this business from 2016 to 2020.
Apple CEO Tim Cook discussed the incredible growth of their services business as part of an interview on CNBC:
Services Has Grown an Incredible Amount
Services has grown an incredible amount. We’re going to report over $10.8 billion when we report later this month for last quarter. That’s a new record. This is incredibly exciting for us because so many things hit records in there.
The App Store did. Apple music hit a new record. Apple pay hit a new record. Our search ad product from the app store hit a new record. iCloud hit a new record. It’s very wide. Each of the geographies hit a quarterly record.
Services Business Driven by Huge Installed User Base
Even in China, the App Store hit a quarterly record. Why is that? It’s because have and our installed base grew nicely year over year in China as well. As I say in the letter we’ve picked up a 100 million more active devices over the last twelve months alone. This is an incredible number.
We’ve also got some interesting things in the pipeline on services and of course, we do on products as well. That’s sort of another way to grow the company.
Pandora is considered the world’s most powerful music discovery platform, using its proprietory algorithm to determine which music to play to a subscriber at any given time. The question is how do they do it so successfully?
Pandora’s Data Science Manager says that it’s not about AI and machine learning replacing humans. He says it’s about those two working together.
Using Data to Teach Computers How to Listen to Music
Music is an art form and behind it are certain objective properties, what instruments went into making it, the overall sound style, and artistic expressions of intent. It’s not just about objectively understanding music itself. We’re using that data to teach computers how to listen to music.
There are about 450 traits that we’re looking at for every song. Is it a breathy voice like Bjork or perhaps a smooth vocal like Shaday? Is there a swing or a shuffle feel to the beat or is there a lot of syncopation? There’s always this talk about AI and machine learning replacing humans when in reality it’s a loop. I think really a lot of the future is those two working together.
Challenge is Determining When to Introduce a New Song
The machine can tell you pretty well that someone’s singing in a piece of music. A machine might have a little harder time telling you what language that person is singing. The type of music we listen to and how we behave when we listen to it can really tell us a lot about ourselves. What do you do the first time you’ve ever heard a song? Are you open to it do you follow the mainstream or do you have very niche interest? Underlying all of those core behaviors are some really fundamental personality traits.
The challenge with music discovery is when is the right moment to hear a new song. That’s where you have to start learning about people. If you’re working and very concentrated you want to be listening to something familiar and hearing something you’ve never heard before is oftentimes a bit jarring.
Biggest Misconception About Music Streaming and Data
The biggest misconception about music streaming and data is that everything behind it is an algorithm. When we fundamentally think about how the algorithms work we have to think back to how we used to discover music before we had streaming services. We would listen to the radio or we would learn from our friends.
What’s at the heart of a lot of these algorithms is actually connecting you to all of the other people out there that you’re never ever going to meet. The trick then becomes how do you combine all of those sources of recommendations with your past listening behavior and with your current circumstance to pick the best song for you right now?
These days, brands that want to be competitive in their niche will first have to accept two indisputable truths—most people prefer videos over every other type of content and consumers are spending more time on their mobile devices than ever before. In fact, one study showed that 69 percent of internet users watch digital media on their smartphones.
Brands should take advantage of this trend by making the most of digital media. One effective way of doing this would be through applications like IGTV. Instagram’s latest feature perfectly combines consumers love of watching videos with the strong appeal of social media.
IGTV is short for Instagram TV. Instagram users can now make their own channel where they can upload vertical videos. Unlike the short video clips of Stories, IGTV videos can run for up to an hour. This gives companies a new and novel way of marketing their product and developing their brand. Videos can be viewed on Instagram, but IGTV also has its own app that can be downloaded on laptops and other mobile devices.
Why Use IGTV
There are several key reasons why your brand should be using IGTV. For one, IGTV is designed specifically for use on mobile devices—in a vertical format and full screen. It’s also very intuitive. Videos play as soon as the app is opened, so you don’t have to browse or search long for what you want. The selected clips are based on the user’s interest. However, your followers are automatically linked to your video content. This means that you’ll already have a built-in audience that you can grow.
Utilizing IGTV can also mean great things for your business. Aside from pioneering a rising format, vertical videos via IGTV will also help you connect to your target market. It will also be easier for your brands to be discovered by potential clients. IGTV’s format is optimized for mobile devices, making it convenient for Instagram users.
More importantly, IGTV is developed around Instagram. This means you will have instant access to more than 1 billions active users on the social media network. The company is also considering implementing ads on this new platform, which makes now a good time to hop on the bandwagon.
5 Ways to IGTV to Boost Your Business
1. Give New Life to Previous Content
IGTV gives businesses the chance to utilize the content they already have. You can reuse the most popular videos that you have posted on Facebook and YouTube. Another way would be to live-stream previous recordings. You can also convert listicles, tips, and how-to blog posts into IGTV videos. This approach can help you reach a new audience while followers will be given a fresh look at an old topic.
2. Offer Exclusive Content
Use your IGTV channel to share exclusive content with your followers. Providing them with special content on a regular basis will help you to build a dedicated audience. You can share a behind-the-scenes look at product development and distribution, upload interviews with experts, or stream company events like expos, speaking engagements, and social gatherings.
3. Engage Directly With Customers
One of the best ways to engage customers is to talk to them directly while providing the information they need. When you show clients that your company is open and ready for answering questions and hearing concerns, you’ll build trust. You can do this by hosting a Q&A session. Use the questions sticker in Instagram stories to gather common customer questions and answer them in a video.
4. Share Your Expertise
Tutorials have become very popular on most social media platforms. With IGTV allowing users to post longer videos, your tutorials can be more detailed. Post videos that teach users new skills or explain processes. For instance, an eCommerce store that sells cameras can teach users how to set up lighting equipment and offer tips for optimizing photo quality.
5. Turn the Spotlight on Loyal Customers
Consumers are likely to believe their fellow customers even more than a well-executed ad. Take advantage of this by featuring some of your loyal customers on IGTV. They can tell viewers in their own words why they prefer your brand. You can even take it a step further by showing how they use your product or services.
IGTV is an effective method of sharing high-quality content with your present clients and target demographic. If your brand already has an Instagram account then you’re guaranteed IGTV followers immediately. This will ease the pressure of building an audience and leaves you free to develop better content that will boost your business.
There’s a big business to be built even just on the medical side of legal marijuana says legendary technology investor Geoff Lewis. Lewis was an early investor in Tilray which recently had a hugely successful IPO of which he was pleasantly surprised.
Lewis thinks the worldwide trend is toward recreational legalization of marijuana and that bodes well for Tilray. “I think quite honestly the US is behind other countries on that score,” says Lewis. “So TBD here, but around the world, the trend is very much toward recreational legalization.”
Geoff Lewis, the founder of Bedrock Capital and an early tech investor in many companies including Tilray, the global leader in legal marijuana, Lewis recently discussed the recent Tilray IPO and the future of legal pot around the world on CNBC:
I Didn’t Think the Tilray Founders Actually Used the Product
One of the reasons I invested in Tilray, via Privateer Holdings, the creators of Tilray back in 2014, was that I didn’t think the founders actually used the product. I spent a lot of time trying to diligence whether I thought the team was actually using it and they weren’t.
The reason I cared is not that I have anything societally against it, but it was illegal at the time. The company was based at the time in Washington State where it was not legal.
At this point, I do think the trend has really dramatically shifted from back when we invested in Tilray in 2014 and it’s now obviously a publicly traded company. It’s a big win and we’re really lucky to have been able to back those founders early on. But there were only a few countries in the world where there was a medically legal framework and now there are over 30 countries.
There’s Big Business to be Built on Just the Medical Side
We didn’t know the IPO was going to be as successful as it was, that was a pleasant surprise. I would say that we did believe that regulation ultimately follows what society wants. We felt back in 2014 when we made the investment that most people in most countries believe it should at least be medically legal and the regulations were very expected.
There’s big business to be built just on the medical side. I do strongly believe the trend is toward recreational legalization. This is certainly true in many of the Western European countries and South America. I think quite honestly the US is behind other countries on that score. So TBD here, but around the world, the trend is very much toward recreational legalization.
