This is a wake-up call to the small business owners who are fortunate enough to read this. The vast majority of you, are not good at marketing. It finally took a bad interaction with a small business, to spill over what I've been thinking for years now and land on this post.
When I was in 4th grade I received an assignment from my school teacher. The assignment simply was that if I had a million dollars, what would I do with it? While the majority of my classmates were buying toys, pizza, spaceships, etc. I opened a restaurant with my Dad. Fast forward 21 years and at the age of 30, I helped my Dad open a restaurant (we didn't quite need a million after all). I now help with the marketing and accounting.
So now I'm tasked with bringing customers in the door. Luckily we have good food AND good service. I'm also not just saying that because I'm biased, we legit have good food. Since I started marketing last year, I've been able to stumble through building a bigger following on our respective social media platforms than our competitors. It's not something to gloat about because it's not huge but our competitors are simply not doing it at all. Even the ones who are, are not doing it well. We had more followers on Facebook in 3 weeks than the previous owner of our location had in 10 years. Our followers on Instagram aren't something to be proud of either but out of the 9 direct competitors to our restaurant, only 2 of us have Instagram accounts. I know this because I did a full analysis on our competitors in terms of their business and their marketing. Most of them don't have social media handles, they don't pay for their yelp, their websites are outdated, Facebook pages have posts from 2014, you see the trend. Some of these places do have multiple locations that are pretty successful. Why are they successful you ask? Well, they have large capital with large store fronts and parking lots that are located on busy plazas/street corners. As Gary Vaynerchuk once said, "sure it's cool to have revenue of 20% but why not 50% or 60%, why are you leaving money on the table?" The problem I have to overcome is a tiny storefront. Customers who have directions to come see us can't even find us, let alone someone driving by is never going to see us. Our parking is in the back of our restaurant and we are so hidden that we needed to put up signs on the back of the building.
How long are the bigger businesses going to be around now that people know us little guys exist because they log onto Yelp to find a place to eat? I can't even wrap my head around how you have the audacity to not even say thank you when someone leaves you a positive review? Do you realize what this person just did for you? They told an infinite amount of people that they should come buy from your place of business! This is the ultimate word of mouth! That review stays on your page forever! They don't have to keep telling friends, co-workers, family, etc. about you. I can sympathize with some of you in terms of not knowing how to work social media platforms, or reply on yelp, google, etc. Fine, but you can't sit here and tell me someone in your place of business doesn't know how to do that, or a family member, a friend, or even find someone to pay that can do it for you? Thank your customers for their reviews, it's the least you can do. Oh, but you don't have time to do this because you are too busy sitting at the chamber of commerce events.
Let me tell you about the chamber of commerce. Yes, it's great to network, and yes it's beneficial to some people in particular industries. Here is my experience. When we opened the restaurant the ladies from the chamber were coming in all the time to eat and trying to get us to sign up, so in good faith we did and I went to an event. In my mind, I would get to meet some other business owners in our city, help each other with our businesses, trade marketing information, discuss village issues, etc. Instead, I sat through people trying to sell their product or service to each other! To make matters worse I had to sit by a very self-centered chiropractor whom I'll call Bob. Bob decides to tell me how he doesn't do any marketing at all. All he does is attend networking events. Bob looks down on me for doing any marketing at all. Well, Bob, I've been to a chiropractor and he charged my insurance $300 bucks to crack my back in 10 minutes. So by my estimation, Bob's opportunity cost is $1,500 an hour. So while you sit here looking down on me for marketing, you could be at your office cracking backs and making $3,000. Instead, you are spending 2 hours at the chamber trying to get me to go see you, which is not happening because you have poor people skills. What I'll do instead is pay yelp $500 to reach over 4,000 people a month and drive in sales of $15,000 just from 1 marketing avenue. ROI anyone? Now that Yelp is working for me, instead of sitting at the chamber listening to Bob pitch me, I can actually network with bloggers and Instagrammers. These influencers can cumulatively reach hundreds of thousands of people for me instead of the 50 people in the chamber. Oh and by the way I found my chiropractor online because he markets and has good reviews.
Exactly how my experience at the chamber played out, is how small business forums or groups play out as well. The ridiculous terrible pitches and in fighting that I've seen were so awful that I left all groups. I was again naive to think we could actually share ideas but instead, there were a million marketing/SEO gurus everywhere preying on poor business owners. Even when a good idea was shared, people would jump on each other like sharks bashing one another. Do you understand how unprofessional it is to bash someone's idea and then plug yourself? If you are so good, why are you begging for business in Facebook groups or forums? Especially if you are a marketing and SEO guru. You out of everyone should not be begging for business. Your business is marketing!
Besides being a business owner, I'm also a consumer. That's right I buy stuff and eat food. So I know what I hate to look at and what I don't hate to look at. I hate the dumb commercials on videos that are longer than the actual video. I hate scrolling through my newsfeed and seeing a buy 1, get one free post every other post. As cute as your kids and dog are, I don't need to see terrible advertising 5 times a day. Show me more of your personal brand because that's why we are friends on Facebook and every once in awhile throw out a pitch but make it good. Stop advertising like everyone else. Before you post ask someone close to you who always tells you how it is what they think. You know that person, Aunt Lucy who has no filter. Ask Aunt Lucy what she thinks about the post you are about to put up. Heck ask yourself, "if I saw this, would I be compelled to buy or would I be annoyed?"
People are no longer going to come to the dying strip mall that was popular in the 90s. The new generation isn't all of a sudden going to pick up a newspaper. People aren't going to stop scrolling through Facebook during commercials. Stop living in the past. You are living through word of mouth but then what happens? People move, people get older, people pass away, and life happens. Then where do you get your customers from? My buddy who runs a furniture store was trying to implement a marketing strategy and the owner shut it down because the store was losing money so he wanted to save on cost. Well, sales plummeted 50% after that and he's scratching his head as to why. When you cut your marketing, especially when sales are down, you rip open the wound. Whereas you were bleeding out before, now you're dead. Red Crow Marketing estimates that we see 4k - 10k ads a day. Think about it, your competitors are out there in front of people and now you have all of a sudden vanished. How do we know you exist? You really think I noticed you as I drove by? You really think that just because you have a website, people will magically appear now? It's even worse when you cut sales staff. You are cutting the people who are bringing in money! Yes of course if sales are down, review your sales staff and your marketing. You might be spending money in the wrong areas but don't cut the budget. Cut some programs but add to others that are working. And if you made it this far, DO SOMETHING ABOUT YOUR ONLINE PRESENCE.
Most of us go through this. You know, you meet that person who you are infatuated with or in love with and can’t imagine being without them every single day. If you are fortunate enough to find this person, it’s tough to navigate through some of the important financial discussions that you need to have before you decide to move in together. It’s funny how it’s so common to “live together” but yet talking to each other about our finances is so taboo. I make my own money and you make your own money or so it seems. Well, I’m here to help you have that discussion because the infatuation or love can quickly fade due to not being on the same page when it comes to finances.
You Don’t Have Common Goals
There goes that word that we hear so often but don’t practice. “Goal.” Whether you sit down and write down your goals or you just have thought about them, they are still goals. When you say you want a house, kids, a dog, a new car, etc. those are all goals, you just haven’t written down how you will achieve them. Do you and your partner have the same goals? In today’s day in age, we can’t assume our other half wants the same things especially when you calculate how much these things end up costing. My fiancé and I had the perfect relationship before we got engaged. We almost never argued until we began wedding planning. It was almost as if the word “wedding” was a trigger word to start arguing. We had very different goals when it came to the wedding and a very different view of how it would get paid for. We got through it but it was tough for a while.
I suggest you both sit down and plan out common goals. Plan out 1, 3, 5, and 10-year goals. I know it’s hard to think about goals that far down the line but you never know what you may uncover. What if your partner wants to move out of state in 3 years? Are you going to be willing to move also? It’s important to have these discussions so that you avoid disaster and heart ache later on.
You Haven’t Disclosed Your Personal Financial Situation to Each Other
I know that it’s taboo to tell someone what you make or what you have but if you are going to be living together and or getting prepared to possibly get married, being up front and honest will be crucial to your success. There are too many stories of the secret credit cards that have been racked up to thousands of dollars and the spouse finds out. Of course, everyone’s situation is different but if you have had the common goals discussion from above, this next discussion should be easier to have. Being able to identify problems and then helping each other get through them together will place you in a better financial situation. Ultimately, you’ll both be happy because one of you no longer has to carry the burden. I’ll give you a personal example. My fiancé had a balance on a credit card. I found this out because we sat down to have a common goals discussion and then we were honest about our finances with each other. Since we had common goals and we were both working toward their achievement, all of our money was now in the same pot. If she continued to carry this burden it would hinder us as a team from achieving our goals. So we made a plan to pay off the balance because it was the debt with the largest interest rate that we had. The money being spent on paying off the debt and interest was delaying us from achieving our other goals. She had less to contribute to our common goals such as a kitchen remodel. In reality this debt was affecting both of us.
I know some of you are weary about this section but if you discussed your common goals and know where each of you wants to go, this is the next step. You can’t have this discussion without discussing your common goals. Having this discussion without common goals will be awkward and detrimental to your relationship. Make sure you are on the same page before you reveal anything.
You Don’t Have a Budget
It’s very rare where I will come across a couple or an individual who has sat down and written out a budget. We all know we have to pay x for rent or mortgage, x for utilities, x for a car payment, etc. What we don’t plan for is the small coffee purchases we make every day or the gym membership that we never use. All of these things add up. It’s so easy to just swipe the credit card without even knowing how much is being added up at the end of the month. Now imagine your personal financial situation and add another person to it. Are they just as bad as you or are they worse? There will be times when moving in together will benefit both of you financially but only if you sit down and make an actual budget. When one of you is accustom to spending while the other is accustom to saving, trust me you will have problems.
If you have had the common goals discussion and the financial disclosure discussion, then it’s appropriate to set a team budget. You can both still have your own bank accounts, you don’t need to open a joint account. As a matter of fact, I think it would be more difficult to try and manage a joint account than your own personal account. I always suggest having a joint savings for all of your household/common goal expenditures but keep your checking accounts separate. You’ll know how much each of you will have to contribute to the common account each month but you don’t have to manage each other’s income.
Which brings me to my last point. Now that you both have done everything in the above, discuss how items will be paid. I’ve seen over and over again where John will move in with Carol and because Carol owns her own place and has been successful at affording it, John barely contributes. It’s all fun and games until John has 0 expenses but yet has 0 in savings. It will get old to have someone just live off of you. Have a conversation about how things will get split. The breadwinner today may not be the breadwinner tomorrow.
When I was in 4th grade my school teacher assigned us a simple assignment. If you had $1 Million Dollars, what would you do with it? While the majority of my classmates were buying toys, pizza, spaceships, etc. I opened a restaurant with my Dad. I just remember thinking how much he enjoyed his job and I wanted him to own the place he worked.
I sat down with him and went over everything that we needed in order to open the business. We had to write down financials in terms of what everything was going to cost us. I used him as a resource because at this point he had already accumulated over 10 years of restaurant experience doing everything from busing tables, cleaning dishes, to learning how to make food. I also had to use him as a resource because, in 1994, we personally didn’t have a computer or access to the internet. I still remember to this day writing down an expense of $1,000 for a microwave and my teacher balking, telling me my numbers were off. Well, Mrs. I don’t remember your name, please see what commercial microwaves today go for here. I imagine they were a bit more expensive back then before they became a household necessity, especially commercial ones. Yes, I’m still bitter because she questioned my financials and she was wrong.
During this time my dad had just completed 1 full year as the head cook at “The Cherry Pit Cafe” in Deerfield, Illinois. He had previously worked in different roles as I mentioned above but now he was the main cook. What is special about this is that he legitimately came from nothing. He grew up in Mexico where he didn’t own his own pair of shoes. He shared a pair with my uncle, but they only wore them or rather switched off wearing them on special occasions. He was pulled out of school in 3rd grade in order to help with farming so that the family could eat. When I was young I remember spending my summers at the farm in Mexico where there was no running water. No running water meant that there were no toilets, no bathtubs, no washing machines, and no sinks. Water was fetched from a nearby river. Going to the bathroom meant going out in a field. Showering and washing clothes meant jumping in the river.
My mother grew up very much the same way. She was also pulled out of school in 6th grade to help put food on the table. Growing up we were never well off financially. I remember growing up in a 1 bedroom apartment in a bad part of town. To me seeing cockroaches and mice were normal. I suppose when you are a child you just don’t know any better. My parents struggled to move out of that place but move they did. Just when we all thought life was turning for the better for us, my mother got cancer. As a child, you don’t know what that means. You just know that mom isn’t home. You visit her at the hospital but don’t realize the gravity of the situation. You just know that you aren’t getting new clothes for school like your classmates or that Santa didn’t make it to your house that year.
My mother got better and my dad worked his tail off. He then forced me to start busing tables at the age of 12 at The Cherry Pit. I hated waking up early to do that but I wouldn’t change a thing. It taught me the value of hard work and the value of an education. He wanted me to suffer according to him so that I would put more effort in school. His dream was for me and my sister to graduate college.
I did end up graduating from college but it was in 2009. Yep, I graduated at one of the worst times in our history. I wasn’t sure what I wanted to do but I knew that I wanted to some day open a restaurant with my dad. Even though the year was 2009 we were never in any financial trouble. My dad worked his tail off at 2 jobs and I envied his work ethic. I never thought I would ever work as hard as him. I loved going out with friends, having free time, and most importantly I loved to sleep. Throughout my life when I get asked who my hero is, I always say it’s my dad. To come from where he came from to where he is now is incredible.
Once again things were looking good for us and then it happened. My mother got sick again. It wasn’t cancer this time but it was something she’s had to battle through for years now (for her privacy I won’t say what it is). I kept thinking to myself why is does this continue to happen to her? She’s an incredible human being, she doesn’t deserve this. This is where that work ethic that I envied so much kicked in. I made it a point to not only work my tail off but also return to school to get an MBA. Santa isn’t going to miss our house ever again.
Fast forward to 2016 and at the age of 30, I helped my Dad open a restaurant (we didn’t quite need a million after all). Not only did I help him open a restaurant but we opened THE restaurant and co-founded it with 2 employees that had been there since 1994 as well. We opened the Cherry Pit Cafe in the same location where he’s loved to work at since we did that project. This time around I made sure to save my money because I made it a real goal to help him open a restaurant. Plenty of opportunities arose and I would push him towards them but he never wanted any other restaurant but the Cherry Pit. Once again we sat at our kitchen table going through the financials of what it would take to open the restaurant. This time it wasn’t make believe, this time it was real. We just had to be patient for 21 years.
Our family is doing just fine now. My mother is healthy given the circumstances. My sister graduated at the top of her class and I couldn’t be more proud. My dad now runs the Cherry Pit with his two co-workers who have also been at the Cherry Pit since 1994. I help them out with the business side of things and still hustle my tail off. I sometimes wonder how successful we’d be right now, had we not had those set backs. In reality, we needed those set backs because it taught us some invaluable lessons. At the age of 30, I helped my dad achieve his dream of opening a restaurant. Now it’s my turn to achieve my dreams. Stay tuned.
In case you don't follow sports or spend don't too much time on Twitter, LaVar Ball is a father of 3 very highly skilled men's basketball players. The eldest Lonzo was just drafted number 2 in this years NBA draft by the Los Angeles Lakers, the middle child LiAngelo will be headed to UCLA next fall, and the youngest and arguably the most talented LaMelo will look to make another run at a California State High School championship. The 3 Ball boys went undefeated and won a California State title when they were all in high school together for Chino Hills High School. They all committed to attending UCLA upon graduation from High School. Their father LaVar Ball was instrumental in getting them prepared for the opportunities that are now arriving.
So why is LaVar Ball someone to pay attention to? Well, he's been in the mainstream media a lot since Lonzo went to UCLA. He has a very outspoken demeanor and some think that at times he says very outlandish things. For example, he once stated that he would beat Michael Jordan in a game of 1 on 1. If you are unfamiliar with Michael Jordan, then this article may not be for you. He also stated that his son was already better than current 2 time NBA MVP Stephen Curry. He's gone on various sports talk shows and brought his character on to promote his son and his Big Baller Brand. The way that LaVar has been promoting his brand and not just his BBB brand but his overall brand is the new age of marketing.
In today's world, brands have this misconception to think that us consumers want to consume their commercials online. We didn't even want to consume their commercials or advertising on TV, Radio, or print let alone on online. How annoyed do you get when you click on a video on a social media platform and the advertisement is longer than the clip? It makes me not want to buy from that brand even more so. If you waste my time with your online advertisement and especially if you make it longer than the video I'm trying to see, the ad worked against you. I will now know NOT to do business with you. So what big brands seem to get wrong is that their advertising only works if it's entertaining to us or provides some sort of value. The "50% off sale" or the this "weekend only" is just noise in a world where everyone is doing and saying the same thing. For example in the Super Bowl, the most successful commercials are the ones that get people talking. The ones that stand out by providing value to the consumer. Gary Vaynerchuk points this out very thoroughly, in order to provide a "right hook" aka a sale or "this weekend only" ad, you have to establish a relationship with the consumer. You have to throw "jabs" aka valuable content in order to then later gain enough trust to sell your product.
Now that I've explained briefly what today's marketing environment is like, here is why LaVar Ball gets it. He absolutely gets under people's skin, but it gets people talking about him. He says very outlandish things that deep down I don't think he even believes himself but he's providing entertainment value. LaVar Ball is like a WWE wrestler. Part of the entertainment value of the WWE is all the talking and outlandish things that are being said. All the 1 liners and zingers. "Do you smell what the Rock is cooking?" Well, LaVar does because he's cooking content. He's providing so many jabs that you have to pay attention to him and his boys.
In the history of the NBA, no other draft pick has consistently sold out NBA Summer League games. That's right Lonzo Ball is selling out Summer League games. Granted he's very good. He's very entertaining as an athlete but he's no better than the top NBA players who are just if not more entertaining. Many of these NBA players can't sell out real games. I for one am a basketball fan. I'm not a super fan that watches dozens of games. I catch highlights and I tune in for the playoffs but I don't watch a full game until the finals or occasionally when the Warriors are playing because they are entertaining to watch (separate conversation). I've tuned in twice to see Lonzo play in the Summer League. I tuned in because of the hype that was created by LaVar Ball.
While LaVar Ball is taking interviews and providing content, in the background is his Big Baller Brand. He wants to do what no one else has done before and that becomes a brand within a brand from the start. Sure Michael Jordan has the Jumpman brand under Nike but that came many years later and how many of these brands do we see from athletes? It took the greatest basketball player of all time to get his own brand, MJ is an exception to the rule. LaVar is trying to break that rule and deservingly so. He doesn't want to see what Nike did to Steph Curry. Steph never got his own shoe with Nike. Nike wouldn't even sponsor a summer camp for Steph, which was very important to him. When it came time to renew Steph's contract, Nike didn't even use new content or new PowerPoint slides for him. Now he's providing billions of dollars for his current brand Under Armour.
When LaVar Ball did hold meetings with Nike, Adidas, and Under Armour, he had some very against the norm requests. He wanted his Big Baller Brand to be sublicensed to the bigger brand much like Jumpman. He wanted all his boys when the time came to be signed to said brand. Lastly, he asked for an insane amount of money for the rights. All three big brands balked and said no thanks. It was the first time since shoe deals became the norm that the number 2 draft pick of the NBA draft did not have a shoe deal, or was it? LaVar went on to provide Lonzo with his own shoe under the BBB brand. They then hiked up the price to a level not seen before. Why? To provide more marketing content. The price of the shoe, the demands to the big shoe brands, the outlandish statements are all part of LaVars marketing plan. Now that everyone is paying attention and views him as the bad guy, he does a heartfelt interview with GQ. Lonzo comes out and does a commercial for his shoes in a softer tone. LaVar takes a backseat to the Lakers organization in handling Lonzo. Lonzo does a Footlocker commercial poking fun at his dad (watch here), which was hilariously done and cheered on by social media.
Now LaVars newest magic is having Lonzo wear various brands of shoes in summer league where he is now dominating. Lonzo wore Kobe Bryant's Nikes, James Harden's Adidas, and last but not least Steph Curry's Under Armour's. The new message is that BBB allows it's athletes to wear any brand. The real message is, hey look at us big brands, we can work together side by side and come to an agreement. Lonzo will wear his shoe AND your shoe. Also, take a look at how much publicity we have generated. Look at how marketable we are. Marketability is the real value and LaVar is displaying that perfectly.
I won't be surprised if one of these big companies jumps in and takes the golden nugget that LaVar is dangling. How could you not? LaVar Ball has already generated more marketing power than all of the current athletes on each respective brand with the exception of LeBron and Steph. If Nike, Adidas, or Under Armour come back to the negotiating table, I find it hard to believe that LaVar will have the same demands. I believe that this is exactly where LaVar wanted to take them in order to create more leverage in negotiations. He started incredibly high with the intention of trying to get to the highest middle ground possible. If he had not done what he's done, his ceiling would have been very limited. He went out and proved himself and now it's time for him to reap the benefits.
I know that some will still question his character due to the antics. If you really read into his story and what he does for his family and his community you'll see that he's actually a great guy. How many fathers spend this much time working and hanging out with their children? How many of you give back to your community? I don't mean you donate clothes or money, I mean how many of you go out and lend a hand? LaVar works with the local kids on their basketball skills. When his boy's workout, he has other young kids come and work out with them. He also spends time individually teaching them various skills. When his wife had a stroke, he didn't exploit that like many others would have and turn it into a marketing opportunity. He stayed silent and took care of his family. I'm sure some of you had no idea that this recently happened.
I don't applaud LaVar's character that he plays, but I do applaud his genius. I can see past the marketing strategy and know that he's actually a good guy, trying to market his brand in today's marketing environment. He gets it while so many big brands don't. Take note before you get left behind.
Snapchat has been in the news a lot lately so I figured I would touch on it. When Facebook, Twitter, and Instagram all came out, I signed up. When MySpace, Snapchat, Vine, Pinterest, and Google+ came out, I didn't sign up. Granted Facebook, Twitter, and Instagram were all first to market (exception MySpace) so it's easy to say of course I signed up but let me dig deeper.
Correction, I signed up for MySpace, realized how hard it was to create a cool profile, and then I deleted it. I wasn't tech savvy enough or maybe had enough interest to really participate. When Pinterest came out, the quick word of mouth branded Pinterest as a women's social media platform, so I decided not to try it out. I still don't use Pinterest but I think it's a very lucrative platform that I will touch upon in another post. When Google+ came out it seemed like it was similar to Facebook and I already had Facebook. I didn't want to spend the time trying to build up my network all over again. When Vine came out, I wasn't really interested in creating videos nor did I care for all the random videos on Vine. My friend would show me his vine and I found it annoying personally.
I signed up for Twitter because all of the celebrities and athletes that I care for were using Twitter. It was cool to be able to reach out to them directly with 140 characters. I don't think Twitter is going anywhere but I'll touch on that in a different post. I signed up for Instagram because where it's sort of taboo to post too many photos on Facebook, Instagram is built on photos. I like seeing pictures and video as opposed to someone complaining about their miserable day. Lastly, of course, I signed up for Facebook because it was an awesome concept. An easy to use MySpace, where I could keep up with my friends and family, document major events in my life, and go back and relive those events. Sign me up.
Now, we saw what happened to Facebook's stock after its IPO back in 2012. The stock dropped nearly 50% in the first few months following the IPO. Many people seem to point back at this example so as to say that Snapchat's stock will bounce back just as Facebook's did. I'm here to tell you that Snapchat is not Facebook. Snapchat could have been purchased by Facebook and made into a profitable company had Snapchat CEO Evan Spiegel seen the writing on the wall. Now we all see what that writing is. Instagram stories. Facebook's CEO Mark Zuckerberg's offer to buy Snapchat was declined back in 2013. He created his own version of Snapchat, except that he did it within an already wildly popular social media platform: Instagram. Everything I'm saying right now is what we all already know so besides Instagram stories here is why Snapchat's bubble has burst.
How many of you use Snapchat? Ok, how many of you over the age of 40 use Snapchat? Ok, and how many of you over the age of 40 that use Snapchat are males? Do you see where I am going? Snapchat doesn't have the audience or the appeal that Facebook does. How many of our grandmothers or grandfathers are using Snapchat? I can ask the same question but insert Facebook and a significant amount uses Facebook. It's tough for Snapchat to scale because of their target market.
Let's take a look at these statistics from Omnicore (Source). 71% of Snapchat users are under the age of 34. 70% of Snapchat users are female. 45% of total Snapchat users are age 18-24. So if we take a look at the data how do you scale or what advertisers are you wooing over to your platform? Now add the fact that these same users are most likely using Instagram and now Instagram offers the same product within their own platform, wouldn't you just use that now? The other big take away is how many people who use social media are comfortable taking videos of themselves or others? How many of us take selfies or even video selfies? Snapchat has potential to grow with today's younger generation because they are more inclined to use Snapchats features. The only problem is that Snapchat doesn't have the luxury to wait for them to get to a position where advertising to them is profitable for companies. Instagram already caters to a much larger audience and now they've taken Snapchat's niche market as well. It's only a matter of time before Snapchat is gone, and I believe that time will be much sooner than we think.
How many times have we seen a company come out with a new product or service only to have someone else come in and do it better? Or better yet they weren't able to adapt quickly enough in order to continue as the market leader? Jawbone is just the latest in a long list of companies to meet it's fate and shutter it's doors. They join the likes of Blockbuster, Blackberry (still treading water), Groupon (drowning), K-Mart (drowning), Myspace, Compaq, Marshall Fields, Motorola (still treading water), to name a few. Many of these companies once dominated their respective markets and now they are barely an afterthought.
When Jawbone came out with their Bluetooth headsets I was working for Best Buy mobile. The product was so easy to sell because of its innovative technology, sleek design, and clever marketing. I almost never had anyone come back to return a Jawbone Bluetooth. They then entered the fitness industry by coming out with the Jawbone UP band. It was the first of its kind. Again they nailed it with its sleek design, clever marketing, and innovative technology. There wasn't a product out on the market that tracked steps, tracked sleep, and woke you up at the most optimal time in the morning. I loved my Jawbone UP band when it worked. Shortly after the release, there was a recall of sorts. The band's technology wasn't quite ready for the masses. In theory, it was so amazing that I would show it off to my friends and even wrote a paper on it (Jawbone Term Project Full).
In my paper, though I would praise the company that I came to love I also had a feeling that things were getting hairy. I thought the issues were so severe that I even got the guts to e-mail the director of marketing at the time my term paper. The marketing was beginning to lag amid the PR nightmare. If you googled Jawbone during the time when the bands weren't working properly all you would see was bad reviews, bad blog posts, and bad customer feedback. The move by the CEO to issue full refunds was a step in the right direction but it still didn't fix the problem. The technology and design needed to improve. They needed to continue to innovate and really cement themselves as the fitness tracker industry leaders. I also knew that if other fitness trackers such as Fitbit and Nike could duplicate their technology, it was only a matter of time when the smartphone makers could do the same. I knew all along that they needed to sell or strike a partnership. Sure fitness trackers will continue to be around but they won't be as prevalent. I know that soon all fitness shoes will probably come wired in some form to track your steps for you so that you don't have to wear anything. I know that Nike has an add on piece that does this already but it's not great and it doesn't come standard with their shoes yet. Fitbit needs to team up with Nike now before they too meet their fate.
I've been wanting to start a blog for some time but didn't know what my premise would be. I knew it would be business related but was unsure what content I would provide. This latest Jawbone liquidation was my inspiration in finally making a blog. I've been pretty good at seeing these things far in advance and figured I would share my previous correct guesses as well as future ones in a blog. I also shared my thoughts on a Facebook comment which drew enough interest for me to start it up. Thank you to those who wanted to see the term paper which led to this.
By: Octavio Vargas
We hear about internships all the time while we are in school. From the time we
get to high school until the time we graduate college we consistently hear
about the importance of completing an internship prior to graduation. We are
told that an internship is an important real world learning experience that can
bring many benefits along with it. We also hear about the stories of how some
interns needed to run out and get coffee for their bosses on a daily basis and
we also hear about how other interns secured a job at the company they interned
for. So why is it that so many students are consistently graduating without an
Trying to find an internship can be as difficult and tiring as trying to find
employment and just as competitive. Students need to comb through various
internship websites and job boards just for the opportunity to apply for an
internship. Even after students apply for a particular internship, they rarely
ever hear back from the employing company. The entire process of securing an
internship can be very frustrating and this is why most students either do not
attempt to obtain an internship or give up early in the search process. What
many students fail to realize is that obtaining an internship is much easier
than they ever thought. They do not need to go through a website or a job
board. They can simply create one out of thin air.
I was sitting at a bar with a friend of mine one day when my internship was
created out of thin air. We were discussing his current employment as a sales
representative for a local developer. He was discussing with me how the company
had lost their accountant due to the recession. At the time of this discussion
I was in graduate school working toward an MBA with a concentration in
Accounting. I had tried finding an internship prior to the beginning of the
next semester with no luck. As my friend spoke I thought to myself “how great
would it be for me and his company to have me come intern for them.” As I
thought this the light bulb went on in my head. I asked my friend if he could
ask the developer if I could intern for a semester without getting paid. He
thought it was a great idea. A week later I met with the developer for an
interview and my internship was created. She was extremely excited to bring me
on because she was getting an MBA student to fill in as her accountant at no
cost to her.
As I went through my internship I of course experienced the stereotypical
internship experiences. There were times where I had to run out and get
supplies, fill up the owners gas tank, create spreadsheets for her sons
wrestling club, organize blue prints in an empty office, etc. There were also
times where I learned invaluable information and this had to do with the 3
goals I established for myself prior to beginning the internship. The first
goal was to become an expert at using Quickbooks. The second goal was to learn
the areas of accounts payable, accounts receivable, bank reconciliations, and
payroll. The third and final goal was to gain knowledge and experience from two
successful entrepreneurs by studying their day to day operations.
I can honestly say that the experience I had at my internship went beyond the
goals I had established for myself. I learned how to use Quickbooks inside and
out. I learned how to use excel in ways I had not learned in school. I gained
valuable knowledge around the areas of payroll, accounts receivable, accounts
payable, and banking. As for my third and final goal I was able to learn so
much from these two successful entrepreneurs that I decided to start my own
consulting firm. The owner of the company wanted to keep me on staff but did
not need me full-time and could not afford to pay me full-time. So I decided I
would start a consulting firm in which then I could come in and assist in
various areas of business such as accounting, finance, and marketing. By the
end of the internship I was working with the sales team on their marketing
initiatives and we were able to work together to increase sales. I have since
also been able to acquire two more clients through word of mouth marketing.
The experience from the internship also allowed me brand myself on Linkedin as
someone with accounting experience which I did not have prior to the
internship. The internship experiences lead to a recruiter finding me on
Linkedin and scheduling an interview with me. The interview was for an Accounts
Payable position at a large insurance brokerage firm. Out of 70 candidates I
was 1 of 10 people who were hired for a position at this company and the only
one without any experience with the accounts payable software they used at
their company. My minimal experience at the internship was the main focus
during my interviews. Without the internship I would have never even received
an opportunity to interview for a position.
If you were thinking about searching for an internship or want to make a career
move I encourage you to seek an internship. The experience is invaluable. The
majority of businesses would love to have your expertise especially if you are
willing to work for free, which is another great skill that I learned from this
experience. When you can learn to do work without the benefit of being
compensated for it, you will never work again. Work will no longer seem like
work because you’ll enjoy what you are doing. Too many times we stay in
positions due to compensation and an unpaid internship will force you to think
of the benefits of the job versus the benefit of compensation.
By: Octavio Vargas
The economic crisis of 2008 brought the United States into the “great recession” that is still being felt today in 2012. I for one did not fully understand what caused the economic crisis nor did I understand what was happening. Furthermore, when I speak with other students or adults, the vast majority of them also still do not understand how the crisis began or how the crisis unfolded. I decided to read “Too Big to Fail: The inside Story of How Wall Street and Washington Fought to save the Financial System from Crisis--and Themselves” by Andrew Sorkin, to get a better perspective on the economic crisis of 2008.
In President Clinton’s last year in office his administration decided to de-regulate the housing market. What de-regulation of the housing market meant was that traditional banks were no longer the only institutions capable of providing home loans to consumers. Wall Street was able to bundle home loans together which were called mortgage backed securities or collateralized debt obligations. They would then sell slices of the bundles to investors, and began making a lot of money off of the fees charged to investors that in turn made Wall Street ask lenders for more loans.
Lenders normally would only lend money to sound borrowers; for example, a person with at least a 620 credit score and a 20% down payment on their home purchase. After Wall Street began demanding more loans, the lenders began lowering previous lending standards. Lenders would approve loans for people with poorer credit scores and without putting any money down.
The investment banks knew that these mortgage backed securities carried significant risk, so they bought insurance from AIG. The insurance was called a default-swap, meaning that if the consumer defaulted on their mortgage, AIG would pay off the balance. The result of the increased mortgages was a “housing bubble.” The housing bubble was popped when the teaser rates for the majority of consumers ended. A consumer was able to purchase a home at a rate of about 2% interest, but that rate only lasted a few years. The real rate of interest on a mortgage would increase after a couple of years to a rate that the consumer could no longer afford to pay. Consumers began defaulting on their mortgages by the thousands. After consumers began defaulting, AIG was left to pay all the defaulted loans which AIG could not afford to do. If the government had not intervened and “bailed out” AIG, institutions such as Goldman Sachs, Merrill Lynch, JPMorgan, Bank of America, and so on would have recorded massive losses all at the same time. People then would have lost confidence in the banking system and no bank in the world holds enough deposits to satisfy every consumer who decides to take their money out of the bank. Although every bank is FDIC insured, the FDIC does not have enough money to cover a single large bank let alone ten large banks. Also if AIG had failed, many people’s pensions, 401ks and retirement accounts would have been left empty.
The reason why Fannie May and Freddie Mack were controlled by the U.S. Government was because of the large sum of foreign investment and foreign loans that were made into these institutions. The failure of Fannie and Freddie would have significantly decreased the confidence of foreign markets in the United States thus leading to a collapse of the U.S. Economy.
The world economies, as well as the U.S. economy, are economies based on trust. Once the trust is gone, the system fails. What banks allow businesses and people to do is operate. When money is pulled back and credit freezes, then businesses can no longer operate. If banking institutions had not been “saved” there would have been a domino effect that would have destroyed not just the banking industry but all industries.
After reading about the housing collapse in 2008, I wanted to gain a greater knowledge on monetary policy. I went on to read “Inside the Fed: Monetary Policy and Its Management, Martin through Greenspan to Bernanke” by Stephen Axilrod. During the stock market collapse of 1929 monetary policy was not addressed directly. Mr. Axilrod points out that World War II was the cause of forced spending which stimulated the economy out of the depression and recession at that time. The Federal Reserve Act of 1913 was what established the central bank of the United States, and the central bank is one of the tools that the U.S. uses to try and stabilize the economy. In class we learned that we have three major goals in Macroeconomics: Steady growth, Stable prices, and Full employment. We must try to stay consistent on all three goals otherwise the economy begins to get out of control. When we have steady growth the economy is able to produce more jobs. When more people are employed they are able to purchase more items. If prices begin to inflate, the Federal Reserve Banking System can increase interest rates to reduce spending and inflation. If spending begins to stall then the Fed can cut interest rates. The Fed can also buy Treasury securities which increase the money supply in the economy and the Fed can also sell Treasury securities which decrease the money supply. The Fed also decides the level of reserves member banks must hold in their depository.
At times the Federal Reserve cannot stimulate the economy by itself. When interest rates get very low, they become ineffective and then tax cuts and an increase in government spending is needed in order to try to stimulate the economy. The problem arises when the Federal Reserve believes in one policy and Congress believes in another. Mr. Axilrod noted that when the Fed was trying to reduce inflation during the Reagan administration, Congress was proposing tax cuts which would lead to more spending and higher inflation. Axilrod goes on to note that people’s personal agendas can actually hurt the economy at times.