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Showing posts from November, 2013

Sometimes your gut feel is right, sometimes it is not: how to choose

Malcolm Gladwell says he was prompted to write Blink because he grew his hair long and found as a result that he was being stopped by the police more. “It used to be cut very short and conservatively. But I decided on a whim to let it grow wild as it had been when I was a teenager. Immediately in very small but significant ways my life changed. I started getting speeding tickets. I started getting pulled out of airport security lines. And one day as I was walking in downtown Manhattan a police van pulled up on the sidewalk and three officers jumped out. They were looking for a rapist and the rapist, they said, looked a lot like me. “They pulled out the sketch and the description. I looked at it and pointed out to them that the rapist looked nothing at all like me. He was much taller and much heavier and about 15 years younger. All we had in common was a large head of curly hair. After 20 minutes or so the officers finally agreed with me and let me go.” A master story te

Free is taking over the world: The Curve explains what you can do about it

The Curve by Nicholas Lovell is a book that will help you to think about your business differently and particularly about how to think about your customers and how to make money from them. For example, at one point he discusses the difference between “free” and “cheap” by quoting a famous experiment where psychologist Dan Ariely set up a table to offer customers two kinds of chocolate, a high quality Lindt truffle or an “ordinary” Hershey Kiss. “A large sign above the table read, ‘One chocolate per customer’. Customers could only see the chocolates and their prices once they stepped up to the table. “Ariely started the experiment by setting the price of Lindt at 15 cents [the cost price was 30 cents] and Kisses at 1 cent. [The customers] acted with a great deal of rationality: they compared the price and quality of the Kiss with the price and quality of the truffle, and about 73% of them chose the truffle. “The purpose of the experiment was to see what impact free had on

Amazon is changing retail: you need to understand how it works

I don’t fear Amazon, it’s One Stop, a senior wholesale executive told me recently. But a flick through The Everything Store: Jeff Bezos and the Age ofAmazon by Brad Stone might make him rethink. I am sure that Jeff Bezos will write a better book about his business ideas 20 years from now and while Stone’s book has been slated by some insiders, it is a great read. For anyone involved in distribution it is a must read. Famously frugal with company funds, the Amazon attitude to burning up money buying companies that failed during the dot-com boom of the late 1990s will dazzle you. Even more impressive is Bezos pursuit of the best brains from Walmart. He started his career in a New York hedge fund run by David E Shaw, whose mastery of maths and computing made him a billion dollars exploiting inefficiencies in the way Wall Street worked. DESCO had a policy of hiring the best brains and Bezos was a prodigy. He left this well paid job to set up an internet business that had a 70