Kicking The Tires

18 April 2012 | talking about Stock Market

Wall Street analyst types are often “going undercover” to see how a business is doing. They might go to Home Depot and wonder around the store and buy a few items to see how the entire process is going. They might stand outside Macy’s and count the number of people going in and our of the store. All this to get an estimate as to how the business is doing. Over the last few years I have been making efforts to do my own little channel checks. I might not be camped out Macy’s counting people but I like to visit companies I am invested in, thinking about investing in, or competitors to companies I want to invest in. Below I am going to share two stories of my two most recent channel checks.

I love Starbucks. It has been a core holding of mine for a while now. I think they are one of the best runned companies (since Howard Schultz came back). I make every effort to visit Starbucks wherever I go to make sure they are truly consistent (it could be they are just really really well run in the Portland area). In the past 6 months I have visited a handful of Starbucks in South Carolina, Northern California, and of course different locations within my home state of Oregon. Each visit was a warming and consistent experience. It is clear Starbucks is working hard to make sure they have a brand people trust and rely on.

On a recent trip to Northern California I made an effort to visit Peet’s Coffee’s. I visited 3 different locations Cupertino, Davis, and Sacramento. Each visit was not pleasant at all. Getting on the Internet was a guessing game to begin with. Eventually I found out you have to get the barista to give you an access code good for one hour. Once connected, the service was completely unusable (in all 3 locations). In general the employees were not friendly and straight up rude in Sacramento. I found the bathrooms to be pretty gross in all 3 locations. I do not love the coffee but it is ok. It seemed a little burned at the Davis location. Nothing about the Peet’s brand really gave me any confidence. Many of the patrons I spoke with also had negative thoughts about the service and the poor wireless.

 
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Bootstrap Companies Make Better Products

12 April 2012 | talking about Internet, Products

I am always looking for product inspiration. I have a little rule that whenever I discover a new web product, regardless of the product, I create an account and take a look around. On average this turns out to be about 1 new product a day. I tend to take a binary approach to products when I review them. They are either good or bad. You can always find issues but often it is very clear if the team behind the product is the real deal or not. If a product is good I often make a note of it and come back and spend more time with the product to see what I can learn from it in terms of new product development ideas.

I on a hunch I reviewed my list of products and compared my binary rating of good or bad vs if they raised early stage funding or not. Also, I reviewed only products that charge a fee to use them. No advertising based products. It turns out with this screen 5 of every 6 companies I reviewed as good were bootstrapped or took money after already having tons of revenue. If it is not yet clear, what I am saying is that there seems to be a relationship between great product design and being bootstrapped.

 
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