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Archive for February, 2007

I was feeling a bit “lagged” this morning and made my usual pass by the local Starbucks. I’m standing in line yearning the smell of freshly ground coffee, but the barista odor de jour is of burning egg/cheese as the line barely moves. Finally I ordered my mundane Sumatra grande coffee with a little room (no fancy Carmel macchiato-non-fat-extra-whip for me) and I was on my way. I put the coffee cup in the Toyota cup holder and drove a half mile down the road. On the free way ramp waiting for the stop-n-go congestion light to turn green I reached for the coffee, as I normally would. As I lifted the cup it happened again…the ever annoying large single drip of coffee on my shirt.

It’s a conspiracy. I believe Starbuck’s personnel are trained to use the vertical cup “line” as a navigational aid for lid alignment. As if they are blind-folded in the training basement they use the ridge in cover of darkness and coordinate where to align the lid with the sipping hole. And this area will not SEAL. So, I’m paying nearly $2 for a cup of java and I get the added bonus of having to dry clean my shirt. Do they know Mr. Kim at my dry cleaner?!

With more than 4 million customers a week, what are the odds that your coffee cup lid will leak? If only a .5% – that’s a lot of cleaning fees. Sure these cups/lids keep beverages at their correct serving temperature, and keep your hands comfortable on the outside, but with a significant portion of Starbucks’ beverage business as take-out, and the majority of those drinks being sold in disposable cups….can’t the barista gals put the lid on the cup in a way so it won’t drip?!

And now I’m reading in the Wall Street Journal about how Mr. Schulz wants to have 3X the growth and still maintain that “small store” experience and focus on coffee. What?

Dude, drop the Mr. and get a first name. It’s not your 1990’s Starbucks. First there is the aroma loss. Prices are up. Service like a fast-food chain. Job boards annunciating careers at every entrance intermixed with CDs and Cinema discounts. Dumbed down cookie cutter espresso machines that dilute and automate the barista experience reducing it all to a near clinical robot visit. Egg muffin ovens that waft burnt cheese and 6-pack scone containers making you ask just who are they imitating? McDonalds or Safeway? iTunes or the local Cinema-plex? They are about as far away from coffee as you can get in terms of brand extension.

My suggestion on your “theater of romance” is either train your staff different and/or find a lid that doesn’t spill coffee on my shirt?! And oh yeah, while I’m at it, how about making coffee with out grounds in my cup. At least 10% of the time I’m choking on them. And no I didn’t pay extra for them!

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Supersize Me Using Cell Phones!

Japan’s dominant mobile operator, NTT DoCoMo, a champion of mobile payments, recently inked a deal with McDonald’s to enable its subscribers to buy food at the restaurant by using their mobile phone. The ¥300 million joint venture company is largely (70 percent) funded by McDonald’s, which will install terminals in their stores that interact with near-field communications (NFC) embedded in DoCoMo handsets. The food order will then show up on the customer’s next mobile phone bill.

Of course there will be all the marketing buzz of discount coupons, email offers and mobile-phone games, wallpapers and ringtones direct to your cell phone.

And to think that I’m having containment issues with text messaging on my teenager’s cell phone. What a battle this would be every month at bill time…

Mobile phone payments are a trend which the US market has been slow to adopt. Maybe because US carriers have not determined new ways to monetize, or a way to introduce this type service to enable users? For now I’m happy avoiding the kid battle!

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Sat-Rad Mergers

I’ve subscribed to XM Satellite Radio since April 2006. Previously, I was a subscriber of Sirius Satellite Radio for about two years. I remember the hype leading up to the Howard Stern launch. I’m a fan of the Satellite radio, and like XM better.

Now comes the proposed merger with rival Sirius Satellite Radio.

February 19, 2007

To: SIRIUS Subscribers

Today is a very exciting day for SIRIUS customers. As you may have heard, SIRIUS Satellite Radio and XM Satellite Radio are merging to form the nation’s premier audio entertainment provider.

This combination of our two offerings will benefit you – our loyal listeners. As a single company, we’ll provide superior programming to you every day with the best of both SIRIUS and XM. Currently, XM and SIRIUS broadcast a wide range of commercial-free music channels, exclusive sports coverage, news, talk, and entertainment programming. Howard Stern. Oprah and Friends. The NFL. MLB. NBA. ESPN. CNBC. Fox News. Additionally, the combined company will be able to improve existing services such as real-time traffic information and rear-seat video as well as introduce new ones.

After shareholder and regulatory approvals, we anticipate that the combination will be finalized by the end of 2007. Until then, both companies will continue to operate independently. We will continue to provide you with the uninterrupted service – as well as the outstanding customer support – that you have come to expect and enjoy from SIRIUS. We do not anticipate any changes in your service during the merger process, however, please call our customer care team on 1- 888-539-7474 should you have any questions.

We look forward to the many benefits this combination will offer and continuing to make your listening experience an enjoyable one – offering more of the Very Best Radio on Radio.

Stay tuned,

Mel Karmazin, CEO

The business reasons as to why these two companies might want to merge are: Cost savings, efficiencies of scale, debt repayment, more muscle with music companies, sharing the cost of rolling out new technologies, etc., but I don’t see why its good for me?

Personally, I care about music (with out advertisements), catching CNN on the commute and an occasional sporting event. That’s why I subscribe to XM.

Being a previous subscriber of Sirius it has a lot that I don’t want: Howard Stern, Martha Stewart, and Tony Hawk’s Bucka-Bucka-Hucka-Jam-Bamma Xtreme Show. I’m certainly not interested in subscriber fee increases to get Stern!

I’m concerned that, as an XM subscriber, I’ll lose channels that I like and get channels I don’t. The satellite spectrum is limited and they won’t suddenly put up 300 channels.

I think that until the proposed merger can promise something more (new gadgets, more functionality), rather than something less (discontinued channels), we subscribers should be very, very skeptical.

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Bismarck, ND: Current temperature is -5 degrees. You can view updates at the KFYR web cam HERE.

And if that wasn’t chilly enough news…there is the video of Al Franken announcing his intent to run for the Senate seat on YouTube or on his site.

He made this announcement today, his last show, on the Air America radio program. Don’t get me wrong, I like Franken’s work as one of the original writers on Saturday Night Live (1975-1980 and 1985-1995). I even caught some of the banter on Air America via XM Radio for a laugh.

Courtesy of David Shankbone

But, Al really helped the Air America network to bankruptcy. The network had financial trouble within days of its launch back in March 2004, when it turned out that its original chairman, Evan Cohen, did not have the backing. A few weeks later, Mr. Kelly, a former owner of Midwest radio and television stations, stepped in to take charge of the board. At the end of 2004, he ceded the chairmanship to a new investor, Rob Glaser, chief executive of RealNetworks.

In typical Glaser (ex-Microsoft exec, turned millionaire) bravado he put in place a team that was so top-heavy with management, was challenged at selling ads, unwilling to make program changes that steered away from any liberal message and overstaffed with more than 100 employees when a few dozen would have been enough. They burned through $45 million in funding…much faster than an internet startup.

All the while there was finger pointing and accusations of a nefarious plot with intentional steps taken to put the company into Chapter 11. Glaser resigned from the board along with Mr. Kelly at the time of the Chapter 11 filing. He is the network’s largest creditor with $9.8 million in claims.

Not the smartest financial decision for Glaser, a graduate of Yale University with a BA and an MA degree in Economics!

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I’m a fan of things that challenge or refresh my perspectives, but the email Michael Dell sent to all employees was just lame. It’s as if he’s saying that employees are an old trend in business where by people are required to perform tasks with a company, sometimes up to and even including THINKING!

DELL INC.

Michael Dell e-mail to employees
Friday, February 02, 2007

From: Corporate Communications

Sent: Fri 2/2/2007 14:57

Subject: Leadership Message from our Chairman and CEO

To: Dell Team Members Worldwide

From: Michael

We held a meeting this morning with our Vice Presidents and Directors. I’d like to share the highlights of this meeting with all of you.

I told our team that I remember the great times and many successes with Kevin Rollins, but now it’s time for a change. We are not doing a COO or CEO search. I plan to be CEO for the next several years.

I remember what it’s like to start a company. We’re moving fast. There is no luxury of time. The competitors are fierce. The difference is this time we have many new assets and some hidden ones that can be brought out.

We have great people . . . but we also have a new enemy: bureaucracy, which costs us money and slows us down. We created it, we subjected our people to it and we have to fix it!

The #1 Tell Dell issue is bureaucracy and getting cooperation from other organizations.

I am asking each of you to look across your organizations and eliminate redundancies, think about what is best for Dell, and provide the clarity and focus of leadership that we need.

Last year, we worked really hard and there were many sacrifices. Thanks!

We had great efforts, but not great results. This is disappointing and it is unacceptable.

The result is that there will be no bonus this year. I know this is a big deal for you and your teams. We’re going to fix that so that our efforts translate into great results and success for our teams.

But we still have great people who made great efforts. It’s important to recognize your hard work, though our results fell short. Limited discretionary awards will be available to all but the most senior people. We can’t cover everyone, but it will be a tool you can use.

And we are also budgeting for above-market raises this year.

For stock awards, we will shorten the vesting period from five to three years for future grants and move to restricted stock units.

And we’re going to set the annual bonus plan against realistic targets.

We have a tough couple of quarters ahead. We didn’t get here overnight and we won’t fix things overnight either.

OPEX (operating expense) grew too fast. We need to grow into what we have, hold cost and eliminate marginal activities. If you have some, please stop them now and if you’re not sure, bring them forward. We must focus and wring out savings.

Long-term, we will be the technology leader known for strong operating performance, a great experience for our customers and a great place to work!

We will have clear priorities and a focused strategy.

We will grow Small and Medium Business (both with business and public customers) and expand Services.

We will continue to build the enterprise Server/Storage business. In Services, we will build, partner and buy.

Product Group will shorten design cycles, increase speed and innovation/design that create real differentiated value for our customers. We will transition to a light touch ODM (original design manufacturer) model.

We’re going to introduce new brands and products with a focus on Consumer and Small Business. We will ensure quality, stability and predictability for our larger customers.

We will complete our dual processor supplier strategy.

We’ll restore loyalty and continue CE improvement focusing on the activities with the best ROI. We will bring excitement and pride back to our brand.

In emerging markets, we’ll take new approaches and introduce new products.

In Consumer, I believe the dramatic de-scaling is a mistake. We will focus on return on invested capital (ROIC), cash flow and variable costs. We will have a new product cycle, we’ll fix CE and we will not run away from a cost fight!

When I started in 1984, it was just me. But now we are blessed to have an awesome team, many great assets and $11 billion or so. It won’t be easy, we’ll have to make some tough decisions and we won’t be shy about those. Our focus will be on building Dell into the company we all know it can be for our customers, our people and our shareholders.

To summarize, we will differentiate with CE (customer experience); deliver value, but go beyond this with our unique understanding of customers; move to Solutions and Services; use database marketing and targeting for smaller customers; leverage our unique supply chain; regain our cost position; and build some new sources of sustainable profit including using intellectual property to differentiate.

It’s all part of Dell 2.0.

We will unify our leadership structure, from well more than 20 direct reports to 12. I’ll be decisive, but also push many decisions to our leaders. We will speed decision-making and make decisions closer to our customers and have clear responsibility and accountability.

I have asked Paul Bell to return to Austin and lead the new Americas organization, which will include Small and Medium Business, Public, Commercial and Americas International. We expect to name the replacement for Paul to lead EMEA from a choice of internal candidates in the next few weeks.

Asia Pacific/Japan will continue to be led by Steve Felice.

We are creating a new organization called Global Operations, which has responsibility for all manufacturing and procurement worldwide. We’re conducting a search for this position and hope to complete it soon.

Global Services will be led by Steve Schuckenbrock.

There will be a Consumer group which will also include online, S&P and Brand. We’re conducting a search for this position and we also believe we have a great internal candidate.

Our three Product Groups will remain largely unchanged. The Consumer Product group will be led by Alex Gruzen; the Business Client Group by Jeff Clarke; and the Enterprise, Server & Storage Group by Brad Anderson.

I have asked Don Carty to take on several responsibilities in addition to Finance, including IT, HR, CE and Support and IR and Communications.

Our Legal group will be led by Larry Tu and our Strategy team will be led by Tim Mattox.

We will be bold in our thinking and swift in our action.

I ask you to commit with me to the future of Dell. Show confidence with your teams and our customers. We will fix this business and take it to new heights!

All the Best,

Michael

I would argue that you should not ask employees to be passionate about their company… help them be passionate about their work instead. That will create a more passionate, motivated workforce than asking people to get excited about a corporate entity or name on the door.

What gets me excited is having fun on a job that I enjoy, working with a good team, getting support from management, and being able to see how my work has an impact. I’d rather work at a company where I have passion about my job, than one where I care about the company name but dislike the work I do.

I’m still mulling this around, but it seems to me that the TELL DELL campaign should be about customers telling Dell what’s wrong with their support! I’ve posted on this before here.

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Steve Jobs provided a good read on his view and thoughts of the music industry yesterday and basically asks for DRM free music, something the entire world has been asking for. Jobs can be a catalyst, but towards what? What should the music industry do?

He makes excellent points in his post:

Today’s most popular iPod holds 1000 songs, and research tells us that the average iPod is nearly full. This means that only 22 out of 1000 songs, or under 3% of the music on the average iPod, is purchased from the iTunes store and protected with a DRM. The remaining 97% of the music is unprotected and playable on any player that can play the open formats. It’s hard to believe that just 3% of the music on the average iPod is enough to lock users into buying only iPods in the future. And since 97% of the music on the average iPod was not purchased from the iTunes store, iPod users are clearly not locked into the iTunes store to acquire their music.

Unfortunately, Jobs asking the music industry for DRM free music is nothing but a pipe dream. It would take cooperation of an ego driven industry (remember the SonyBMG root malware crisis?) and they don’t care about understanding the user interdependencies. They care only about optimizing revenue across the entire scope of options.

We’re kidding ourselves thinking it’s an industry driven by art.

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Running…

Confession: I actually kind of totally hate running.

Several years ago I “dealt” with that, immersed myself in the hoo-hah and ran consistently (3-5 times a week) for about 4 years. Finally, after an unpleasant ‘clicking’ sound coming from my right knee during the Shamrock Run, I thought its time to call it quits and no matter how much Irish beer I drank that day the pain remained.

My problems with running are numerous. First, there’s no TV and chips! But, even when consciously thinking about it, I have a difficult time with pace. I find that without constant attention, I’m running s-l-o-w or I’ll run too fast at any given moment. That means, I’m always gasping for breath or near it all the time. Second, I think I may be a defective runner as I wander… all over the path rather than in a direct and straight line. The fact that my arms are wailing around like I’m rowing a boat doesn’t help. Second, part 2, even though the medical doctors aggravated me during my knee problems about youth and age and during rehab about age and youth blah, blah, blah it motivated me to try the bike, but you know what? That small seat hurts my butt! What are they thinking? I have none of this discomfort while watching TV!

But perhaps the biggest hurdle is that I never like admitting exactly how out of shape I really am when getting back into trying to run again. I have a friend of a friend…yes, that would be Tina that I compare myself to, who can get up after not running for a year weeks and run a 10K or buy new shoes, fly into a sunny location and just like that finish the marathon. What’s up with that?! So, my recourse is to just force myself to run full-steam until I’m miserable and deadly exhausted.

But, a terrific thing has come into my life that have made running not only possible, not only something I feel I need to do, but, shock and awe, semi-enjoyable. I actually have thoughts like “I want to leave work early and go for a run now.” Maybe it’s just the leaving work early part or:

My iPod+Nike adapter kit, hoo-hah. Knowing that I’m running a 6:40 mile down hill when totally out of shape makes me slow down because I know I can’t maintain it on flat ground. The consistent feedback from this little Apple thingy lets me know when I’m getting out of line. Plus, as a bonus I can listen to music. And oh yeah, you have charts and graphs and other motivational things online…sort of the give a mouse a cookie syndrome…

So there you have it. It’s already February, and looking back at the past month I feel okay with my schedule, but its time to ratchet it up.

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