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Archive for June, 2008

The Gallon Milk Jug Gets A Green Redesign – So Why Are Consumers Complaining?

Monday, June 30th, 2008

Common business wisdom says these days that if you make a green product, consumers will come—and buy. What’s not so clear is how shoppers will react if they perceive that the eco-friendly product in question is mediocre.

Take for instance a new, green innovation in food packaging: a revamp of the gallon milk jug. With rising costs fuel costs and some foreign countries squirreling away their resources, developing a bottle that is not only more eco-friendly, but that is cheaper to make, store, and transport makes sense. These new gallon jugs have been reshaped to make them easier to stack on a pallet, allowing more milk to be transported at a time. The pallets are also bound together with cardboard and plastic, both of which can be recycled after the milk arrives at its final destination. And with lowered transportation costs, the cost of goods falls as well, making a gallon of milk cheaper for shoppers. So far Wal-Mart and Costco have adopted the jug in what’s a rare win-win for retailers and consumers.

Well, not exactly. Some consumers are crying foul because the new milk jugs aren’t nearly as precise with their pour because they don’t have a traditional spout. “I hate it,” one Sam’s Club shopper tells the New York Times, along with a myriad of others who are literally crying over spilled milk. Despite that, Wal-Mart says they intend to continue their roll out of the jugs, although they’re easing consumers into it by giving demonstrations on how to use the jug (“pour slowly”).

From a fiscal and eco-perspective, Wal-Mart and Sam’s Club have made a sound choice. But what about the angry customers? If you were in their position, do you go out on a [green] limb and embrace these new, cheaper packages or do you shy away from creating controversy and dissent among your consumer base?

Have A Question….?

Monday, June 30th, 2008

Then ask us! Each Thursday we answer reader questions. Well, at least those that relate to business planning, starting a company, or securing funding.

What I can’t do is answer questions that have no answer (“How do I become a successful businessman?”) or that are unrelated to anything we’ve ever discussed on this blog (“Can you send me insurance forms?”). I also will not provide you with a free copy of a business plan for that entrepreneurship class you’re taking—so please, stop asking.

Now that we’ve got that out of the way, I’m looking forward to hearing from you. Please use the Q&A box at the right to send in your questions!

Maybe Some Web 2.0 Investments Are Kind Of Nuts…

Monday, June 30th, 2008

We use and love Web 2.0 as much as the next person. But our post earlier today about why there haven’t been any IPOs recently (and whether it has anything to do with the types of start-ups VCs are funding) got us thinking—maybe Silicon Valley investors are way out there.

Take Slide, the widget-maker who generates apps for Facebook and MySpace. They secured $50 million in umpteenth-round VC funding in January, and are best known for “SuperPoke,” a popular feature that lets Facebook and MySpace users “throw” sheep at each other. Today they unveiled their newest widget, animated icons featuring VH1 Reality stars like Flavor Flav and Bret Michaels that Facebook and MySpace users can send to their online friends and post on their profiles.

Really? That’s what $50 million buys?

While some tech sites are way excited about it, does any one else find the project totally underwhelming for a company valued at 60-plus million? Call me old-fashioned, but personally I can see why Wall Street has a hard time getting excited about an animated Flavor Flav postcard (and isn’t that show so last year anyway?).

FlavorFlav

Faux mock-up of the new widget via Valleywag.

Should eBay Be Held Responsible For Fake Goods On Their Site?

Monday, June 30th, 2008

If you’ve ever bought (or sold) a fake on the online auction site eBay this week’s survey question is for you. Today a French court ruled that eBay will be have to pay luxury label Louis Vuitton $63.1 million in damages for fake LV goods that have been sold via their site. While eBay acts primarily as an intermediary between sellers and buyers (who sees part of the action), the court’s decision indicates that they expect the company to take a more proactive approach to weeding out counterfeiters.

But what do you think? Should eBay be held financially accountable for fakes sold on the site? They obviously make money off the auctions they host, but does that make them complicit? And are they responsible for taking down the slew of current auctions shilling knock-off designer duds and goods?

Beyond that, does anyone have any ideas as to how eBay could even accomplish such a feat? The site is currently crawling with fakes, and while some of the time it’s obvious which items are counterfeit (who sells real Fendi bags for $20?), other times it’s not so easily evident. Hiring a department dedicated to sniffing out phonies would be a first step.

While I’m certain there are books of case law dedicated to this topic, I’m curious to hear your opinion as an entrepreneur or small business owner. Let us hear it in the comments section below.

Burberry
Fake Burberry trench—or real?

It’s Been A Slow Quarter For IPOs—But Why?

Monday, June 30th, 2008

Sure most start-ups are a long way from an IPO, but admit it—going public is still a dream most entrepreneurs like you have. Unfortunately, it’s been a bleak quarter for businesses looking to hit the big time by going public.

Not a single VC-backed company went public this quarter. The last time that happened was 30 years ago, in the first quarter of 1978. While naturally that’s bad for entrepreneurs, it’s equally annoying for VCs looking to cash in on their investment in a start-up.

While obviously a slow economy has contributed to the problem, some insiders say that the problem is also the types of businesses VCs are backing. Paul Kedrosky, an investor/blogger, tells the NY Times:

“There is nothing that the industry is producing that investors want. The stuff they’re investing in is idiosyncratic – it’s fun and appealing to them but Wall Street doesn’t care.”

Even worse, he says of Silicon Valley VCs investing in Web 2.0:

“The Valley is operating in its own little world, and the capital markets don’t care about the things that are getting the Valley excited.”

What do you think? Are the types of investments VCs are making as much to blame as the down market for the recent dearth of IPOS? We’ve written before about the trouble many of these Web 2.0 companies have had with monetizing themselves—which certainly could contribute to Wall Street’s lack of excitement over those start-ups. But nonetheless VCs are ostensibly still wise enough to fund businesses that they truly believe will go public, not just their flights of fancy—or are they?

Give us your thoughts.

IPOMan

Sucess Story: ARM Holdings

Monday, June 30th, 2008

Here’s a different kind of success story this morning—ARM Holdings, a start-up chip maker is actually presenting a serious challenge to Intel, the grandaddy of chipmakers, reports the New York Times.

ARM, a British upstart firm, is slowly pecking away at Intel through its new chips for mobile Internet technology like the iPhone—something Intel has struggled with. Given that the PC continues to shrink in size, and that users are increasingly using smart phones for Internet browsing, many experts say that mobile Internet devices may eventually make traditional PCs obsolete.

Here’s where ARM shines. Two of the companies they’ve licensed technology to, Qualcomm and Nvidia, have been handily competing with Intel by offering chips focused explicitly on answering the challenges of mobile web. While Intel continues to emphasize the computing speed of their chips—which are fast—speed isn’t the primary concern when it comes to creating chips for mobile devices. What’s more important is how efficiently chips use power. No one wants a dead cell phone after surfing the Internet for five minutes. Qualcomm’s Snapdragon chip speaks directly to this. While it has the same high-definition imaging capabilities of an Intel chip, it uses half the power. And Qualcomm claims that Snapdragon’s cheaper than the Intel models.

While Intel is unquestionably still the giant in the chip-making industry, what’s clear is that a small upstart is actually challenging them. While the Times notes that key partners like Dell are unlikely to ditch Intel in favor of a company like Qualcomm, one wonders that if mobile internet is the wave of the future, if those relationships will even matter.

What do you think?

ARM

Weekly Round-Up: Reflections On Angelo Mozilo’s Tan.

Friday, June 27th, 2008

-.Com suddenly is going to get a lot more company. ICANN, the Internet regulatory agency, opened the door this week to applications for a new domain names like .nyc and .sports. Looking to name a domain after your business (a la eBay)? ICANN estimates that’ll cost you a cool $100K-plus.

-We learned what some VCs are looking for in a start-up and what they aren’t. Making the Internet easier to use, fusing cyberspace and real space, and growing mobile Web tops their list. You having a life? Not so much.

-Survey Says: Things aren’t as bad as they seem! You guys overwhelmingly feel that the economic outlook for the small business isn’t as bleak as, say, The New York Times makes it sound. For those of you who are feeling a little less rosy, we found a game that lets you figure out who killed the economy—and your cash flow. Have fun pointing the finger!

-Nokia has devised a new business plan specifically intended to snatch away part of the iPhone’s market share. Smart—but no word yet on whether offering users free concert footage is enough to draw them away from the allure of the iPhone.

-For this week’s Q&A you asked whether there’s grant money available for for-profit businesses. Our .02 cents? Not really.

-Lastly, let’s not forget Countrywide CEO Angelo Mozilo, who apparently drank too much of his own Kool-Aid, telling shareholders this week: “Countrywide has had a positive impact on the country”. While that’s insane, what I really want to know is what’s with the tan?

Happy Friday!

Angelo

Bill Gates Gets The Final Word.

Friday, June 27th, 2008

Today is Bill Gates’ last [official] working day at Microsoft before he enters a pseudo-retirement that will include learning biochemistry, finding a cure for malaria, developing drought resistant crops, and then rocketing off into outer space where he’ll set up the first non-earth society and develop a cure for mortality AND the common cold.

But seriously, we did notice an interesting tidbit admist the media brouhaha over Gates’ departure this week. In an interview yesterday, Gates told NBC’s Tom Brokaw that any deal with Yahoo at this point is unlikely. While that news isn’t exactly shocking, it, for me at least, puts to bed months of speculation on this blog and elsewhere whether the two companies will ever make some sort of deal. They will not.

bill-gates-1983

It’s A Hard-Knock Life [For Them].

Friday, June 27th, 2008

-Think blowing through $500 million in capital would take effort? No so for “virtual network operator” Helio, who whipped through a cool half billion in two years without much to show for it (except a cool logo). Today Virgin Mobile announced that they plan to bail out the company for $39 million in equity and costs.

-In the least surprising news of the week, Continental Airlines and American Airlines announced more cuts. Houston-based Continental says they’re grounding 67 jets, reducing flights, and laying off 3,000 employees. American intends to cut 8% of their management positions and support jobs.

-Further confirmation that newspapers are dying: The McClatchy Co., a newspaper publisher in Miami, Sacramento, Fort Worth, Kansas City, Charlotte, and Raleigh, announced its plans to slash its total workforce by 10% this week. They say the economic downturn and the continued drop (a euphemism for the bottom dropping out) in newspaper classified advertising precipitated the cuts.

-Brunswick, best known [by most] for making bowling pins, announced today that plan to substantially reduce the size of its operations. They say they’ll cut their fixed cost structure by $300 million by shutting down four plants and axing 2,700 jobs. In addition to bowling goods, Brunswick also makes boats, which has increasingly become an albatross for the company as retail sales of boats continue to decline.

brunswickboat

More Signs Of The Apocalypse: Beer Costs More By The Barrel Than Oil.

Friday, June 27th, 2008

Think the $140 price tag on a barrel of oil is pricey? Not compared to a barrel of Perrier (well, if it came in a barrel), which packs a $300 price tag. Your morning Starbucks latte? That checks in at a whopping $957 a barrel, making oil look like the cheap office sludge.

While sure there are all sorts of reasons that these comparison aren’t quite perfect (Perrier doesn’t come in barrels! It isn’t traded in the futures markets! It’s man-made), we still like this CNBC graphic comparing the cost of sweet, sweet crude to other, equally coveted goods—like Budweiser beer, which costs $447.25/barrel.

Which_cost_more

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