Retail or E-tail?

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As of this writing, the boom times that followed the Great Recession are still in full swing, with unemployment below 5 percent. Yet we see shuttered stores on Main Street. It’s as if our town never got the news. What gives?

E-commerce has transformed shopping habits, shifting attention from street-side retail and toward website e-tail. You can order nearly anything online — food, clothing, books and music, appliances and equipment — and have it delivered to your doorstep, no store visits needed, often for less than you’d pay at the mall. As a result, businesses have cut back on brick-and-mortar locations while Web retail surges.

Still, while it’s easy to order a dress online from JCPenney or Macy’s, it’s gotten harder to try it on first, as chains cut back on the number of outlets. The chief reason to visit a street store is to touch the merchandise; website images don’t quite get it. But lately some customers will visit stores, try stuff on, then go home and order the items cheaper from another company’s website.

As retail square footage shrinks and bandwidth expands, the tension between mail-order and in-store shopping opens up a window for e-tailers who can give patrons a real-world sense of product lines from a home screen. Brick-and-mortar retailers, too, are looking for ways to shift their stance in the new ballgame.

Online businesses have been innovating:

• Many clothing websites will send you items to try on at home.

• You can customize your order by size, color, features, etc., and thus access the entire product line — much more than a brick-and-mortar outlet can stock.

• Many e-tailers provide multiple views of products, and you can zoom in on the images for a more detailed examination.

• Online prescription eyeglass stores let you upload a photo of your face (or you can select an image of a face that resembles yours), click on prospective frames, and view them on the facial image to get a sense of how they’ll look on you in real life.

If you’re an online store owner or web developer, be sure to keep an eye on the technology as it evolves:

• 3-D computer and TV screens will become common, allowing you to replace flat product images with more lifelike ones.

• Some Virtual Reality headsets already allow customers to “walk through” online stores and examine merchandise in much more detail.

• Haptic (touch-sense) gloves will augment V-R headsets so your patrons can “feel” cloth, “heft” items to gauge their weight, and “touch” product surfaces.

• And who knows? Perhaps someday we’ll have “Smell-o-Vision”, along with humidity and temperature simulators, so we can enjoy the often-pleasing atmospheres of retail locations.

These technologies are burgeoning almost faster than we can write about them, so stay up with developments.

Meanwhile, if you’re a committed brick-and-mortar retailer, don’t despair. Advancing tech creates new opportunities for you as well:

• Empty stores mean lower rental costs, which reduces the price advantage of your e-commerce competitors. A shuttered store next to you is a chance to expand your retail operations simply by renting the spare footage and opening up a passageway between.

• Your retail store can promote your e-tail store. Some chains (Bed, Bath & Beyond, for example) encourage patrons to use store computers to order out-of-stock or specialty items directly from the chain’s warehouse. This protects the sale while getting customers into the habit of ordering from the retailer’s own website.

• Driverless vehicles will ease traffic, so getting to your store will be less of a hassle. These cars will need fewer parking spaces, reducing congestion while opening up acreage that downtown business groups can repurpose into, for example, parklike pedestrian avenues for shoppers.

• People like to meet and interact with other people in person, and your store can become a social locale when you add, say, a coffee bar or entertainment corner, or you can host designers, authors, and artists who conduct seminars, demos, and readings.

• Visiting your store becomes something of an event with a Virtual Reality system that teaches patrons how it’ll look and feel to use your products.

The world is transforming in ways we can barely foresee. Retail sales, too, will shift unpredictably. Shop owners and online vendors who keep their fingers on the pulse of that change — and who resist the temptation to sit back and rest on their laurels — will find ways to thrive. It won’t be easy, but it will be interesting … and, if you play it right, it’ll be profitable.


Robots and Riots

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You do not see union workers holding benefits for robots. — Stephen Colbert

There’s a Doomsday scenario where machines take over all jobs and everyone becomes unemployed. Evictions, hunger, and illness ensue. Riots in the streets. Calls for a guaranteed national income. Legislation to prevent robots from being built at all. Political calamities. A real mess.

French police unleashed tear gas and water cannons on demonstrators Tuesday as tens of thousands packed the streets of Paris in an outpouring of opposition to the government’s anti-labor agenda. news item

If workers will riot over incremental changes to employment, imagine how berserk they’ll go if all the jobs disappear.

“But robots will never take every job!” Oh, yes they will. We humans are clever — we’ve invented countless labor-saving gadgets over the centuries, devices stronger or faster or more precise than people can be. We’re also clever enough to invent mechanical brainpower that’s stronger, faster, and more precise than our own. In fact, we’re developing this Superior Artificial Intelligence as we speak. Such an intellect will eclipse our own poor powers and take charge. Soon.

(Which would you rather buy, something dirt cheap but excellent from a machine, or something flawed and unreliable and expensive from a human? Hmm.)

This could easily become a bad thing, since people thrown out of work generally don’t have money for food, rent, gasoline, and doctor visits. Also, most of us derive meaning from our labors, and without a job — a way to contribute — people might find themselves existentially adrift. Combine a lack of purpose with a lack of cash, and you get street riots and the other disasters.

And it also could be a good thing … if the automata serve us faithfully and make us all wealthy. We’d have endless free time to pursue our interests, with no need to convert hobbies into jobs. In that world to come, what matters would no longer be how rich you are, but how interesting you are. I call it The Star Trek Future.

(Yes, I’m well aware that this very blog could be replaced by automation. I’d have to find some other way to amuse myself. Tennis, anyone?)

A solution that lately has gotten traction is a guaranteed national income — a stipend for every adult citizen. If all people were unemployed, only those who owned investments would have regular income. The corporations would need to donate money to the unemployed, or none of them would buy any products.

The problem with this plays out as follows: I own a store, and you come in to get a candy bar but don’t have any money. I give you a dollar, and you hand it back to me for the candy bar. Essentially, I’m performing a short ceremony with you, at the end of which I give you a free candy bar. At this rate, I’ll go broke.

Another idea involves a kind of fiscal land reform: the government confiscates corporate stock and hands it out to everyone. We’d all become owners of the robots that took our jobs. Automated production would go to our bottom line, and everything turns out fine.

Except this would basically destroy the market economy. Nobody would invest in companies anymore, lest their hard-won gains be taken from them abruptly in some similar, future upheaval.

But what people aren’t talking about and what’s getting my attention, is a forthcoming rapid demonetization of the cost of living. — Peter Diamandis

What to do, then? It turns out there’s a solution that will likely unfold as a natural consequence of total automation of jobs. It’s called demonetization, and it will cause most prices to plummet. After all, robots don’t take vacations; they don’t need healthcare for their kids; they don’t go on strike; and they perform their tasks vastly more efficiently than can humans. They work much better and much cheaper.

Thus, though we may all one day find ourselves unemployed, our expenses could decline by as much as 90 percent. A meal at a fast-food restaurant would cost 50 cents, and a ride in a driverless taxi would set us back about 30 cents per mile, less than half the cost of car ownership. Dirt-cheap housing will be built using 3-D printing. Meanwhile, online education already is basically free, and the smartphone in your pocket comes with a slew of products and services that 30 years ago would have cost hundreds of thousands of dollars.

Given a small stipend from the government and/or a small stake in the big corporations, people would have more than enough cash to pay for basic necessities even if they were out of work.

It’s also important to bear in mind that non-human employment will likely emerge over time and not all at once. Economic downturns in recent decades have tended to resolve themselves with “jobless recoveries” as businesses bought new software first and then hired real people. This hints at workforce automation building momentum slowly over several decades.

Instead of being eliminated, your job might merely get cut back, bit by bit: they’d offer to keep you on at reduced hours that drop even further over the coming months and years. Of course, your pay would decline, but meanwhile your personal expenses will have plummeted due to all that cheap automation everywhere in the economy. So who cares? You just got a bunch of extra hours away from work while retaining essentially the same lifestyle.

(If you’re worried this optimistic scenario won’t play out according to plan, there are a number of ways to adapt your work life to reduce or delay your risk of being replaced by a machine.)

If business and government can coordinate properly (and that’s a BIG “if”), automation might supplant us gradually, so we retain a declining level of employment while prices also decline. We could actually achieve a soft landing into a life of prosperous leisure.

That’s not Doomsday. That’s more like Paradise.

* * * *

UPDATE: Will we control AI?

UPDATE: Jobs are already disappearing as robots take over

UPDATE: Automation begins to clean out white-collar jobs

UPDATE: The rise of the useless class

UPDATE: How to get paid in the Age of Layoffs


Women Who Put Out Fires

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Recently there’s been chatter on how women often become leaders during crises. A number of examples come to mind: Carly Fiorina (Hewlett-Packard); Mary Barra (GM); Marissa Mayer (Google, Yahoo); Margaret Thatcher (UK Prime Minister) and Theresa May (UK Prime Minister). All these women attained high leadership positions during major upheavals in companies or countries.

Why do crises and women leaders go together? Two reasons stick out: (1) the men screwed things up and don’t want to touch the problem with a ten-foot pole; (2) groups cast about for a fresh perspective, saying, “Let’s see what a woman can do with this situation.”

Of course, sometimes men on the outside are simply waiting for the problem to overwhelm the woman so they can claim, “See? She can’t do it! But we can!” and winch themselves back into power.

Thus women candidates for leadership may want to think twice before gambling on a position that could turn out to be a sucker bet.

It brings to mind an old joke: “Why do ducks have webbed feet?” … “To stamp out forest fires.” … “And why do elephants have flat feet?” … “To stamp out flaming ducks.” You don’t want to become a pile of ignited feathers squished by an elephant of a crisis.

Two approaches to this dilemma are likely to be popular:

1. Complain that “men are no damn good” and they only use women in blazing emergencies and then toss them under the fire truck when the going gets smoky.

2. Learn how to put out fires.

Number 1, above, may be partly true and therefore useful to know. But complaining does not a leader make.

Number 2 is where the money is. A crisis is a woman’s chance to demonstrate calm capability. To that end, prepare for the opportunity:

• Learn how to handle budget emergencies

• Learn how to cut red tape

• Learn how to lay off employees, especially men who will try to intimidate you when you hand them a pink slip

• Learn how to cut spending, especially pet projects that are squirting money like severed arteries

• Learn how to meditate (or anything else that keeps you calm and unflappable)

With hard work, smarts, and a bit of luck, a woman can save the day, convert a trap into a triumph, and rise from patsy to hero. At that point, she should make sure her future compensation reflects her excellent performance — and/or be ready to field offers from other companies desperate for a turn-around artist.

So, ladies: prepare for the job as if it’ll be a series of emergencies … assemble your fire equipment … and go put out some fires.


How to Multitask

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The multitaskers perceived that they performed better, because their brains were more stimulated, but in every single study they performed worse. — Chris Bailey

When you are in a hurry, you are in danger. — airplane pilot’s adage

There’s an old Buddhist story where a businessman visits a Zen temple and says to the Master, “I need to become enlightened. How long will it take?” The old Roshi answers, “A minimum of one year.” The businessman says, “That’s way too long! I have a company to run.” The Roshi replies, “In that case, it’ll take five years.”

Many of us are busy and harried, and we cast about for productivity tools to help us get more done in less time. One of the most tempting techniques is multitasking, or doing several things at once. Pretty soon we’re driving while shaving and talking on the phone and texting and grabbing quick sips of coffee. It’s exciting! We’re getting things done.

Except we aren’t. Our brains are poorly suited to thinking about more than one topic at a time. It may feel as if we’re accomplishing more, but in fact we’re performing worse.

Yet we’ve seen people do multiple things simultaneously with apparent success. And, after all, we can walk and talk at the same time. Brush our teeth and listen to the news. Play the piano with both hands.

The piano: you read the music while managing keys simultaneously with both left and right hands. Heck, it’s like those super-geniuses who can write two separate sentences at the same time, one from each hand, on a whiteboard!

But it takes time to learn a new piece: you begin to memorize phrases and sections so they become automated as you study the next segments. Basically, you’re transforming each section into “brushing teeth”, where you don’t have to think about it anymore.

If you’re going to multitask, you must do it deliberately. Take the time now to automate small physical tasks — turning them into consistent routines until they’re memorized — so your brain is free to concentrate. The effort will pay off later. Remember: multitask rote physical stuff, not mental stuff.

Here are the main ideas:

  • Do one mental task at a time: Resist the temptation to do multiple mental jobs at once. (Examples: reading and talking, talking and texting, conferencing and texting, anything and texting.) Instead, calmly go through your list, one item at a time. No panic! You’ll get there.
  • Automate physical activities like making copies, brewing coffee, changing your tie, driving. (But be careful! Nearly any activity can require full attention on occasion — especially driving — so stop with all the texting!) Go watch a good bartender mix drinks automatically while chatting with patrons, and you’ll get a sense of it.
  • Slow down to speed up: If you hurry, you tend to perform poorly. (Remember that time in the parking lot when some bigwig was waiting for you to pull out of your space so they could use it, and they honked their horn, and you rushed and dropped your keys under the car, and hit your head as you got in, and dropped the keys again, this time between the seats? You get the idea.) Anything you rush gets worse, including multitasking.

So now you’re at work, and your boss yells, “Where’s that report, Jenkins?! And get down to Receiving and find those overnights! Also, Simmons got sick, so grab someone to fill in!” You take a deep, calming breath and say:

“It’s on my list.”


A Survey of Startups

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Nearly all startups fail to scale up.

There — we got the bad news out of the way. The good news: it’s possible to greatly shorten the odds by following a few simple rules.

A report on recent MIT research lays out some pointers:

“Compared to average startups, which have a one in 3,500 chance of experiencing growth, the top one percent of firms with these characteristics have a much better chance (one in 100) of taking off. New startups are four times more likely than the average startup to grow if they are a corporation, two and a half times more likely if they have a short name, and five times more likely if they have trademarks. Furthermore, firms that apply for patents are 35 times more likely to grow. And, curiously, eponymously named firms are a whopping 70 percent less likely to grow.”

There’s more, but in a nutshell:

  • Incorporate
  • Use a short name (not the founder’s name!)
  • Nail down your trademarks
  • Apply for patents
  • Locate in a high-tech region:
    • Silicon Valley
    • Southern California
    • Washington state
    • New York / Boston
    • Texas

Oh, and let’s add the standard principles for business success:

  • Provide a product or service people need and love
  • Make what you sell vastly better in some important way
  • Hire excellent people you can get along with
  • Stay focused on results (instead of signs of your own importance)
  • Work your butt off for 4 years or more

What could be simpler? Now get to it.


Expertise: Complex or Simple?

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Success is simple. Do what’s right, the right way, at the right time. — Arnold Glasow

Art is the elimination of the unnecessary. — Pablo Picasso

Beginners hardly know anything, while experts know a lot. Thus skills start out simple and get complicated as you learn them. Right?

Oddly, it’s the other way around. Beginning efforts are inefficient, arbitrary, and random. And randomness can generate enormous complexity. Expertise, on the other hand, is simple and straightforward. The expert knows what to do directly and effectively.

A professional will know many more things about a given skill than an apprentice, but those things are discreet and focused. The beginner’s mind casts about in all directions for a way through a situation the expert has already solved.

The first time I tried a crossword puzzle, it took two hours and a dictionary. Within a year, I was tossing them off — in pen no less — in five minutes. (Competition puzzlers often can complete them in less than two.) My crossword skills went from inefficient and ignorant to knowledgeable and focused. Beyond the puzzle-solving techniques I’d learned, I’d also internalized a vocabulary of special words for filling in the odd corner. But those skills and words were specific: instead of struggling with a dozen approaches, I had particular ways forward; instead searching through reference books, I could call on a short list of words from memory.

Blood-flow studies demonstrate that beginners’ brains are much busier than those of professionals: learners are all over the map, while masters are homed in. “ . . . [E]xtensive practice over a long period of time leads experts to develop a focused and efficient organization of task-related neural networks, whereas novices have difficulty filtering out irrelevant information.”

Basically, the pro sees the problem as a pattern with a solution, while the newbie sees a jumble of noise. One sees a map; the other sees a maze. The expert finds pathways; the beginner wanders around.

Expertise, then, tends to be elegantly efficient and simple, with few wasted moves — it’s economical — whereas students must slog slowly through their own ignorance.

Think of the inexperienced marketer or administrator, who takes too long to explain a situation, and the seasoned pro who encapsulates the problem in a phrase. Or the office assistant who makes a series of mistakes that his boss clears up with a couple of quick decisions. Or your golf partner’s swing, with its inefficiencies, compared to the fluid power of Rory McIlroy or Jason Day.

Of course, no two problems are the same, and even the experts must slow, sometimes to a crawl, as they approach new questions. In that respect, everyone is a beginner. But the pros have tools of experience they can wield at all times to cut quickly through the randomness of novelty.

What about all that knowledge and lore, the sheer number of facts to be learned? Doesn’t that make expertise more complicated? True, your acquired skills involve a library of facts a beginner won’t have. But those facts greatly simplify the process, enabling you often to see at a glance into the essence of a problem, turning it from a puzzling predicament into a process quickly fulfilled. Your store of knowledge makes things easier, not harder, and you complete tasks more quickly, with less total energy expended.

To attain the simplicity of mastery in any field or profession:

  • Relax … and practice: Your brain will find its way through the maze of ignorance to the exit of competence, and it will do so automatically — all you have to do is practice. There’s no need to force things; your mind will grow the particular skills it needs in good time. (Still, it’s possible to “master mastery”, as with the suggestions that follow.)
  • Find mentors: Don’t re-invent the wheel if you can befriend an expert who will teach you how it’s done. Of course, you can also study books and other media that describe the skills you’re learning. All these resources will speed things up tremendously.
  • Find the general principles: Every skill has a set of fundamentals which serve as shortcuts to learning. If you can master these, you’ll become expert faster. (You’ll know you’re becoming competent when you discover how to break the rules now and then for even better results.)
  • Find simpler ways: Once you have the basics down, think of how you can do them more efficiently — how to perform the action with fewer steps, how to say it in fewer words, how to focus in on the important data. This will move you quickly toward the end goal of polished mastery.
  • Find the 80/20 Rule in your field: As you practice, you’ll discover areas where your efforts generate much higher returns. If 20 percent of your work gets you 80 percent of your return, then increase the 20-percent activity.
  • Search for expertise in others: When partnering or hiring, look for people who have an easy grasp of the topic, who respond to challenges in a relaxed and confident manner, and who ask questions and incorporate the answers quickly into their process. Effective mastery depends, not only on your own skill set, but on the competency of your co-workers. Leverage each others’ contributions to multiply the results.

The goal is to be effective — to arrive at the solution without wasting time, energy, or money. While the student puts in hours, the master gets results. A few well-placed words, a stroke of a pen, a simple phone call, a single idea that solves a dilemma, an elegant motion by a craftsperson — these are the home runs, the three-point baskets, the hat tricks in the game of expertise. Practice the simplicity of mastery, and your scores will soar.


UPDATE: The seven fatal thinking flaws, and how to transcend them


Your Livelihood and the American President

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Running a brilliant campaign does not translate into running a brilliant White House. — Gail Collins

Does it matter to your bottom line what the government does? Absolutely. Legislatures and bureaucrats and presidents and prime ministers can screw up an economy with the stroke of a pen. Witness, for example, the run-up to the Great Recession of 2008: the U.S. set low interest rates, encouraged home buying (and strong-armed banks to provide loans to incompetent borrowers), spent nearly $2 trillion on a useless military venture in Iraq, then blamed Wall Street when the bottom fell out … and then bailed out the Street’s investment bankers while workers and small firms on Main Street had to suck it up.

Okay, but does it matter to your bottom line who is the U.S. president? Yes and no. Great power does flow through the White House, but it’s like water through a firehose that’s hard to point at problems without backsplash or getting knocked over. Over the past century, a few Chief Executives have managed to wield enormous influence (for better or worse): Wilson, FDR, Johnson, Reagan, Bush. But most have come and gone without leaving much of a mark.

A finer-grained question is: does it matter to your income stream which party a president belongs to? Campaign contributors tend either to be labor groups or corporations, neither of which are keen on draconian measures that might cause job losses or declines in revenue. So there’s a political limit, despite all the rhetoric, to what either party can do to the economy once it controls the White House.

In fact, it may not much matter which party holds the office. Sometimes a Democrat can be good for business (as with Clinton’s budget surplus), and sometimes a Republican can be bad for it (witness Bush with Iraq and the Recession). What’s more, it’s hard to tell what kind of administrator a candidate will turn out to be, and it’s often just as hard to foresee what policies they’ll instigate once in office. Meanwhile, situations can change suddenly — Pearl Harbor in December 1941 … 9/11 … the recent upheavals in technology — with unpredictable results for White House policy.

On top of that, the Constitution was written deliberately to throw sand in the gears of political change, impeding the government from rushing headlong into wild-eyed projects that might do more harm than good. This applies to the Executive as much as to the Legislature. Sometimes the American government breaks through and hurtles toward disaster, but usually progress is glacial. Thus one change of government probably won’t result in enormous shifts in society or the economy.

In recent years, though, the purview of the White House has widened. Under George W. “I Am the Decider” Bush, overly broad use of signing statements — which are meant merely to outline a Chief Executive’s plans for implementing legislation — enabled him to get away with backdoor line-item vetoes. Then the administration pushed through Congress laws that vastly increased federal power to spy on, arrest and/or kill U.S. citizens, often without warrants.

In 2009, Barack Obama — a constitutional scholar who as a candidate railed against Bush’s assault on civil liberties — became president and added to Bush’s power grab, especially in the overuse of Executive Actions.

Every president feels beleaguered by ongoing assaults from political opponents and will cast about for any influence that may win the day. No sitting president willingly lets go of arbitrary clout inherited from previous administrations; worse, there’ll be an enormous temptation to expand on it. Basically, if a Chief Executive exceeds the limits to his authority and nobody calls him on it, the next president will do the same … and then some.

The overall result is an ongoing expansion of Executive power, with no sign that it will slow down. In that respect, it doesn’t matter which party occupies the Oval Office; presidential prerogatives will likely continue to grow. More and more edicts will be handed down arbitrarily, rulings that could cause your company, or your career prospects, to lurch crazily.

What’s a business owner or employee to do?

  • Don’t waste a lot of time worrying about who will be the next president. Their behavior and influence is hard to predict and often vastly different from what they promise. Besides, fretting about events you have virtually no influence over is a waste of resources. Instead, put your energies where they can do some good — work on your career. Hold a steady course despite the changing winds.
  • Assume taxes and regulation will continue slowly to increase, no matter who’s in office. They have done so for decades, and there’s no sign they’ll halt or reverse course. Any compliance process you can computerize will simplify the burden and save some of the time and money you’d otherwise lose.
  • Assume recessions will recur under Democrats and Republicans alike. The Fed tends to tweak interest rates to stretch out economic booms, and the resulting busts become that much deeper, regardless of who’s in office. Resist the temptation to invest or make expensive purchases at the end of a boom simply because you’ve been doing well and there’s no sign of trouble. You’ll find yourself over-extended just as your income drops.
  • Assume 5% unemployment is the best we’re going to get. Rarely does the rate fall much lower, and soon enough it begins to swing upward, often doubling within a year or so. At 5% get ready to batten down the hatches.
  • Never assume a strong economy, or a good job or business, will continue indefinitely, unmolested by national turmoil or bad governance. As they say in poker, “Take some chips south” — squirrel away cash from the win streaks, and you’ll still have resources after a loss.
  • Never assume Washington will save you! They’re much more likely to cause problems than fix them; at best, their help is a mixed blessing. It’s better to have yourself on your side: you’ll retain the best ally you can get … for both bad times and good.