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Atomantics

Thursday, January 26, 2012

I've said it once, I'll say it again


Netflix has a brilliant strategy.

Is anyone really surprised with Netflix earning results? We can all add right? They only lost 1M members and with the other +20M members they doubled their revenue from many of them. In the end it's about the bottom line. The idea to charge more for the same service was a fantastic idea! I'm always happy to see companies jump on board.

Take one Bay Area company that did it before netflix. Odwalla.

What was a 15.2 fl oz bottle of nutritious sugar filled deliciousness is now a 12 fl oz bottle of the same great tasting nectar. Oh, but with 78.9% of the fl oz offering, we should only be paying 78.9% of what was a handsome $3.39 price tag, right? Wrong. Odwalla's price has stayed the same, even continuing to increase with inflation like normal.

So you're asking yourself "What ever came of Odwalla? They must have been run out of town.They have to have floundered into the health beverage abyss." Chances are you're not asking that because you just saw or purchased one in the last 3 weeks. Odwalla is thriving, and in most cases continues to be the market leader in their industry.

Competition is fierce, the biggest of which comes from Naked fruit juices. This size change should surely be the opportunity they've been looking for to top the Odwalla "Superfood" giant. Wrong again, Naked has also reduced their juice size offering to 12 fl oz. Oh ya, and they also maintain the same price tag.

So the next time you find yourself paying the same for less of the same, don't say you've been Netflixed, because the truth is this has been going on far longer than we want to admit.

Friday, January 20, 2012

Google Shmoogle - Who cares about fun!

In the last few days the interwebernet has been ablaze with comments regarding the recent results of workplace polls. Turns out that Google is a really great place to work. Really?
Who has ever said, I want to spend 9 hours a day sitting in a small room with 3 walls with nothing but radiation and buzzing fan noises coursing through your pale atrophied body. I know I have! Is it any shock that people enjoy working at Google? I notice these same news stories citing some of the bigger perks as possible reasons for this ASTONISHING revelation. They list things like:
  • Electric Cars to run errands in during lunch
  • Bikes to get you from place to place
  • Bowling Alleys
  • Rock Walls
  • Swimming Pools
  • Weekly "All-Hands" meetings with the CEO
This is great and all but I thought after spending a summer @ the Mountain View "Googleplex" I hope to shine some light on some of the other perks that you may not be aware of.

  • Do you know who attends those weekly meetings? You might say that the CEO and other notable members of the executive team, and you would almost be right. Earlier in the year Lady Gaga made a surprise appearance performing for just the employees @ the Googleplex.
  • Every bathroom has a toilet/bidet with heated set and fan to dry you off so you don't need paper.
  • Froyo out your ears.
  • Food courts with mountains of local and national favorites (they are pretty light on the unhealthy stuff like candy bars but make it up to you in fresh delicious California fruit).
  • Parking is never a problem.
  • And the restaurants. I've paid $30 in Kansas City for worse food then they give away at the swipe of a card.
  • Automotive services.
  • Heath checkups.
  • I even stumbled upon a group learning Yoga from a fellow Googler during lunch.
  • Did I mention the FOOD!!!

What does this all mean. Larry Page hit the nail on the head when he said "We're not about perks, we're about people." This is the Google strategy. I have never worked around a group of people with more passion for their profession than at the Googleplex. Even contractors catch the Google Wave (pun intended). Google has decided that its investment will be in its people. Give them a place they will love to work and innovate in. Promote creativity and happiness so that you can extract every good and positive bit of value from them.

Google is approaching customers through its people, and unlike those in grey drab offices with lifeless drones walking about ruing the day they became an accountant, Googlers love it.

Consider Porter's HBR article "What is Strategy". He talks at length about mapping and developing activity systems. In order to understand your strategy and approach (Objective, Scope, and Advantage) you have to first know what you are not.

What Google is not:
What Google is telling us is that they are not a "cool" place to work. They are not creating healthier employees. Google is not fun.

What are they doing?:
Starting with the customer they decide what activities they will employ to provide a profitable service that customers NEED. In order to do this Google creates a simple activity system. Many may say "SIMPLE? these guys are doing everything!". To think that means that you have inaccurately understood the companies strategy. Their strategy is to motivate their employees to innovate and invent new and useful tools that provide additional platforms for advertising (The money maker!). All Google employees understand that this approach requires trade offs. They don't invest heavily in providing a single application with all of these features, even though it would be much easier for the consumer. They have to force consumers to be exposed to as many ads as possible by dissecting all of the products across the board.

So in the end, what we may see as a thousand product offerings, perks for employees, and entered industries is actually one neat and tidy network of efficient activities aimed at generating wealth. Or in other words, a really great strategy.