I am currently in Luxor, Egypt and internet has been spotty. I’ve given up trying to get my computer to connect and am writing this on my phone (Thank you eSIM technology). Premium subscribers will get a post on Thursday (written in advance). I will be off next week, and then back later in the week of January 2nd. Then finally back to regular schedule programming.
These are some stories I have been saving to write about, that will now just be a series of links with a little bit of commentary:
Razor and Blades: Gillette is famous in business schools as the best example of the “razor and blades” strategy: selling razors below cost to build market share so that you can better monetize with over-priced blades (best example today is printers and ink). But it turns out Gillette did NOT use that strategy and it is more of a myth or just-so-story. Very short and easy to read summary here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1676444 (sorry. I can’t get hyperlinking to work with the mobile editor)
Morning Consult lists the fastest growing brands in 2023. OpenAI is number one (shouldn’t it be ChatGPT?). Surprising number of brands that were fairly large before 2023 on the list: https://pro.morningconsult.com/analyst-reports/fastest-growing-brands-2023
Return to effort: lots of people want to believe that employee output does not drop if a company moves to a 4-day week. The argument is that there is diminishing returns to putting in longer hours. It’s definitely something that most people WANT to believe. I’ve always been skeptical. So it’s nice when my priors are vindicated. This study from Bloomberg found that analysts who spent more time logged into their terminals (ie more hours working) make both more frequent and more accurate recommendations. This should not shock anyone but it will: https://www.ft.com/content/747b8ad5-864b-45ce-a79f-971a3fdf2402
Operationalizing AI: Wendy’s is using AI to take drive thru orders. The AI appears to be 99% accurate and “speeds up order taking by 22 seconds”. Since customers can’t see the order takers, and the order taking process is very simple and constrained this seems like a good use case. Unfortunately, given the wages paid to driver thru order takers, it won’t save that much money (Wendy’s is not the first quick service restaurant to claim it was using AI for drive thru l, but earlier attempts were apparently “fake AI” and the actual order takers with offshore in the Philippines - given the wage discrepancy between the Philippines and local one would think this would have been done more. Given it hasn’t it shows, I think, how little savings this really represents). Link: https://www.wendys.com/blog/drive-thru-innovation-wendys-freshai
Best Ads of the year: The Ad Spot has created a list of their top 8 ads of the year. It’s a good list. Watch the ads and be entertained while you clock I work-hours:
That’s it! For non-premium subscribers, have a great holiday and talk to you in the new year. For the rest of you I will be back on Thursday. Keep it simple,
Edward
Thanks so much for mentioning The Ad Spot! 🙏 Long time follower, very cool to see it featured here. Happy Holidays, Edward!