Categorized | the roundup

The Roundup September 21

Hostel poster
Netflix’ recommendation engine says, “People who liked Hostel also really liked The Great Chipmunk Adventure!”

Netflix shows the world how crowdsourcing is REALLY done.

Netflix, the movie rental company, announced on Monday that a seven-man team was the winner of its closely watched three-year contest to improve its Web site’s movie recommendation system. That was expected, but the surprise was in the nail-biter finish.

The losing team, as it turned out, precisely matched the performance of the winner, but submitted its entry 20 minutes later, just before the final deadline expired. . . .

Yet the scientists and engineers on the second-place team, and the employers who gave many of them the time and freedom to compete in the contest, were hardly despairing.

Arnab Gupta, chief executive of Opera Solutions, a data analytics company based in New York, took a small group of his leading researchers off other work for two years. “We’ve already had a $10 million payoff internally from what we’ve learned,” Mr. Gupta said.

(“A $1 Million Research Bargain for Netflix, and Maybe a Model for Others ,” New York Times, September 21) The key to crowdsourcing is not just to provide a prize for the winner, but real value for the losers, as well. All the folks who worked on the Netflix recommendation engine ended up producing research that they could monetize for their own business. But this is also bad news for Netflix: all these teams can now sell the capabilities they acquired to Netflix’s competitors. When WalMart developed the most sophisticated logistics information technology on the planet, they were so far ahead that no-one has ever been able to catch up. If they had crowdsourced the problem, then all that brilliant would be available to their competitors for an instant catch-up — so we’d all still be shopping at Target and K-Mart.


Yet another big money-maker for the recession . . .

They’re called salvage grocery stores and shoppers say they offer up big savings. Stores like Morrie’s Grocery Outlet in Hudsonville sell damaged, expired and overstock products that traditional stores don’t want on their shelves.

And they do it at a big discount.

(“Salvage groceries big in bad economy,” WOOD-TV, September 21) Salvage groceries are doing business like gangbusters even though they’re a.) hard to find, b.) do no advertising, and c.) are, well, kind of junky. Why? For the same reason Costco stock has recently been upgraded to “Outperform” by stock analysts. Cheap, even with miniscule margins, means big money in a recession. Think about it. Now’s the time to go into salvage anything, particularly if you can sell the products over the Internet.


0.9% APR for a brand new, $180,000 Bentley. We’ll even give you $100,000 for your used F-150!

The depths of the recent recession, a backlash against conspicuous consumption and cutbacks in leasing offers have taken a bite out of the conventional wisdom that luxury brands are resistant to financial downturns.

The proof isn’t just in the nearly 32% dip in luxury auto sales, which is worse than industry-wide declines. Luxury brands now are offering incentives that rival those on pickups and SUVs and using new marketing approaches that focus on fuel efficiency.

Take Porsche, whose models start at $46,000 and top $130,000. Its average incentives, which include cash-back rebates and other deals, were $4,412 through August, according to estimates from Autodata Corp. That’s up 657% from the same period last year.

Bentley, meanwhile, is offering 0.9% financing on the Bentley Continental GT luxury coupe, which starts at about $180,000 . . .

For more than a year now, sales of nearly every luxury auto brand have been walloped just as badly — and in many cases worse — than the overall industry, causing automakers to scramble to boost incentives and shift marketing strategies.

Through August, sales of luxury vehicles declined 31.8% compared with a total industry sales decline of 27.9%.

(“Luxury vehicle market tanks,” Detroit Free Press, September 21) For Bentley, sales have declined almost 60% in the last year. Do you think anyone tried to trade in a Bentley in the cash for clunkers program? Now, I come from the depression-era-parents a-car-is-just-a-car school; anyone who pays over, say, $25,000 for a car is, in my opinion, an idiot. It’s just a stupid car that gets you from point A to point B. Would you buy a $5,000 lawn mower? Just to prove you could? I have long felt that folks like BMW and Jaguar and Bentley were simply in the rich-folks-are-suckers market, and the recession, I’m guessing, is bringing this point home. (Just in case you think I’m being facetious, no-one ever lost money jacking up prices for rich customers. No-one.)


If they can make money on wine, then you can make money on . . . fill in the blank.

A crop of Silicon Valley entrepreneurs have launched mainstream, profit-generating Web sites devoted to — wait for it — wine collecting. In Mencken’s day good wine was the province of a tiny, well-educated urban elite. But in 2008, per capita wine consumption in the U.S. surpassed that of beer for the first time. You can now find pretty decent vintages at Costco (COST, Fortune 500).

The more you imbibe, the more curious you’re going to become about the differences between Californian and French, Chilean and Argentinean, cabernet and pinot, 2007 and 1997. And you’re increasingly likely to find answers to your questions online. . . .

Bottlenotes is like the Match.com or the Netflix (NFLX) of the wine business. It asks you a few questions about your tastes and builds a profile of your palate. For around $60 a month, the site will then send you bottles that your mouth will probably thank you for. It’s the perfect resource for inexperienced oenophiles who want to make their own journey into wine without a snobby sommelier at their elbow. . . .

Meanwhile Vinfolio.com, founded in 2003, is rapidly becoming the eBay (EBAY, Fortune 500) of wine, providing a marketplace for collectors to sell off their stock. More than 100,000 collectors have registered 12 million bottles, worth a whopping $2 billion, with the site, which takes a 15% commission from every sale. Vinfolio also offers a free iPhone app that tells you the average price of any varietal you might see in the store.

(“Drinking for dollars,” CNN Money, September 21) Put on your thinking caps, boys and girls. What can you turn into a hot property for online information from which you can sell product? What kind of product can you build a Match.com or eBay for? Cheese? Beer? Unique art by unknown people? Salvage groceries (sorry, just testing to see if you’re actually reading this). The ideas . . . and dollars . . . are endless.

Be Sociable, Share!

Leave a Reply

Shoestring Book Reviews

Shoestring Venture Reviews
Richard Hooker on Jim Blasingame

Shoestring Fans and Followers


Categories

Archives

Business Book: How to Start a Business

Shoestring Book

Shoestring Venture in iTunes Store

Shoestring Venture - Steve Monas & Richard Hooker

Shoestring Kindle Version # 1 for e-Commerce, # 1 for Small Business, # 1 for Startup 99 cents

Business Book – Shoestring Venture: The Startup Bible

Shoestring Book Reviews

Shoestring Venture Reviews

Invesp landing page optimization
Powered By Invesp
Wikio - Top Blogs - Business