Chris Anderson of Wired Magazine says we are going to sell a whole lot more of a whole lot less.  Example, Here are the ratings for past tv shows, Cosby had 35%, Beverly Hillbillies was a 40, Seinfeld was about a 23, Lucy was a 70, but CSI is a 10.  His point is that the market for any one thing is smaller than in the past but that there are a whole lot more markets.  The Internet has allowed for this sort of niche shopping.  My Space and My Tube are examples, everyone is posting something about themselves on the premise that someone out there is interested. 

Look at a magazine stand at a Hastings for example.  I can remember when Life and Time were the big magazines of choice.  Now there are hundreds of titles about all sorts of niche interests, ditto of course for the web.

The interview Redefining Supply and Demand is on page 6P of the 10/8/06 Sunday DMN or you can read it at the Reason Magazine Site  by clicking this hyper link.  The implications are huge for marketing as well as politics. Note that there are four different people running for governor of Texas, very different people in fact as evidenced by the debate Friday night.

How can you utilize this fracturing of markets to found a business for yourself or how can you involve yourself in this new reality?

DLE

No I am   not going intimate in this Blog.  KISS is the acronym for Keep it simple stupid.  No I am not referring to my class or any reader as stupid but to industry insiders.  Page B1 of the Wed 10/4/06 WSJ features an article on the Logan , Renault’s surprise hit simple auto.  The Logan is intentionally a plain jane 90 bhp, roll up the windows by hand, car.  It sold 145,000 copies last year not only in  Eastern Europe but in Western Europe as well.

My point is this.  In my lifetime it is amazing how many businesses let themselves go up market, forgetting their original base, and then allow someone to come in underneath them. For example. in discount retailing we have gone from Sears to Woolco to K Mart to Wal Mart and then when no one thought anyone had a better idea, Dollar General.  Pizza chains are much the same. Pizza Hut gave way to Domino’s to Papa John’s and now Little Caesar’s holds sway on the bottom rung.  Toyota’s first big success was a 1972 Logan called the Corolla.  Toyota still makes the Corolla but it’s all gussied up with power this and that.  The emerging markets for cars are in countries where folks are moving from motorcycles and bicycles to cars-Eastern Europe and India for example. 

I was at the career fair at University of Dallas this week.  Interestingly there was company in the fast food business I was unfamiliar with.  Check out Cane’s .  Their simple concept is cooking chicken finger meals.  The guy with the concept was told it would never work.  Ten years later and with fifty stores that seem to succeed around college campuses, they are on campus recruiting. 

There is a lot to be said for simple. The Model T, the Model A, the Logan, the iPod, the slide rule,
sandals, Wal Mart, Whataburger, bicycles,   enduring designs that work.  Can you think of a simpler way to do something, hey you might be on to an entrepreneur idea.

DLE

Looking back is not much help in predicting trends.  Just take a look at the stock price chart of GE, MSFT, or DELL, yesterday’s winners are not on today’s tout sheet, oops, I left out WMT. 

Here are a couple of sites to check out for something different.

Fast Company  is a forward looking magazine that puts most of its content online.  I think you will find their outlook prospective, forward looking and unlike the typical mass market mag.  Oh, remember my recent posts about design, notice how much of Fast Company’s web page is devoted to discussing the importance of design.

Inc  is published by the same company but focuses on the entrepreneur.  One criticism of college is that it is more focused on training one to work for someone else than to go into business for one’s self.  So check this one out.

There are chapters on the cash flow statement in every course I am teaching this semester.  And yep, there is nothing more important than cash, just ask Ford or GM that are losing money and burning through their cash hoard.  Will they downsize in time to avoid running out of money?  Gee, Ford dropped its dividend altogether last week.  The dot.coms had a burn rate, the total money the raised divided by their loss per month projected how long they would be in business, and sure enough most are gone now.

Take a read on how new software is helping entrepreneurs better manage cash.

DLE

Santa knows who’s been naughty and nice, in the case of the famous Neiman Marcus Christmas Wish Book, let’s hope you have been nice.  Yep, click on the hyperlink for a view of what outrageous gifts N/M is offering this year.

What’s my point?  Well, what does N/M hope to accomplish with outlandish gifts like a multi million dollar civilian space flight?  Will it sell?  Does it matter?

Here is the perfect blend of accounting management and marketing, or as Stanley Marcus would observe, Minding the Store.  N/M re establishes itself as the premier market for exclusive gifts with things like the $139K BM convertible, and the fact that it will sell out in an hour, only 50 copies, quick grab the phone, speaks to the exclusivity it brings the buyer.  Indeed, N/M puts the Christmas Book

online now so that those of us outside Highland Park can salivate too.

So what does it cost N/M to do this?

Gee do you think it’s worth it?

I had a friend who manufactured monogrammed billiard balls for this catalog, why have an ordinary set when N/M is available?

Just another example of trying to put cost accounting in perspective.

DLE

IN the cost class in Chapters 5-6 we will be studying break even and cost volume profit analysis.  Nowhere is this a more interesting consideration than in movie making.  One is constantly battling the cost of the movie production to obtain a realistic depiction of fiction, while balancing that with the need to make a profit on the movie.  And today there are more considerations, such as, if we don’t make it at  the box office, how well will the DVD and home rentals do?

No one has been more successful at making money on a budget than Clint Eastwood. His new film,
Flags of Our Fathers , tells three different stories.  One is the story of the invasion of Iwo Jima, a second is how the ‘heroes’ of that invasion are used to sell War Bonds to the country, and of the author’s discovery of his father’s role in the war.  Eastwood’s interest led to a second movie which may be even more interesting, the story of Iwo Jima from the Japanese point of view.

Eastwood, known for economy in film making, spent $90 M  on Flags and $20 M on Letters from Iwo Jima.  Click on the link above to read about this, very interesting.  Also remember my previous post about Talent Management.  Eastwood is known for using the same crew as they know what he wants in a movie. Moreover, Malpaso has as its moniker, only using tightly budgeted scripts  to minimize costs as well as preferring location over studio shooting.  Think about this story versus the often cost overruns in Hollywood. 

Gee would you have thought of Clint Eastwood as a cost accountant?

DLE

Have you been surfing Helpful Websites?  That would be the list of links I posted on WEB CT for you?  Well, take a look at what the big accounting firms do, you will be surprised, there is a lot more going on than just accounting. For example, did you know the big firms are involved in Human Resources?  Check out this article on Talent Management  at the Deloitte site.  What you have not heard about Talent Mgt?  Seems the oil and gas industry is running on empty talent wise, no wonder all they have done is fire people for the last twenty years.

Okay here is an accounting question, is talent reflected on the balance sheet?  Where would we look to see the value we ascribe to our human resource pool?  For example, during the 1930s the movie studios dominated the talent scene by controlling film making and distrubution.  MGM used to advertise that they had ‘All the Stars in the Heavens’ which meant they had signed Clark Gable, etc.  Did their balance sheet reflect this?  Clint Eastwood’s production company is Malpaso . Does it reflect a value for Clint?  Sorry, Clint is not a public company so I can’t link to that statement!

Log on and let us know your thoughts.

Raindrops on roses and whiskers on kittens
Birght copper kettles and warm woolen mittens
Bown paper packages tied up with strings
These are a few of my favorite things
From the Sound of Music

So what are your favorite things?  They probably do not include a spreadsheet or number crunching, but they might include the way the keys feel on your keyboard or your favorite sunglasses or the way your digital camera cradles in your hand or the just right fit of your favorite jacket or blouse.  Well that is what design is all about.

I believe design is coming front and center stage.  Read When MBA Meets Designer  to get a feel what I am talking about.  It is my belief that we should be emphasizing design as part of our basic curriculum here at UNT Dalllas.  What do you think?   Sound off here at the blog!

Dennis Elam

Well not mine exactly but memory in general.  Many of you have never played a phonograph record, but that’s all we had for music the first 70 years of the 1900s.  Change is one thing, its first derivative, the speed of change, the rate at which change is happening, is accelerating. 

Consider that by the 1960s we had moved to from records to reel to reel tapes to 8 track tape cartridges .  While this didn’t store any more information, it was a lot handier and quickly appeared in automobiles. Cassettes  followed which allowed the tape to be wound tighter and one could record on them, something not possible on e tracks.  The ability to record what one wanted to hear caused a real boom in cassette decks which quickly appeared in both home and auto settings.  But again, while one could record more music, and they were and are available in different lengths, cassettes can hold;d up to 120 minutes of  music while CDs only do 80 minutes.  The music CD  took the quality of sound to a much higher level by going digital as opposed to the mechanical or analog signals on previous media.

The introduction of the magnetic disk or floppy drive really got things going.  Now information could be easily recorded and with the hard case 3.5 inch disk developed by Sony, easily moved.  As you can see reading these articles, much of this technology had been going on at the same time, such as the large laser disk for movies.   The 3.5 inch drive could hold 1.44 MB in its final design.   Iomega introduced the  Zip drive  which was expanded from 100 to 250 and 750 MB.  I have a shoe box full of 100 and 250 MB zips that a friend gave me this summer.  I thought that would be all the storage imaginable.

Whoops, now we have the USB flash drives as well as a host of memory cards, xD, sD, compact flash, and my smart media cards have already been eclipsed as not offering enough storage.  I saw a 2 gigabyte device this week for 45 bucks,

And now nanotechnology  is giving us miniature hard drives that plug into USB ports that hold 30 GBs of memory.

Okay, I assume more memory will be available in the near future.  What does that mean for your life and for business in general? What is the opportunity there that did not exist before?  Certainly storing movies and entertainment are obvious answers.  But so is storing encyclopedias and your entire college library.  The concept of a living family photo album comes to mind-why not do digital video or stills of family members overlaid with their comments about their lives?  Future generations could get to know ever so great granddad or grand mom in a way never before possible.  Is there a business possibility here?  Ditto for the family dog that could join in the fun, I mean my wife talks to the cats all the time!

Dennis Elam

Michelle responded to my comments about job mobility on 9/24/06.  We live in a very different country with a very different economy than Germany or France.  Check out the editorial, Liberal Europe on page A8 of Friday 9/30/06 WSJ. As Kaminski says, the battle is raging and the outcome is far from decided.  But France and Germany do not seem ready to give up their socialist utopia ideas yet, despite their high unemployment, lack of job growth, and growth of business in other lower tax environments, read East Europe.

That same page also contains an interview with Condi Rice and comments on conducting business in Palestine.