The World Will Be Short 18 Million Nurses by 2030

Photo of author
Written By Paul Park
Paul Park is an educator, founder of a school, lecturer, public speaker, and writer.

The estimated healthcare worker shortage projection:

 short 18 million by 2030.

  • The world continues to vary in its measures (see Shanghai, Apr 2022) to contain the covid-19 virus and simultaneously, fear.
  • One out of eight nurses works in a country outside of their home country. In the United States of America, with a population of 331,002,647 as of 2020, has a total expenditure on healthcare per capita of $9,403 (2014).
  • According to the most recent World Health Organization nursing report, investment in education, jobs and leadership are part of key action steps in creating a workforce of nurses.
  • Many nurses holding faculty positions have inadequate clinical experience. The lack of clinically qualified faculty to teach in both undergraduate and graduate programs has been a serious problem in nursing institutions (Lu, 2004; Turale, Ito, & Nakao, 2008).
  • Ultimately, with the baby boomer generation reaching a critical mass in line with the life expectancy at birth of 78.5 years as of 2019, a shortage of 18,000,000 nursing personnel seems to be pretty relevant.

 

 

Introduction & A Nurse’s Choice


In the third year of our global pandemic, one wonders where the next nurse is going to come from. Who will be taking care of us,

                                                                                                             our loved ones,

                                                                                                                         or someone who’s going to change the future?

When one looks into the varying strategization methodology of governmental agencies worldwide, the measures represent a level of intricacy that, if applied correctly to the state of the shortage of across both hemispheres, there would be no shortage.

Through cross-referencing (1) the state of aging baby boomers, (2) average life expectancy in the United States of America, and (3) the ratio of nurses to other medical practitioners in their respective projected retirement dates, this writer sees a story in the choice presented to a young man or woman, growing up rurally: to survive in whatever mode/path available to them or to go into medicine and the care of our people and communities.

 

The English Barrier of Entry


Language barriers that may lead to errors may hinder the delivery of appropriate healthcare services and even result in life-threatening consequences for patients. For example, when a diabetic patient’s diet order has been written as “sugar free,” a non-English speaking nurse may interpret this to mean the “free use of sugar.” Such an interpretation could result in the patient experiencing a dangerously high level of sugar in the blood.

Increased migration of nurses to other countries, increased international travel, and the increased mobility of global epidemics have made competency in English a necessity. In addition, nurses enrolled in CNS, NP, master’s, or doctoral programs rely mainly on English language textbooks and research databases to keep abreast of the growing international body of nursing knowledge.

Opportunities for career growth may be restricted for nurses with limited English-language proficiency. A greater emphasis on helping nursing students master the English language is needed. Nonetheless, with growing online learning resources and management systems for education, opportunities to train and send a nurse only realistically requires approximately 500 hours of nursing training for the first level of certification for live-in aid, and another 400 hours from zero English proficiency to a score of 4.0/9.0 on the International English Language Testing System (IELTS).


Nurses Outnumber Every Other Medical Personnel Category…And They’re Getting Old

 



With the very handy National Health Workforce Accounts Data Portal, seen in the large black bar, exists a 5:1 ratio in the number of nurses compared to medical doctors, nursing personnel, dentists, pharmacists, medical and Pathology Laboratory scientists, Physiotherapy Technicians and assistants, dietitians, and ambulance workers.

They outnumber every other medical professional. Five to one.

The data depicts a clear majority in the medical and hospital systems in each and every country. Not only that, the baby boomer generation needs care. And, as they age, the nursing workforce gets older with them. The most experienced, knowledgeable advanced nursing practitioners are aging out of our medical care systems.

Why not focus on the biggest group that cleans bedpans, makes sure people get their meds, and makes sure every infrastructural duties is fulfilled?


The Nursing Industry Overview


Differentiation in nursing practice based upon levels of education, experience, and competency helps to define the structure and roles of professional nurses (AACN, 1995). Differentiation criteria will continue to be established as the healthcare system demands higher levels of abilities and competencies from nurses. Future career pathways for nurses will occur as nurses more clearly define their identity, increase their skills, and adapt to new work environments. Nurses have always been a resilient group, able to respond to challenges proactively, to create new and exciting opportunities.

Greater emphasis on providing culturally competent care is needed to ensure that nurses are prepared to work in a multicultural world. Although the number of foreign workers, including professional and technical personnel as well as labor and unskilled workers, nurses remain ill prepared to offer culturally competent care to patients from different cultural and ethnic backgrounds. The nursing curricula in each of these countries provides only limited, if any, culturally specific content to guide nurses in caring for patients from cultures different from their own. Nurses’ overlooking of cultural implications of care can result in patients experiencing misunderstanding, mistreatment, or marginalization, all of which can impede their recovery. 

Although the goal of a stable nursing workforce remains elusive. As the debate continues whether multiple entry points for nursing education and licensing is compatible with today’s healthcare needs, more employers are showing a preference for BSN-prepared nurses. As universities expand nursing programs and increase the number and quality of nursing graduates, the BSN degree is a standard.

The rapid expansion of APN, master’s, and doctoral nursing programs in each country. Such programs benefit the nursing profession by increasing the supply of advanced nursing specialists and faculty, generating research-related activity, and equipping nurses with higher levels of clinical expertise and leadership skills.

 

Career Development Opportunities


Each young lady or potential nursing candidate in SE Asia with very limited funds and education may choose amongst a wide range of entry-level jobs. While progression along these career development paths has potential, certifications and career pathways are significantly more accurately defined in nursing. A person could essentially train for 500 hours and learn English to gain employment as a live-in caregiver, returning in two years with approximately $70,000. During their employment, a nurse could engage in additional certification programs and research, combined with obtaining either their bachelor’s or master’s degree in nursing (online and clinically). A potential candidate pool of 1,000 fresh trainees could, within eight years’ time, net ONE advanced nursing practitioner (APN).

Unfortunately, eight years is exactly the timeline projected by the World Health Organization (WHO).

Types of Nurses

Certified Nurse Assistant (CNA).

Median annual salary (2020)1: $30,830
Projected employment growth (2020–2030)1: 8%

Licensed practical nurse (LPN).

Median annual salary (2020): $48,820
Projected employment growth (2020–2030)1: 9%

Registered nurse (RN).

Median annual salary (2020): $75,330
Projected employment growth (2020–2030)1: 9%

Advanced practice registered nurses (APRNs).

Median annual salary (2020): $117,670-117,670
Projected employment growth (2020-2030)1: 45%

Caregiver | Home Health Aide (HHA) | First Aid and Emergency Care | Hospice, Palliative, And End-Of-Life Care

Median annual salary (2022): $23,238-$36,560


Barriers of Entry and Circumstance


Due to a lack of physicians, there is a crucial need for advanced practice nurses to work in primary care settings, especially those located in the rural parts of the country. Nurses in rural practice must face many challenges, such as geographical isolation and limited resources which make it difficult to attract nursing professionals to work in rural healthcare delivery (Chin Limprasert, n.d.).

Additionally, nursing programs in these countries depend too heavily on the use of non-nursing clinical faculty who teach nursing content from a non-nursing perspective. Students may be taught, both in the classroom and in the clinical setting, from a biomedical standpoint, rather than from a nursing perspective. The use of physicians to teach undergraduate and graduate nursing courses is still common today, especially in Japan and Taiwan. Many teaching hospitals and universities prefer that physicians teach nursing courses due to their perceived greater technical and clinical expertise. A shortage of qualified nursing faculty results in this continued reliance on physicians to teach in nursing programs. Qualified nursing faculty are needed to develop and guide nursing students to fulfill their role as professional nurses, thereby empowering nurses with greater autonomy and control over nursing practice.

 

Abridged WHO Nursing Report


Nurses are critical to deliver on the promise of “leaving no one behind” and the global effort to achieve the Sustainable Development Goals (SDGs). They make a central contribution to national and global targets related to a range of health priorities, including universal health coverage, mental health and noncommunicable diseases, emergency preparedness and response, patient safety, and the delivery of integrated, people-centered care.

The nursing workforce is expanding in size and professional scope. However, the expansion is not equitable, is insufficient to meet rising demand, and is leaving some populations behind.

191 countries provided data for this report, an all-time high and a 53% increase compared to 2018 data availability. Around 80% of countries reported on 15 indicators or more. However, there are significant gaps in data on education capacity, financing, salary and wages, and health labor market flows. This impedes the ability to conduct health labor market analyses that will inform nursing workforce policy and investment decisions.

The global nursing workforce is 27.9 million, of which 19.3 million are professional nurses. This indicates an increase of 4.7 million in the total stock over the period 2013–2018, and confirms that nursing is the largest occupational group in the health sector, accounting for approximately 59% of the health professions. The 27.9 million nursing personnel include 19.3 million (69%) professional nurses, 6.0 million (22%) associate professional nurses and 2.6 million (9%) who are not classified either way.

The world does not have a global nursing workforce commensurate with the universal health coverage and SDG targets. Over 80% of the world’s nurses are found in countries that account for half of the world’s population. The global shortage of nurses, estimated to be 6.6 million in 2016, had decreased slightly to 5.9 million nurses in 2018. An estimated 5.3 million (89%) of that shortage is concentrated in low- and lower middle-income countries, where the growth in the number of nurses is barely keeping pace with population growth, improving only marginally the nurse-to-population density levels.

Aging health workforce patterns in some regions threaten the stability of the nursing stock. Globally, the nursing workforce is relatively young, but there are disparities across regions, with substantially older age structures in the American and European regions. Countries with lower numbers of early career nurses (aged under 35 years) as a proportion of those approaching retirement (aged 55 years and over) will have to increase graduate numbers and strengthen retention packages to maintain access to health services. Countries with a young nursing workforce should enhance their equitable distribution across the country.


Relative proportions of nurses aged over 55 years and below 35 years (selected countries)
Percentage of nurses less than 35 years
Percentage of nurses aged 55+ years
18 countries at risk of an aging workforce


The majority of countries (152 out of 157 responding; 97%) reported that the minimum duration for nurse education is a three-year program.

A large majority of countries reported standards for education content and duration (91%), accreditation mechanisms (89%), national standards for faculty qualifications (77%) and inter-professional education (67%).

However, less is known about the effectiveness of these policies and mechanisms. Further, there is still considerable variety in the minimum education and training levels of nurses, alongside capacity constraints such as faculty shortages, infrastructure limitations and the availability of clinical placement sites. The duration of nursing education is predominantly three or four years globally. A total of 78 countries (53% of those providing a response) reported having advanced practice roles for nurses. There is strong evidence that advanced practice nurses can increase access to primary health care in rural communities and address disparities in access to care for vulnerable populations in urban settings. Nurses at all levels, when enabled and supported to work to the full scope of their education and training, can provide effective primary and preventive health care, amongst many other health services that are instrumental to achieving universal health coverage.

One nurse out of every eight practices in a country other than the one where they were born or trained. The international mobility of the nursing workforce is increasing. While the patterns are evolving, equitable distribution and retention of nurses is a near-universal challenge.

1. Countries should strengthen capacity for health workforce data collection, analysis and use.

Actions required include accelerating the implementation of National Health Workforce Accounts and using the data for health labor market analyses to guide policy development and investment decisions.

2. Collation of nursing data will require participation across government bodies, as well as engagement of key stakeholders such as the regulatory councils, nursing education institutions, health service providers and professional associations.

3. Nurse mobility and migration must be effectively monitored and responsibly and ethically managed.

Actions needed include reinforcement of the implementation of the WHO Global Code of Practice on the International Recruitment of Health Personnel by countries, recruiters and international stakeholders.

Partnerships and collaboration with regulatory bodies, health workforce information systems, employers, government ministries and other stakeholders can improve the ability to monitor, govern and regulate international nurse mobility.

3. Countries that are over reliant on migrant nurses should aim towards greater self-sufficiency by investing more in domestic production of nurses.

4. Countries experiencing excessive losses of their nursing workforce through out-migration should consider mitigating measures and retention packages, such as improving salaries (and pay equity) and working conditions, creating professional development opportunities, and allowing nurses to work to their full scope of education and training.

5. Nurse education and training programs must graduate nurses who drive progress in primary health care and universal health coverage. Actions include investment in nursing faculty, availability of clinical placement sites and accessibility of programs offered to attract a diverse student body.

6. Nursing should emerge as a career choice grounded in science, technology, teamwork and health equity. Government chief nurses and other national stakeholders can lead national dialogue on the appropriate entry-level and specialization programs for nurses to ensure there is adequate supply to meet health system demand for graduates.

7. Curricula must be aligned with national health priorities as well as emerging global issues to prepare nurses to work effectively in inter-professional teams and maximize graduate competencies in health technology.

8. Nursing leadership and governance is critical to nursing workforce strengthening. Actions include establishing and supporting the role of a senior nurse in the government responsible for strengthening the national nursing workforce and contributing to health policy decisions.

9. Government chief nurses should drive efforts to strengthen nursing workforce data and lead policy dialogue that results in evidenced-based decision-making on investment in the nursing workforce. Leadership programs should be in place or organized to nurture leadership development in young nurses. Fragile and conflict-affected settings will typically require a particular focus in order to (re)build the institutional foundations and individual capacity for effective nursing workforce governance and stewardship.

10. Planners and regulators should optimize the contributions of nursing practice. Actions include ensuring that nurses in primary health care teams are working to their full scope of practice. Effective nurse-led models of care should be expanded when appropriate to meet population health needs and improve access to primary health care, including a growing demand related to noncommunicable diseases and the integration of health and social care.

11. Workplace policies must address the issues known to impact nurse retention in practice settings; this includes the support required for nurse-led models of care and advanced practice roles, leveraging opportunities arising from digital health technology and taking into account aging patterns within the nursing workforce.

12. Policy-makers, employers and regulators should coordinate actions in support of decent work. Countries must provide an enabling environment for nursing practice to improve attraction, deployment, retention and motivation of the nursing workforce. Adequate staffing levels and workplace and occupational health and safety must be prioritized and enforced, with special efforts paid to nurses operating in fragile, conflict-affected and vulnerable settings.

13. Remuneration should be fair and adequate to attract, retain and motivate nurses.

14. Further, countries should prioritize and enforce policies to address and respond to sexual harassment, violence and discrimination within nursing. [And, with Zoom surveillance measures with IOT.]

15. Countries should deliberately plan for gender-sensitive nursing workforce policies. Actions include implementing an equitable and gender-neutral system of remuneration among health workers, and ensuring that policies and laws addressing the gender pay gap apply to the private sector as well. Gender considerations should inform nursing policies across the education, practice, regulatory and leadership functions, taking account of the fact that the nursing workforce is still predominantly female.

16. Policy considerations should include enabling work environments for women, for example through flexible and manageable working hours that accommodate the changing needs of nurses as women, and gender-transformative leadership development opportunities for women in the nursing workforce.

 

17. National governments, with support where relevant from their domestic and international partners, should catalyse and lead an acceleration of efforts to: build leadership, stewardship and management capacity for the nursing workforce to advance the relevant education, health, employment and gender agendas; optimize return on current investments in nursing through adoption of required policy options in education, decent work, fair remuneration, deployment, practice, productivity, regulation and retention of the nursing workforce; accelerate and sustain additional investment in nursing education, skills and jobs.

Actions include intersectoral dialogue led by ministries of health and government chief nurses, and engaging other relevant ministries (such as education, immigration, finance, labor) and stakeholders from the public and private sectors.


Investment in Education, Jobs and Leadership

 

A key element is to strengthen capacity for effective public policy stewardship so that private sector investments, educational capacity and nurses’ roles in health service provision can be optimized and aligned to public policy goals.

Professional nursing associations, education institutions and educators, nursing regulatory bodies and unions, nursing student and youth groups, grass-roots groups, and global campaigns are valuable contributors to strengthening the role of nursing in care teams working to achieve the population’s health priorities.

The investments required will necessitate additional financial resources. If these are made available, the returns for societies and economies can be measured in terms of improved health outcomes for billions of people, creation of millions of qualified employment opportunities, particularly for women and young people, and enhanced global health security. The case for investing in nursing education, jobs and leadership is clear: relevant stakeholders must commit to action.

World Health Organization (WHO)


Conclusion


Let’s train, send, and protect nurses.

18 million to go. 8.75 years.

A ton are retiring.

 

Latest Posts
November 30, 2022Business / Finance / InvestmentThe game Monopoly by Hasbros, Inc. was a simple real estate board game in which players bought and sold property cards. The underlying economic principles of finance behind the game represented simple truths about how to invest successfully. You could only leverage in ONE LAYER by mortgaging your properties. For debt or incurred expenses, players could leverage their properties and receive a small mortgage loan from the bank. There was only one currency and its value was fixed. Like the fundamental concept behind blockchain-based money (cryptocurrency), there was always a finite amount. Investors/players generated cash flow to develop their investments and were limited by a finite set of rules. Monopoly represented a purer, safer time. Monology games at my house could last hours. If we took a break, we carefully tabulated everyone’s cash and assets on a trusty piece of paper. Upon our return, everything remained the same: all values were set and all assets clearly identified. Unfortunately, the real world is a bit more complicated. Let’s say we’re playing a game of Monopoly with Sam Bankman-Fried and his cabal of cohorts. On one side, you start off with the same amount of funds that anyone else does, a fixed amount. You roll and go through life, earning income as you pass ‘Go’. As time goes, you accumulate enough from your income to invest in properties to rent out to other passerbys — other players in the economy. You may make savvy choices or develop a key area so that when players roll and land on your properties, you’re earning. On the other side, you’re confronted with a team with the capability to move billions of dollars in seconds, changing the value of any currency they offer you. They say, “if you give us your Monopoly money (your hard-earned cash), we’ll give you BTC, ETH, and FTT. Not only that, you can leverage your assets with us to gain more FTT and access to every cryptocurrency we can get our hands on.” This is when historically — if you’ve played Monopoly — you catch a player sneaking a $500-orange-bill out of the bank. Only this time, your Monopoly opponent, the team of coders liberally using prescription drugs based in the Bahamas, says, “Hey, I’m the bank. Oh, I’m the realtor too. Oh, I’m the money printer as well. Huh? An accountant? What’s that?” So, you blink casually, then you roll the dice, landing on Boardwalk. Now, in the game, Boardwalk and Park Place are a set of the most valued properties on the Monopoly map. The purchase of Boardwalk costs you $400 in Monopoly money. SBF You hand over $400 to the Afro’d-out MIT grad in front of you (Sam Bankman-Fried) and he says, “Okay, now, instead of giving you the deed to Boardwalk, which I am legally mandated to by the rules of this game, I’m not going to do that.” “Instead, I’ll give you $200 dollars worth of FTT and $200 dollars worth of the down payment to Park Place in BTC. You can get rich too! Look at me! I am a philanthropist and math-whiz kid. I attest to being a classical utilitarian who seeks pleasure only, and no pain. If you invest with me, we’ll help human society for the betterment of all people because cryptocurrency is the way.” (SBF then casually palms your $400 dollars and sends it on its merry way to another bank with even more money — in return, he’s provided with options for glory in the case that bitcoin value just so happens to hit $100,000). Returning to you, he smiles satisfactorily and reports, “Now, if my company does well in the future and by owning stock in our company in the form of a token, you’ll be rich!! To the moon APES!” This is complete horseshit. Changpeng Zhao, now known as “CZ” in the crypto world, recently offered to step in to save FTX’s insolvency issues, but after looking at a gaping hole in FTX’s shotty accounting documentation, withdrew, tweeting as he backpedaled: Two big lessons:  1: Never use a token you created as collateral.  2: Don’t borrow if you run a crypto business. Don’t use capital “efficiently”. Have a large reserve. Binance has never used BNB for collateral, and we have never taken on debt. Changpeng Zhao, CZ on FTX takeaways, the founder of Binance Holdings Ltd., the largest crypto exchange today Real people who have red numbers glaring at them from the FTX app and potentially across the graveyard of 130+ other bankruptcies will be lucky to receive five cents on the dollar. Move Forward, Enron Champion In the official FTX Trading LTD., et al., Chapter 11 bankruptcy filing affidavit, John J. Ray III begins the monumental task of restructuring FTX. Having restructured Enron, and with mass media denoting the FTX implosion as “worse than Enron,” John J. Ray III has zero confidence in any balance sheet that’s been touched by the inner circle of FTX’s once 200+ strong employee base. Essentially, Ray sees SBF and his gang of children as grossly incompetent in spearheading what was supposed to be a reliable institution as people explore new investment options in cryptocurrency. “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad to the concentration of control in the hands of a very small group of inexperienced, unsophisticated, and potentially compromised individuals, this situation is unprecedented.” John J. Ray III, the Winston Wolfe of Financial Ruin With modern macroeconomics subject to giant Ponzi schemes, real people lose out. “Some employees kept their life savings on FTX,” an anonymous FTX employee told CoinDesk. “We trusted that everything was fine.” Here are Jon Wu’s and Trung Phan‘s bullet points on the FTX implosion: No corporate governance (Many entities, for example, never had board meetings. The FTX Group did not maintain centralized control of its cash. They didn’t even keep a running list of all their bank accounts!) No functioning HR (The entire FTX Group didn’t have any employee management whatsoever and was incapable of furnishing: 1) a list of employees; 2) the terms of their agreements; and 3) each employee’s status) No functioning money management (Employees were paid via online chat, and managers “approved disbursements by responding with personalized emojis.” Meanwhile, SBF took a $1B personal loan.) High level of secrecy (SBF used Signal to hide all of his decisions and communications with employees. Also, he created a “back door” to move funds between FTX and FTX’s sister hedge fund Alameda Research without alerting his auditor) SBF says that FTX customer deposits were mismanaged due to “messy accounting”. Per SBF, customers sent money to FTX and sometimes it just went straight to Alameda Research; it’s either gross incompetence or straight-up fraud — either way, it’s illegal. SBF says that one motivation for his virtue-signaling — like his association with effective altruism — is because “woke westerners” have to “say all the right shibboleths…so everyone likes us…” Here’s Milky Egg’s estimate on how FTX lost $15.5B — the largest and fastest wealth-wipeout in history. $1.5B: Over the summer, FTX bailed out crypto lenders (Voyager/BlockFi) that were hurt hard by a big crypto sell off. FTX did the bailout in part to save its own hedge fund — Alameda Research — which had exposure. $1B: Terra Luna blew up after its algorithmic stablecoin failed. FTX had exposure. $1B: Other algorithmic stablecoin crashes. $2B: Funds spent as collateral support for two FTX-backed tokens (Serum, FTT) $2B: A string of VC investments (a lot of overpaying at the top of the cycle) $2B: Real estate, branding, other frivolous spending (eg. Larry David Super Bowl ad, naming the Miami Heat arena) $4B: The market cap of FTX exchange token FTT declining. $2B: Bad crypto bets. Reported early on as a “hack”, $477m of customer deposits went missing in FTX’s convoluted balance sheets. Interestingly enough, Sam Bankman-Fried had built a backdoor into accounting using Bespoke programming and was able to edit balance sheets without alerting auditors (Reuters, 2022). In the end, it was the Bahaman government forcing FTX to take the customer deposits so that the government could seize them. Subsequently, jurisdiction on who those funds belong to or even where they’ll be held remains murky as hell. Extras For a full reading, see the FTX Chapter 11 affidavit. For Jon Wu’s excellent summary, see Twitter. For the full financial breakdown by one of the greatest finance writers on the planet, see Matt Levine‘s work, FTX Had a Death Spiral. Here’s a must-read on Coindesk and the FTX Bahamas situation & hearsay at the FTX Bahaman compound. The most recent SBF biography. Check out how Farmington State Bank became Moonstone with an 11.5m-dollar investment into what once was America’s 26th smallest bank. FDIC’s valuation of Farmington State Bank before Sam’s investment = $5.7m. [...]
November 30, 2022Business / Case Studies / Culture / FinanceDen Fujita wearing his signature safety helmet, 1986 McDonald’s is one of the largest fast-food chains in the world due to its sheer size, significance, and popularity. Its success as a global brand and an economic powerhouse stemmed from its commercial success over half a century ago. After 1940, when the McDonald brothers formed the company, the franchise began its steady growth with its Speedee Service System, opening outlets across the United States. Ray Kroc bought out the Mcdonald brothers in 1961 — with a cool $1 million dollars for each brother. As CEO of McDonald’s between 1967 and 1973, his policies expanded the business internationally due to its economic opportunities and growing publicity. After the first venue opened in Canada in June 1967, McDonald’s began its rapid growth through franchising with an insightful partner local to the country. Japan opened its first McDonald’s location, which is the first Asia outlet, on July 21st, 1971 by none other than Den Fujita (藤田 田), a prominent Osakan businessman. Den Fujita was responsible for the founding of McDonald’s Japan, Fujita & Company Ltd., SoftBank, and Toy “R” Us Japan. Because of his contribution to the company, McDonald’s became a household name in Japan, generating approximately $2.8 billion today. How Fujita was Fujita Table of Contents How Fujita was FujitaFujita & CompanyFrom a Small Fry to Big FriesMcDonald’s: the Square Peg in a Round HoleMakudonarudo: the Round Peg in the Round HoleWhen in Japan, Do as the Jewish DoBehind the Face of McDonald’s JapanSide HustlesDen Fujita and Toys “R” UsRetirement, Death, and Legacy Faculty of Law, University of Tokyo On the 3rd of March, 1926, Den Fujita was born to an affluent family in Osaka. He had a father, an engineer at a British company, who taught him English, his second language. During the bombing raids of WWII, one-third of Osaka was destroyed. The Fujita home was destroyed — Den Fujita’s father and his two sisters perished. As a devout Methodist, Den Fujita’s path out of despair was in building a church, something her church had never had. After the end of the war, she succeeded in her quest and inspired Fujita to never give in to despair. Heeding her advice, Fujita became an outstanding student in his year and managed to be accepted into the Faculty of Law at the most prestigious university in Japan, the University of Tokyo. During his university years, he discovered that one of the highest-paying occupations was working as an English translator for American soldiers stationed in Japan. As a bilingual, Fujita climbed the ranks until he was positioned in General MacArthur’s headquarters, otherwise known as GHQ, in downtown Tokyo. Den Fujita completed his education at the University of Tokyo’s law school in 1951. Fujita & Company When the United States occupied Japan for democratization, almost every commodity was rationed to citizens, and imports were highly regulated, resulting in massive demands for luxury goods and little competition. Noticing opportunity in the midst of regulation, Fujita began selling his wares to American soldiers and established Fujita & Company, an independent trading company, in 1950 (even before graduating from UTokyo). Unlike his classmates, who mostly became bureaucrats or businessmen, Fujita became a full-time entrepreneur at his own company upon graduation. He believed that postwar Japan’s culture and products were obsolete compared to western countries such as America. As a result, Fujita & Company was focused on imported luxury goods, especially women’s clothing and accessories. Fujita & Company became a pioneering importer and wholesaler of nonessential products for the entire island nation of Japan. The company was the sole importer of Dior handbags and the biggest client in Dior’s history. In 1960, Fujita & Company reached ¥40 million, which is roughly $1.53 million today — with only 15 employees. From a Small Fry to Big Fries When Fujita was visiting the United States for a business meeting in 1967, he tried McDonald’s for the first time and loved it; he was amazed by the cleanliness and speediness of the service. When Fujita heard about McDonald’s expansion in Japan in 1970, he wanted in, so he began building connections with the company. Steven Barnes, a chairman of McDonald’s International, was traveling around Japan to interview candidates for the partnership for the company’s joint venture. With many competitors, composed of minor and major trading companies and magnates, it had seemed that Fujita’s chances were slim. Against all odds, Fujita was chosen by Barnes to be a partner. Barnes explained that Fujita’s sheer dedication and approachable personality were what made him the perfect associate, unlike other candidates who only saw the expansion as a business opportunity. In May of 1971, McDonald’s had invested $150,000 ($1.1 million in 2022) and Den Fujita contributed with a fresh Japanese bakery valued at $35,000. McDonald’s: the Square Peg in a Round Hole Starting the franchise in Japan was difficult due to the country’s massive cultural differences. Furthermore, no other international fast-food companies had ever opened in Japan or Asia for that matter, so Fujita had to start without a blueprint. The first order of business was to make McDonald’s appear to be Japanese to attract local customers. Fujita changed the name of the franchise — McDonald’s — to “Makudonarudo” to fit the Japanese dialect. Ronald McDonald, the company mascot became Donald McDonald. During Fujita’s meeting with McDonald’s executives at the company headquarters in Illinois, an argument broke out about the location of the first location. The executives proposed the US pattern, which is building stores in suburban areas as drive-thru services staked financial statements at the end of the fiscal year. However, Fujita reasoned that building outlets in dense areas would attract young pedestrians who were open to new concepts. Additionally, the outskirts of Tokyo would not be ideal as they were mostly populated by wealthy Japanese — the Japanese population who owned and drove cars in 1970s Japan. Fujita was interested in Ginza, a fancy shopping district and tourist attraction, as it was in Tokyo. He was able to partner with Mitsukoshi, one of Japan’s oldest department store franchises, because of their past relations with Fujita & Company; Fujita was given 500 square feet of space on the ground floor of their department store in Ginza, but he was given only 39 hours to build his restaurant. Fujita immediately got to work. Executives and Kroc visited the first Japanese Mcdonald’s, only to be greeted by construction. “We’re in big trouble. We’re opening in two days and nothing is there.” Ray Kroc By working ’round the clock, Fujita managed to open Japan’s first McDonald’s store on July 20th, 1971 — on time. Lines formed outside of the restaurant, even though the only method of advertising had been handing out leaflets. The locals loved it. Within a month, the international daily sales record was broken by the Tokyo-Ginza location, shocking everyone, including Kroc with its sales. Makudonarudo: the Round Peg in the Round Hole Teriyaki Chicken Filet-O Set, exclusive to Japan After the success of the first outlet, Fujita contributed to the rapid expansion throughout Tokyo, then the entirety of Japan. The second store, sitting nearby the ever-busy Shinjuku station, had opened three days after the first one, and another restaurant was ready a day later after the second opening. Prior to all of the openings in 1971, Fujia had established Hamburger University, a school that teaches staff managers and owner-operators to manage their restaurants. Later on in his career, Fujita planned new menus which incorporated local favorites into the meals, notably the rice dishes, and experimented with many menus to find the next Big Mac of Japan, for example, hot dogs, shrimp burgers, or fried chicken. He also decorated the stores to adopt an Americana design motif. In one instance, the new CEO, Fred Turner, was left baffled by how Fujita fashioned a location to look like a motorcycle gang hangout. Fujita realized that he didn’t have to change the whole Mcdonald’s model to be successful in Japan — he just had to alter the scene and adapt to Asian taste buds. When in Japan, Do as the Jewish Do Den Fujita brought American hamburgers and french fries to people who supposedly prefer rice. He brought large-scale discounting to people who were supposed to prefer high-priced neighborhood shops. When Japan’s exports were their bread and butter, Fujita was importing Dior, bringing luxury products to the hands of almost every upper-middle-class Japanese woman. During his employment as an interpreter in General Macarthur’s Headquarters, Den Fujita had interacted with a wide range of Jewish-American soldiers. Furthermore, decades prior in Osaka, the Jewish community had already established itself in local businesses. For Fujita, the Jewish community represented exceedingly talented entrepreneurs and the biggest players in international finance. With growing control in any market share, comes jealousy. Historic prejudice against Jews influenced Fujita to identify with the bias that some of the Jewish community had historically experienced. In Fujita’s case, regional discrimination between Osakans and Tokyoites existed in 1970s Japan. Fujita was regularly discriminated against for his Osakan accent. To boot, Fujita came from a wartorn household in a society where coming from an established family is incredibly important. To succeed, Fujita had hoped to integrate what he saw as the Jewish community’s successful working philosophies into his own business principles. Fujita wrote his first business autobiography book titled The Jewish Way of Doing Business in 1972. In its first month, more than 200,000 copies were sold, and its publisher had to reprint the book 63 times. Over its lifespan, The Jewish Way of Doing Business has been purchased over one million times. Later on, in his writing career, Fujita published seven more works, such as Stupid People Lose Money, How to Become Number One at Business, or How to Blow a Rich Man’s Bugle like the Jews Do. Later on, Fujita faced allegations about antisemitism tones (e.g. stereotyping Jews as business experts) in his writings, and he responded: “Please don’t misunderstand, I’m trying to do something good for the Jewish people. Most Jewish people speak two or three different languages. They’re good at mathematics. The Japanese should learn from that.”Den Fujita Behind the Face of McDonald’s Japan Den Fujita in his 60s Fujita was a unique CEO, relentlessly promoting McDonald’s on television by using unusual ways to convince watchers to eat at his restaurants. His advertisements were purposefully ridiculous and comedic to attract everyone’s attention. “The reason Japanese people are so short and have yellow skins is that they have eaten nothing but fish and rice for two thousand years…if we eat McDonald’s hamburgers and potatoes for a thousand years we will become taller, our skin become white, and our hair blonde.” Den Fujita Behind the scenes, Fujita was considered to be a tranquil family man. He was married to his wife, Etsuko, his high school crush. They had two sons named Gen and Kan, who later on worked in Fujita’s company. Fujita and his family lived peacefully in a small upper-class neighborhood, living simply. Even if he was the Dior baron of Japan, he usually sported a $6 Casio watch. Fujita was known to be very hardworking, toiling 12 hours a day and working from his car. Fujita also had an intense fear of earthquakes, which is the reason he always wore his iconic safety helmet and distributed them to his new employees. With Fujita’s heavy involvement with McDonald’s, the company blossomed into a fast-food giant in Japan. The first branch in 1971 generated ¥205 million ($4.3 million today). In 1980, the company profited ¥50 billion ($1 billion today). Roughly eleven years after its opening, McDonald’s became the largest fast-food franchise in Japan, surpassing the incumbent leaders, Yoshinoya, KFC, and Lotteria. Between 1971 and 1999, there were more than 3,000 establishments across Japan with two stores opening every week. In 2003, Fujita & Co., LTD reached a net worth of $1 billion. Side Hustles Masayoshi Son, founder and CEO of Softbank Masayoshi Son was a 16-year-old high schooler when Fujita was expanding Mcdonald’s throughout Japan. Masayoshi had called Fujita’s office frequently to schedule meetings with Fujita his requests were frequently denied by Fujita’s secretaries. As long-distance interviews were expensive, Son decided to fly over to Tokyo and walk into Fujita’s office unannounced. Masayoshi said to Fujita that he could continue working but, “I just wanted to see your face for three minutes.” Oddly enough, Fujita took up the offer. When Masayoshi found himself in Fujita’s office, he asked for advice on how he should pursue his career and what he should study for. Fujita replied: “Computers! Don’t look at the past, look at the future industries. The computer industry, that’s the one you should focus on.” Den Fujita’s advice to Masayoshi Son Inspired by practical advice from his new mentor, Masayoshi Son returned to the United States to complete his high school education within three weeks in Serramonte High, then on to graduate from the University of California, Berkeley, with a BA in economics and “promptly” moved back to Japan. On September 1981, Masayoshi Son established SoftBank Corp., a software distributor startup, which went on to become SoftBank Corp (SFTBY), with a market cap of $76.430 billion today, investing in 331 technical companies, such as NVIDIA, Bytedance, and Uber. Den Fujita served on the SoftBank board for many years. SoftBank Corp (SFTBY) SoftBank’s new headquarters, located at Minato City, Tokyo Den Fujita and Toys “R” Us As economic pressure built up between Japan and America, Japan finally opened up its borders to international companies, and Toy “R” Us, was seeking expansion in Japan. During the planning phase in 1981, the company directors were increasingly aware of Fujita’s impact on then-modern Japan. Eventually, Fujita was offered a position as a vice-chairman in 1989 by executives. After two years, the first Toys “R” Us Japanese branch was opened in the outskirts of Japan as a joint venture between Toy “R” Us and McDonald’s Japan, with McDonald’s taking 20% of the company’s profits. “To be honest with you, we’d followed him and knew about him. He was not only our first choice, but our second, third, fourth, fifth and so on. After our first meeting we felt even more so that he was the right partner. We could see that he was a bit of a maverick. He was not only bilingual, but bicultural. He saw the potential for our business there immediately. He shared our impatience for trying to get it growing.” Robert Nakasone, Vice Chairman of Toy “R” Us, on Fujita A Toy “R” Us outlet in Odaiba, Tokyo Retirement, Death, and Legacy Fujita retired from McDonald’s Japan on March 23rd, 2003, then passed away at the age of 78 due to heart disease on April 24th, 2004. Den Fujita left a legacy of revolutionary methodologies, changing the business climate of Japan. In 2022, Fujita & Company Ltd. still stands, generating ¥3.3 billion ($21 million) annually with a total of 29 employees in 2019. Fujita & Company Ltd. has expanded into real estate, other luxury goods, and sports equipment. In 1995, the company has also become an exclusive importer and wholesaler of Tie Rack Inc., the world’s largest necktie company. A modern McDonald’s restaurant in Japan Fujita’s biggest achievement, McDonald’s Japan, has become a household name, known almost everywhere across the country. Thus far, the franchise has generated $2.77 billion in 2022. In December 2021, over 2,300 employees worked at McDonald’s and more than 38,000 outlets were constructed. As McDonald’s and western influence grew more prominent, Japanese cuisine changed. With more Westerners living in Japan after WWII, ingredients that were not native to Japan were incorporated into Japanese cuisine, fusing Japanese and American cuisine. As Mcdonald’s was the first western fast-food chain to set foot in Japan, eating etiquette changed to be more akin to American customs: using hands instead of chopsticks to eat, sitting on chairs and tables instead of cushions and low tables, and eating in a sit-down restaurant for a quick bite. Would Mcdonald’s be what it is today without Den Fujita? [...]
November 20, 2022Case Studies♫ Take me to the riverrr. Drop me in the riverrr. ♫Big Mouth Billy Bass In the early 2000s, there were fads that managed to reach the spotlight and ultimately sink into obscurity — Tamagotchis, Webkinz plushies, or Furbies are prime examples of what toy manufacturers were trying to achieve: toys that sell all over the globe. In the early 2000s, the world was introduced to an unlikely celebrity, a robot fish. The Big Mouth Billy Bass basking in its glory. The Big Mouth Billy Bass is a mounted animatronic fish with a singing, soothing Southern voice, welcoming every passerby with songs. Made up of rubber latex and relatively simple, but revolutionary machinery, it was known for its silly antics, flopping around, bending its neck, and lip-syncing to Al Green’s Take Me to the River. KSFBunny – 620 subscribers – 1.7 million views With a catchy tune, the song lures in any unsuspecting passerby. At a key moment in the song, the robot fish looks you in the eye and requests that you take it to the river, wagging its tail to the rhythm. Big Mouth Billy Bass debuted in 1999, with the help of Joe Pellettieri, a prominent toy designer, and Gemmy Industries’ support. In its first year, Billy generated over $100 million in revenue. Humble Beginnings Table of Contents Humble BeginningsThe CastThe ReelThe CatchToday and Legacy Joe Pellettieri Despite Pellettieri’s relatively unknown early biography, after graduating from Indiana University with a Master of Business Administration, Pellettieri set out to work as a trader for many department stores in the United States, but he quit a decade later, citing that he “wanted to look for the next big thing.” In 1998, he found a new job in a small novelty toy business named Gemmy Industries. Gemmy Industries has come a long way since its founding in 1984. Surprisingly, its first product on the market was ballpoint pens. Later on in its lifespan, Gemmy offered many novelty items, especially toys, that “mirrored cultural trends in music and movies.” Dancing Hamsters, Frogz, or Douglas Fir the Talking Tree were what Gemmy Industries produced and sold on the market. Dancing Flowers, a product by Gemmy Industries During Pellettieri’s recruitment in Gemmy Industries, the company’s main product was Sunny the Singing Sunflower, a mechanical flower that sings and dances to You Are My Sunshine by Johnny Cash, but sales were dismal. Pellettieri suggested the designers not only have one, but multiple flowers dancing in a pot, creating Dancing Flowers. Pellettieri’s contribution to the company made him rise through the ranks, ending up as a VP of Gemmy Industries. Eventually, the Dancing Flowers’ popularity wilted away, and Pelletteri had to find the next big catch. The Cast A Bass Pro Shop location in Grapevine, Texas Great ideas can come from anywhere. There are no titles around an idea.Steve Stoute In the last few months of 1998, Pellettieri and his wife, Barbara, took a road trip throughout the United States. During their travels, the Pelletteris took a short pitstop nearby a Bass Pro Shop, an establishment known for its fishing gear and outdoor equipment, in Grapevine, Texas. Wandering through aisles, Barbara suggested Pellettieri suggested an idea: a singing fish on a plaque. It was hilarious. For comic effect, Pellettieri added that the fish should sing Take Me to the River by Al Green. But alas, Pellettieri could not let go of the singing fish. The novelty toy industry was and still is notorious for its unpredictability; nobody knows what will be the next big craze. Despite the high risks, Pellettieri continued onward with his purple cow idea, or rather a purple fish. Pellettieri’s motivation for the invention was from a book written by Seth Godin, a former e-commerce executive, titled Purple Cow: Transform Your Business by Being Remarkable. Within the book, Godin argued that in order to conquer the market, one must create a purple cow, a product out of the ordinary, to stand out from the rest in order to become iconized by consumers. Godin’s philosophy has been proven true by many toys of the 2000s, including Furby, Tickle Me Elmo, and Tamagotchis. On the contrary, other executives at Gemmy Industries “hated” the book, but Pellettieri remained set on getting the singing fish into the public spotlight. The first prototype of the Big Mouth Billy Bass After designing and working with his engineers at Gemmy Industries, Pellettieri refined his singing bass idea to become a reality. Its first prototype consisted of a bland fish on a wooden plaque, lip-syncing and shaking its fin to a tune. Despite the developments Pellettieri made, he considered his first model to be “horrible” as his customers were dissatisfied, but Pellettieri was determined to get the bass out of the water. In his later attempts, Pellettieri’s desire was to make the fish sing and dance as realistically as possible, prompting him to contact a taxidermist. The generic fish on the plaque was replaced by a largemouth bass as it was one of the most common game fish in the United States. Pellettieri also made an addition to the singing fish — a motion sensor. When someone happened to be passing by the plaque, the animatronics and song would begin, filling any passerby’s eyes and ears in a span of 5 seconds. In 1999, Pellettieri’s second prototype was finished, and he traveled across the globe to a showroom in Hong Kong, where he met local Gemmy Industries engineers. When Pellettieri was looking at the hanging fish in the showroom, he did not feel quite right. After sinking into his thoughts, Pelliterri asked the Hong Kongese engineers a simple query: could they make the fish turn its head? Even if today’s animatronics outshine Big Mouth Billy Bass, the mechanism behind the “flapping” was revolutionary to the world of animatronics. There were many vertical turning mechanisms done successfully by engineers before, however fluid horizontal turning was unprecedented. Against all odds, the engineers were able to allow the bass to turn its head. When Pellettieri’s customers waltzed into the showroom, they were encountered by a bass on a plaque, singing a silly tune, turning its head, and flopping its tail. They were captivated by its charm and unexpectedness. The Reel The inner animatronics of Big Mouth Billy Bass (poor guy) After the reveal in Hong Kong, Pellettieri flew back to Texas and began development on the final product, resulting in some changes. Firstly, the exterior of the singing fish was latex, but it was replaced by PVC materials as the latex scratches when it wears down over a period of time. The insides of the fish now were filled with foam to allow movement. Finally, the two iconic songs that the Big Mouth Billy Bass would sing were Al Green’s musical hit Take Me to the River and Bobby McFerrin’s Don’t Worry, Be Happy. The name Big Mouth Billy Bass was from a suggestion made by Gemmy Industries’ packaging department, and Pellitteri loved it. After more than a year-long development of Big Mouth Billy Bass, it was introduced to the public eye in 1999, with the Bass Pro Shops and Cracker Barrel as one of the first clients. The initial price of the fish was $29.95. Despite the massive craze, Big Mouth Billy Bass did not pay for advertising to get the word out into the world, only word of the mouth. The Catch Billy in his old days In the early years of the 2000s, the Big Mouth Billy Bass made its way to a gift show located in Atlanta, Georgia. When its debut was made to the open public, they were amazed. At first, the product was only sold at small novelty gift shops, with the reason to generate high demand by offering locations with a small supply of Big Mouth Billy Basses. During its peak, the businesses ran out of Billies in under an hour, causing a huge demand and generating free advertisements as rumors spread from scarcity. Later in Billy’s stardom, major retail chains, such as Walmart, Kmart, or Toy “R” Us, featured Big Mouth Billy Bass on their shelves nationwide. By Christmas, the Big Mouth Billy Bass had become a business marvel, making appearances everywhere in America; Billy appeared in homes, restaurants, and even concerts and talk shows. Even important figures in today’s society were involved. According to sources, Bill Clinton, the 42nd President of the United States, gifted Billy to his vice president, Albert Gore Jr. Even her majesty Queen Elizabeth owned one herself. In its first year, the Big Mouth Billy Bass reportedly generated over $100 million in revenue, which is approximately $173 million in November 2022 (just 22 years later with inflation). Al Green, the singer of Take Me to the River, even claimed that he earned more from royalties from Big Mouth Billy Bass than his music. Even if Billy became a nationwide celebrity singer, like many fads and trends, his fame was short-lived. After the fall of 2001, Big Mouth Billy Bass sales dropped drastically. The price of a Big Mouth Billy Bass was reduced to an average of $5. Finally, production of the Big Mouth Billy Bass ceased only 9 months after launch. After Billy’s disappearance, many imitators came out of the bushes, or rather the river, pushing Billy into obscurity. Today and Legacy Current Gemmy Industries logo Today, Gemmy Industries has come a long way from novelty gifts. The company became a major producer of seasonal decorations and gifts, such as LED Christmas lights, inflatable Halloween decorations, or themed plushies, in the United States. Joe Pellettieri remained a toy maker, but he relocated to other companies in 2010-2013. In May of 2013, Pellettieri found a position as a Vice President of Product Development at Occasions Limited, a seasonal and decorations company. While busy at his job, Pellettieri is active on Twitter, drafting many concepts for his toys. Guess who’s back After years of limbo, Billy managed to find himself in another spotlight with the help of others since his popularity subsided. In 2009, McDonald’s featured Big Mouthed Billy Bass in a commercial for McFillet. Seven years later, Brian Kane, a developer, hacked into Big Mouth Billy Bass’ system and connected it to Alexa, a virtual assistant made by Amazon. Kane has garnered more than 1.8 likes on Facebook since his post. Billy was also included in many beloved film franchises, for example, Wall-E, the Sopranos, and the Simpsons. Jeff Bezos, CEO of Amazon, announced in 2018 that he would begin selling Alexa-enabled Big Mouth Billy Basses for the market, allowing Billies to sing anything, tell the weather, or even interact with you. ♫ Don’t worry. Be happy. ♫Big Mouth Billy Bass [...]
October 12, 2022Case Studies / CultureA man working at Friendly Acres Farm, located in Cochecton, New York Ah, Christmas.  It is an unforgettable seasonal holiday celebrated annually on the 25th of December.  Merchandise in red and green, Christmas carols, family gatherings, and cheery decorations are the staples of the holiday season. However, these symbols cannot outshine the iconic Christmas tree and its ornaments. The Christmas tree has become iconic because of its rich history and the economy behind it. In the United States, there are around 25 to 30 million Christmas trees sold every year, accumulating over $27 million in profit with the average price of a tree at approximately $80 today. Currently, more than 350 million Christmas trees are growing in approximately 15,000 plantations across the United States. How is the Christmas Tree Christmas? Table of Contents How is the Christmas Tree Christmas?Evergrowing DemandTradition Meets ModernityThe Tree Today Saturnalia by Antoine Calle Before Christianity’s founding, evergreen trees were highly associated with winter in celebrations of numerous cultures during ancient times. Many of said festivals are related to the winter solstice, an event of the sun reaching its lowest in the sky as they believed that the sun gods became ill during winter, and celebrating him would help them recover. People decorated their homes with branches of evergreens to ward off witches, ghosts, evil spirits, and sickness.  Recreation of Martin Luther creating the first Christmas tree During the 16th Century, dedicated German Christians brought evergreen trees back to their homes and hung apples on them as they represented the Garden of Eden to celebrate the feast of Adam and Eve on the 24th of December. In a shortage of wood, people assembled pyramids of wood and adorned them with branches and candles. Reputedly, Martin Luther, a well-known German priest, originated the first Christmas tree when he attempted to recapture the beauty of the twinkling stars for his family by hanging candles on a fir. After three centuries, Christmas trees are a major tradition in Germany. During the same period, glass ornaments were invented by Hans Greiner and Christoph Muller. Engraving of the British royal family and their Christmas tree in 1848 As Germans emigrated, they spread the Christmas tree tradition to other European countries, most notably England. In the 1790s, Queen Charlotte, the German-born consort of King George III, introduced the Christmas tree to Britain at a children’s Christmas party, but it was the German-born Prince Albert and Queen Victoria who popularized the Christmas tree with a photo in 1848. The picture contained the royal family standing in front of the Christmas tree in Windsor Castle. London news reporters quickly picked up on the Christmas tree, sparking the trend. After the photo was released to the public, Christmas trees became a Christmas icon. Christmas trees were introduced to North America for the first time in 1781 during the invasion of Quebec by the Hessian mercenaries to boost their morale. In the early 19th century, the popularization of Christmas trees began in the United States by German immigrants to escape the failing economy and war. The first Christmas tree was hung in the 1830s by German settlers in Pennsylvania. During that time, Puritans were in control of the British colonies in North America, which resulted in many pagan symbols prohibited, including Christmas. This resulted in the outlawing of Christmas trees as many perceived it as “pagan mockery” that “defiled” Christmas. Many violators were penalized with heavy fines, and some were hanged. Nonetheless, the ban was lifted when the Puritans became a minority due to the growing German and Irish population. When Prince Albert and Queen Victoria released the photo, the popularity of the Christmas tree rose sharply. Evergrowing Demand Barclay Street in the 1910s before the construction of the World Trade Center To get a Christmas tree, families had to travel out to the middle of the woods, riding horses or carriages to get there, chop down the evergreen tree, load it up, and travel back to their homes. Most could not afford a horse or carriage or had the time and energy necessary to travel into the wilderness for the perfect tree. Seeing that the masses could not easily acquire the trees, Mark Carr, a New Yorker “woodsman,” took matters into his own hands. A few weeks before Christmas, Carr and his sons journeyed to the forests nearby the Catskill Mountains located in southeastern New York with an ox carriage. The family reportedly chopped down 24 evergreen trees and loaded them up the cart. They then hauled their wares to New York’s Washington Market located in lower Manhattan, purchased a stall, then stocked his store with Christmas trees. Many locals were thrilled that they don’t need to go out of town anymore and bought his product. Carr, seeing an opportunity to make it big, continued his business which continued until 1989. Inspired by Carr’s success, other farmers began selling their Christmas trees as market demand is high, and thus, the Christmas tree industry was born. In 1901, the first Christmas tree farm opened its doors in Trenton, New Jersey by W.V. McGalliad as he saw that Christmas trees grow well on his infertile farmland and overstocked trees can be converted into lumber. Furthermore, the Norway spruce had the right characteristics to appeal to customers. He planted 25,000 Norway spruces on his plantation and set the price of each tree at $1, which is the equivalent of almost $35 on October 2022. Other farms used evergreen species that have the desirable height, shape, needle, branch, and fragrance for the market, such as Douglas fir, Balsam fir, Scotch pine, and many others. Tradition Meets Modernity Advertisement for Edward H. Johnson’s Christmas lights Back in the day, many people hung homemade ornaments, for example, dyed popcorn, apples, nuts, or candles. Since there was a possibility of the tree catching fire due to the burning candle, Edward H. John, a New Yorker businessman, strived to solve the problem by inventing the first Christmas lights. Electricity was invented by Thomas Edison on October 1879, and he designed the world’s first electric Christmas lights in 1882. However, due to the public’s distrust of electricity and expensive prices, John’s invention hadn’t hit the mainstream. President Cleveland and Coolidge requested the presidential Christmas tree to be illuminated by lights in 1895 and 1923 respectively, but it hadn’t sparked any craze for it. Albert Sadacca was inspired to sell Christmas lights at a cheap price as he saw potential and his family owned a lighting company in the 1920s, causing the massive craze of Christmas lights we know today. Addis Brush Company’s artificial Christmas tree As the Christmas tree industry grew throughout the world, deforestation became an issue within the Christmas tree industry, especially in Germany where the tradition originated. Germans developed the world’s first manmade Christmas tree made out of dyed goose feathers in the 1880s. Slowly, other countries began transitioning away from real Christmas trees in favor of alternatives. The introduction of Addis Brush’s fake Christmas tree caused a massive boom in the sales of Christmas trees in the 1900s. Addis Brush Company, a producer of toilet brushes, had made an oversupply of toilet brushes, so they made some improvisations. Dying the brushes green and assembling them, the company has made its first lines of Christmas trees. It gained popularity as its small size and price are suitable for many families. Later on, manufacturers began making aluminum and PVC Christmas trees in the 1950s and 1980s respectively. Workers decorating the first Rockefeller Center Christmas tree in December 1931 Christmas trees have become a major icon for Christmas because it was placed all over the states, ranging from homes to schools to offices to skyscrapers, namely the Rockefeller Center. In December of 1931, the first Christmas tree was set on a construction site of the Rockefeller Center by Italian-American workers. The Great Depression had just devastated the world’s economy. People brought any kind of decorations they could find; paper garlands, cranberries, and tin cans were all hung onto the tree. Two years later, the Rockefeller Center erected its official Norway Spruce, creating a sensation for locals and tourists alike. Every winter afterward, the Rockefeller Christmas tree became a wintertime symbol of hope. In 1988, the National Christmas Tree Industry reported that there are approximately 34.1 million Christmas trees sold nationwide with a wholesale value of $680 million. The Tree Today Today, the Christmas tree industry has metamorphosized into something brand new. There are more than 15,000 Christmas tree plantations across the United States with more than 100,000 workers employed. Oregon is considered the state with the most Christmas tree farms as it has more than 1,000 farms. The estimated number of Christmas trees grown in the United States is 350 million trees, resulting in the value of the live Christmas tree industry being $1 billion in 2021. Farmers can earn an average of $9 per tree. Despite the high number of Christmas tree farms founded, demand for live Christmas trees lowered as people became environmentally conscious, manufacturing has become streamlined, the prices dropped, and the aesthetics of manmade trees improved. Reportedly, 82% of Americans elected to purchase fake Christmas trees instead of living ones with 78 million artificial trees across the United States in 2020. The increase in the popularity of fake trees has stagnated the sales of live trees. In 2020, the value of the artificial Christmas trees industry is $1.2 billion, only $200 million higher than its live counterpart. Because of the Christmas tree, the tradition has spread across the wide globe, absorbed into cultures, and global industry worth over two billion dollars. Enjoy the holiday season! [...]
October 3, 2022Business / Case StudiesThe rental car industry has suffered a dramatic inadequacy: not enough cars to rent. The global shortage of chips combined with the huge dip in tourism demand during the COVID-19 outbreak resulted in a deflated fleet of automobiles for anyone to rent. With more than 770,000 cars in total sold off to stay afloat, many companies were overwhelmed when the demand for rental cars made its sudden rise, consequently resulting in lower profit margins. The low supply of rental cars and the exponentially growing market for them has caused the so-called “Rental Car Apocalypse.” However, some companies managed to come out on top, and one even grew expansively during the recession, Turo.  Turo is a peer-to-peer automobile rental company established in Boston and now headquartered in San Francisco. Turo has gained popularity over the past decade because it is the world’s first car-sharing service to allow people to put up their cars for rent for a long period, generating extra profit when their cars are not in use. In Fall 2021, Turo reported more than 900 employees, 85,000 hosts servicing in 56 countries across the globe with a huge fleet of 150,000 cars, and a $1 billion valuation. Founded in June 2010 by Shelby Clark, and later on, directed by Andre Haddad, Turo has existed for a decade, shedding many former “skins” and becoming the Turo we know today. It’s All About Drive (2009-2010) The idea of Turo can be traced back to the fall of 2010 when Clark was living in Boston and had to visit his family outside of the city. Clark found the nearest short-term rental, which was a mile or two away from his location, forcing him to bike through the Boston snow. As he cruised through the streets, Clark saw many cars parking at the side of the road, used by no one. Clark asked himself: “Why can’t I be driving any of these cars?” – Shelby Clark Clark had just found himself a new idea for a startup — a global peer-to-peer car-sharing platform named RelayRides, allowing car owners to rent out their cars for a small profit. Later, Clark found out that there was no other peer-to-peer car-sharing platform, which at first seemed like a blessing. Nonetheless, it served as a warning — finding an insurance company to insure private drivers renting other people’s cars would be incredibly difficult. “I underestimated the emotional rollercoaster it would be in the earliest days, it took a year and a half to figure out the insurance conundrum.” – Shelby Clark on getting insurance RelayRides and traditional rental services are not alike. In the past, normal rental services were small in size with a centralized area of operations. Before Clark reached out to insurance underwriters, Clark proposed the idea of RelayRides to Bill Curtis, a professional insurance broker in carsharing services. Curtis then helped Clark in persuading the underwriters to approve insuring RelayRides. After numerous rejections, their efforts paid off as an insurer agreed to their idea, provided a plan, and allowed both to venture into the world of business (Turo is currently insured by Liberty Mutual Insurance). When RelayRides began its funding phase, they found a total of four investors for the initial rounds, one of whom is Howard Hartenbaum, a partner of August Capital. Hartenbaum stated that the company’s concept was “innovative and satisfies the ever-growing market.” The total amount of funds raised was approximately $5 million — a hefty sum of money for a small startup. In December of 2010, RelayRides made its first debut in Boston, Massachusetts. Not Your Local Rental turo.com turo.com Turo offers fully customized, individualized cars for rent Luxury cars, vintage cars, weird cars, and exotic cars — Turo has them! Turo has streamlined the process of online rental service by hosting its services on their application, Turo Go, or their website. Unlike any other companies which own the vehicle that is rented, any car owner can put their car up for rent online. If any of the hosts’ property is damaged, Turo can cover up to $750,000 in liability insurance. Furthermore, hosts are given protection plans before they begin, with different percentage earnings and benefits. The company also provides 24/7 customer service to renters and hosts. Hosts can make contactless key exchanges with their renters by purchasing and installing the Turo software and hardware inside their cars to lock and unlock the doors, a GPS tracker to track their cars, and additional supplies to store their keys. Renters can unlock the car with their smartphone and get the key inside the car after they confirm their purchase. When their session is over, they can lock the car for the next customer. Unlike any other rental, Turo offers a huge variety in their vehicle selection, ranging from the tamest to a car owner’s wildest dreams. The company provides many types of automobiles, such as cars, trucks, SUVs, minivans, and vans to maximize the renters’ experience. It also has a large choice of brands of vehicles, ranging from the classic Toyota to the sleek Tesla to the grand Bentley. Furthermore, renters can sort out any preferences they choose, for example, types of transmissions, certain features, and even the color of the car. “Instead of renting the generic fleet vehicle, are interested in renting some of the unique cars we have in the marketplace.” – Andre Haddad on a wide selection of cars RelayRide Years (2010-2015) In 2011, the first year of operations, RelayRides managed to generate more than one thousand regulars and fifty cars serving them. At the same time, RelayRides made its first domestic expansion to San Francisco, California, where it also moved its headquarters from Boston, Massachusetts. In the following years, RelayRides continued its growth in the United States. RelayRides’ first competitors were legendary giants who had already conquered the mobile transportation market: ZipCar, a similar car-sharing company; Uber, a major mobility company; and Lyft, another mobility company, all of which are located nearby Turo’s (RelayRides) early operating areas. Despite the cut-throat competition from three different companies, RelayRides managed to win over ZipCar’s popularity and maintain its user base, halving Zipcar’s value from $1B to $500M in 2013. Due to its huge popularity, RelayRides renters, hosts, and fleets doubled in size. In the following years, Turo received a total of $52.5M from a myriad of impactful investors, including Canaan Partners, Google Ventures, Shasta Ventures, and Trinity Ventures. On the 7th of March, 2013, Shelby Clark declared that he would step down as CEO because he believed that “his employees are more skilled than him.” Replaced by Andre Haddad, founder of Lebanese Shopping.com and iBazaar and former SVP of eBay. Haddad is determined to drive the company forward. “I’m a founder. I like building things and solving problems. I’m inspired to start something new, and branch out on a new adventure.” – Shelby Clark on his CEO resignation With its business continuously prospering, Turo had to find a way to enlarge its assets and capacity to keep expanding. Between 2013 and 2015, Turo acquired two companies, which are Wheelz, a car-sharing service, and SocialStudio, a mobile app development company. The company horizontally merged with Wheelz to decrease competition and increase overall operational assets, whereas the acquisition of SocialStudio was to further improve its efficiency through the design of its mobile app, Turo Go. As the popularity of RelayRides grew exponentially, Haddad saw a growing demand for long-term rental for traveling and tourism instead of commuting. Thus, in November 2015, RelayRides transitioned into Turo, signifying its gradual shift to long-term rental for travelers, becoming the Turo we know today. Turo, Europe, and a Billion Dollars (2015-2019) Andre Haddad, current CEO of Turo Turo began its first international expansion in the United Kingdom, Canada, and Germany due to the high amount of tourism in the aforementioned countries in 2016 and 2017. After integration into the European market, Turo has accumulated over 8,000,000 users, with one-third of the user base coming from the European expansion. Additionally, Turo has almost total coverage in the United States with an exception of a few states, such as New York due to legal disputes. The company also raised a total of $104 million from a series D fundraising campaign by Sumitomo Corporation, a Japanese trading company; American Express Ventures, an American venture company; SK Holding, a South Korean Conglomerate; and many more. Seeing potential in international demand for car-sharing services, Turo kept on expanding to cities around the globe, ranging from the island of Iceland to the sandy hills of Dubai. To expand the brand in Germany, Turo has offered $92 million to have the rights to Croove, a year-old Berlin-based car-sharing service operated by Mercedes Benz. The acquisition of Croove not only added its luxurious variety of cars to the Turo rental car range of options but also Mercedes Benz’s management principles and strategy inherent in Croove’s business model. Mercedes Benz agreed to the investment proposal, and after a few months, Turo was in Germany. In July 2019, InterActiveCorp (IAC), made its largest investment in Turo’s series E round with a whopping $250 million in venture capital funding, making IAC the largest shareholder and owner. This also pushed Turo’s monetary value to $1 billion, causing the startup to reach unicorn territory. In the same year, Turo had more than 10 million users and 400,000 automobiles listed on its website. The Rental Car Apocalypse and Beyond (2020-Present) Lines of people waiting outside of rental dealerships during the COVID-19 pandemic in 2020 grew as the tourism industry came to a halt. In order to prevent further infections and deaths, the pandemic resulted in a substantial decrease in demand for rental cars. With ridership declining by 61%, major rental services, such as Hertz, Avis Car Rental, or AutoSlash, sold off some of their fleets and downsized their workforce to cut expenditures amidst looming bankruptcy. Hertz didn’t adapt well. Racked up to the gills in debt, Hertz — one of the oldest, longstanding car rental institutions — went bankrupt in the fall of 2020. However, the storm wasn’t quite over yet. When restrictions against tourists were lifted, there was a surge in demand for rental cars as travelers took to the road for travel, avoiding potentially infectious airports and planes. As many rental corporations had already sold most of their fleet, they could not serve every customer in a short period, causing huge lines of soon-to-be renters in front of dealerships. Furthermore, the price of a rental car escalated in line with demand versus supply, sparking what economists called “the Rental Car Apocalypse”. Moreover, the semiconductor shortage causes the price of automobiles around the world to skyrocket, making it difficult for any car rental company to purchase a brand-new set of operational vehicles. Turo didn’t miss a beat. Since Turo does not own its vehicles, the startup has no fleet to have to sell off or repurchase. Regardless of the lower demand for transportation during the pandemic, Turo grew 6% in 2020 with a steadily increasing amount of localized car rentals for people handling errands and basic day-to-day travel. In 2022, Turo acquired OuiCar, another ride-sharing company headquartered in New York, completing Turo’s coverage of the United States. Also now operating in France as previously seen as an opportunity by Haddad, Turo continues to succeed in traditionally entrenched, competitive markets.   Turo officially filed for the New York Stock Exchange (NYSE) as of early 2022, and investors wait for its stock to be available on public exchanges with JP Morgan and Morgan Stanley leading the offering. Conclusion After a decade of adventure, discoveries, and struggles, Turo is a far cry away from a cold bike ride in Boston to Clark’s rental car. Turo started from a small car-sharing startup that barely had any user base to a breathlessly awaited IPO offering. With the determination of Clark and Haddad and support from investors, they both managed to change an industry for the better, inspiring a new generation of entrepreneurs all because of a single complaint. Their adventure in the wide world of car-sharing has shown that an idea can change the world forever. The ride never ends. [...]
September 27, 2022Space / TechnologyThe global space launch services market size was valued at $9.88 billion in 2019. Projected by Allied Market Research to reach $32.41 billion by 2027, the industry grows at a CAGR of 15.7% from 2020 to 2027. Weighing less than 10 kilograms, nanosatellites stand to miniaturize satellite technology, making a personal satellite accessible for less than half a million dollars. A 340-gram CubeSat frame What are CubeSats? Table of Contents What are CubeSats? CubeSats DimensionsWhy would you want to send one into space?How do you get a CubeSat into space?How to Build and Design a CubeSat?Who Designs and Builds CubeSats?What can you put in it?How much does it cost?Fee Breakdown of a 3U CubeSatIntegrators Help You Handle LogisticsThe SummarySpaceX offers Payload Space for Tiny Satellite RideshareResources A CubeSat is classified by NASA as a nanosatellite. Nanosatellites are satellites that weigh less than 10 kg (22 lbs). As a class of miniaturized satellites designed in 1999 by professors Jordi Puig-Suari and Bob Twiggs (of Cal Poly and Stanford respectively), CubeSats exist as new private satellite networks for academic, commercial, and governmental connectivity. With over 2,080 nanosats forecasted to launch, that’s almost 6,000 tiny satellites orbiting in Earth’s Low Earth Orbit (LEO) by 2028. CubeSats Dimensions CubeSats are built to standard dimensions of 10 cm by 10 cm by 10 cm. Each Unit (U) is 100 cm³. CubeSats can be one unit (1U), two units (2U), three units (3U), or six units (6U) with an average weight of 1.33 kg (3 lbs) per unit. However, cutting-edge CubeSat frames weigh less than 1 pound! Satellite Mass Classification Large satellites>1,000 kgMedium satellites500 – 1,000 kgSmall satellites<500 kgMinisatellites100 to 500 kgNanosatellites (CubeSats)1 to 10 kgPicosatellites100 g – 1 kgFemotsatellites10 g – 100 gAttosatellites1 g – 10 gZeptosatellites0.1 g – 1 gNanostats Database Why would you want to send one into space? The uses for a CubeSat range from academic research & commercial applications to heightened intelligence for governmental agencies. If an entity wants to know how many cars show up at location on any given day, that data is now available privately. If a university wants to set up the first predictors of earthquakes for faster warning times, they can now launch a CubeSat to start analyzing hyperspectral imaging and electromagnetic signatures to track what patterns occur before earthquakes happen. In financial markets, more accurate imaging offers a user key information on the activity of production; upon finding a lack of activity, one could theoretically short a seemingly successful company. nanostats.eu Academic Research For professors Bob and Jordi, the logic was simple — build a smaller satellite that’d be cheaper to launch. With a smaller payload and faster construction time, the Russian Space Program had offered to study the feasibility of launching a CubeSat in 1999…with a price tag of $500,000,000. The first CubeSat was finally launched in 2003 with the goal of functioning as an early electromagnetic wave detector in predicting earthquakes. The academic opportunities to conduct biological experiments without the impact of Earth’s gravity represent the next biggest leap in science since the Internet (Axiom Space, 2021). In the present day, with a cheaper pricing table (see below), some CubeSats have become countries’ first-ever satellites, launched by universities for academic research. Biological research payloads comprise the purpose behind many launches, with more planned in the coming six years. (NY Times, 2019). Logistics Initially, professors Jordi and Bob experimented with miniaturized satellites for Earth observation or accessing radio signals from Earth’s low orbit. In the present day, CubeSats are used for increased reliability in tracking your company’s maritime shipments globally. Traditionally, all a ship has to do to vanish from modern tracking systems is disable its AIS (Automatic Identification System). Services such as Unseen Labs offer EM (electromagnetic) detection on a CubeSat network to create signatures for each ship, which are incredibly difficult to falsify. As a result, spacecraft technologies and extensive data have become accessible to companies that could not justify the feasibility and cost of a larger satellite. Tracking Changes On Earth With the best imaging known to man, hyperspectral imagery specifies the presence of invisible phenomena to companies and educational institutions alike. “Building a Health Monitor for the Planet,” is Pixxel’s mission statement. Pixxel exists as a space data company providing solutions in hyperspectral imagery for higher spatial resolution imaging in the observation of our planet. pixel.space How do you get a CubeSat into space? With such a wide range of capabilities from having your own satellite, the purpose of your satellite will determine its programming, payload requirements, design, and launch. If you have a massive payload, you would work directly with SpaceX or another leading launch provider, but for CubeSats and nanosatellites, one would arrange rideshare for their nanosatellite through a broker or launch service provider such as Exolaunch, who recently signed a payload contract with SpaceX. A launch service provider is a payload broker for rocket launches. Launches allocate the main payload and extra space for secondary payload where these CubeSats will rideshare up into space. These slots are purchased by launch service providers and they broker your payload contract to get your satellite into space. Exolaunch.com How to Build and Design a CubeSat? A DIY CubeSat IS possible. The core components of a CubeSat are a lithium battery, a frame, solar panels, and a unit enabling network communications. Unfortunately, before a launch provider will even consider your DIY payload, they will want to make sure it undergoes extensive testing (which coincidentally, costs a ton of money). If you plan on sending a satellite into space it’s better to go with a company with expertise in designing and building cubesats. Who Designs and Builds CubeSats? There are several vendors that are willing to make your project become a reality. A $4,000 CAD file and datasheet from Endurosat represent the best starting point for building your nanosatellite. Similar to purchasing the blueprint of a custom-designed home, the pre-tested specifications included in the CAD file can be used to fabricate the satellite structure. Once the frame meets space standards, the Cube Unit(s) are installed inside, with exterior framing. Finally, solar panels are fitted to the outside panels for long-term power needs. endurosat.com endurosat.com endurosat.com What can you put in it? A CubeSat essentially represents a Pandora’s Box of opportunities for add-ons. Not only can it serve as a time capsule in space, but it can also connect to networks with invaluable data. All sorts of sensors ranging from star tracking to long-range cameras can be installed inside of and on your CubeSat for purposes academic, commercial, and governmental. ISIS, IQ Wireless, Pumpkin, Enpulsion, MicroSpace, Maryland Aerospace, and RUAG are companies selling CubeSat products on the CubeSat Shop (CubeSatShop FAQ, 2022). cubesatshop.com How much does it cost? A 3U CubeSat All-in-one Platform costs approximately $200,000 excluding support and launch services. Launch services run approximately $145,000 for a 3U CubeSat to be sent into space. Depending on the addons you chose for your nanosatellites, it’s possible to have access to space data with under half a million dollars, not including system testing/integration, in-orbit operations, and system maintenance. A pricing table for space launches Fee Breakdown of a 3U CubeSat DescriptionCategoryEstimateCAD file & Datasheet from EndurosatDesign~$4,100X-Band High-Speed Data TransmitterCommunication~$30,000X-Band 4×4 Patch Array Antenna~$8,000Onboard Computer (OBC)Computer~$10,000EPS II + Battery PackPower Module~$40,0003U X/Y Deployable Solar ArraySolar Panel~$20,000CubeSat StructureSatellite Frame~$4,000Assembly JIGGround Support Equipment~$4,0003U Payload of five kilograms in Earth’s Low OrbitLaunch~$145,000Total Estimate to send a 5-kg 3U CubeSat to Low Orbit:~$265,000Fee Breakdown of a 3U CubeSat Integrators Help You Handle Logistics There are also integrators that handle everything from A-Z from design to launch. From on-orbit operations to subsystem manufacturing, integrators like Space Manic offer full satellite integration services to “shrink the time from order to on-orbit delivery within several months,” (Spacemanic.com, 2022) The Summary For half a million dollars or less, you can have a personal satellite. Chose the number of CubeSats for your satellite platform: 1U, 2U, 3U, or 6U. Select and customize your CubeSat subsystems manufacturing and conduct testing. Once transportation to the great beyond is secured via rideshare, you’re counting down the days to launch and deployment. Finally, tweak the on-orbit operations for the best uses of your CubeSat — who knows what new disruptive business industry you can create? SpaceX offers Payload Space for Tiny Satellite Rideshare Payloads for our upcoming fourth dedicated smallsat rideshare mission – Transporter-4 – were encapsulated into Falcon 9’s fairing late last week. On this flight are 40 spacecraft, including cubesats, microsats, picosats, hosted payloads, and an orbital transfer vehicle pic.twitter.com/9I8huWOt1F— SpaceX (@SpaceX) March 28, 2022 SunCube by Arizona State University It all started as a university education program satellite. It was kind of funny. I didn’t think that people would criticize it as much as they did, but we got a lot of feedback, you know, “That’s the dumbest idea I’ve ever heard. Nobody’s going to use this toy.” We said, “Who the heck cares. We’ll go ahead and use it. We’re using it for education.”A chat with Bob Twiggs by Stephen Clark, 2014, spaceflightnow.com Resources NASA CubeSat 101 | Interview with Bob Twiggs | NASA CubeSat Overview | CubeSat Structures | Unseen Labs | Omnispace Solutions | CubeSat Shop | CubeSat Shop FAQ | Spaceflight Pricing | CubeSat Launch Management Services – Space Manic | Mission Planning Guide PDF | NanoSats Database | ExoLaunch spaceflight.com Axiom Space: The Final Frontier for Real Estate? [...]
September 13, 2022Business / Case Studies / FinancePatagonia is a retailer that sells gear for outdoor sports and iconic clothing worn not just by outdoor enthusiasts, but by finance and tech bros alike. Despite the brand’s popularity, it may be most known for its ridiculously unconventional company culture. They donate 1% of all sales to environmental groups. They have a team of employees driving around to repair clothing instead of buying from them again. They ran an ad titled “Don’t Buy This Jacket.” Despite their focus on environmental causes and anti-consumerism, sales are stronger than ever with an estimated 1 billion made a year with over 3,000 happy employees around the world. In this case study, we look at how to build a billion-dollar company while saving the planet. What is Patagonia? Table of Contents What is Patagonia?What’s Special about the Patagonia Office(s)?Daycare Since 1983Build a Company CultureFind a Need and Fill ItTrust in the Right PeopleProve Your Core ValuesProtect Your Core ValuesInclude Your Customers in Your MissionCreate a Network of Like-Minded BusinessesYvon Chouinard Gives Away Patagonia In 1957, the 18-year-old version of Yvon Chouinard bought a 138-pound anvil, a used coal forge, and blacksmithing tools. Using an old harvesting blade and old-fashioned inspiration from a Swiss climber, teenage Yvon Chouinard started a billion-dollar enterprise from the trunk of his car and a tin shed in his parent’s backyard — canned cat food was on Patagonia’s early cafeteria menu. The 1960s to the 2000s represent 40 years of growth in $1.50 to billion-dollar increments under the Patagonia brand, year over year. During 2017-2018, their annual gross revenue growth curve stuck close to an astonishing 5% in a time when people were supposed to stay quarantined. Patagonia Works operates as an umbrella company streamlining partnerships, HR, accounting, and legal services for its affiliates. To date, the Patagonia brand has contributed over $116 million dollars in environmental aid to agencies around the world (Patagonia Works, Annual Benefit Corporation Report, 2021). A staggering 450 employees work daily to protect our planet, creating and supervising the execution of grants to the appropriate environmental agencies. Today, the Patagonia Incorporated offices resemble an environmentally friendly college dorm/recycling center where the 2,730 employees all love nature and the range of healthy activities it houses. Solar systems outline a modern campus as wet suits dry on the roofs of Patagonia staff cars. The Patagonia Works site is a five-acre property a few minutes from the surf. If you can spot an employee at Patagonia who doesn’t like getting outdoors, congratulations! You’ve found a unicorn. Patagonia has hundreds of stores in 10+ countries across 5 continents as well as factories in 16 countries. Every facility centers around environmentally sound practices in six critical human impact categories: gear, apparel, food, water, energy, and waste.  All leaders and CEOs of Patagonia have spent considerable amounts of time in the great outdoors over the last 70 years. For the current CEO of Patagonia Works Ryan Gellert, mountain climbing has “defined pretty much everything about my life for the past 25 years.” Through interlacing die-hard environmental virtues, Yvon Chouinard built a $1 billion-dollar empire as one of the best examples to see how to build an internationally renowned brand around a lifestyle you love. What’s Special about the Patagonia Office(s)? Patagonia employees are hired for their independence. “Ant colonies don’t have bosses. Everybody knows what their job is and they get their job done,” says Chouinard. Psychologists who have studied Patagonia’s work culture have told Yvon Chouinard that his employees “are so independent they are unemployable anywhere else.” With the freedom to set their work life around their outdoor passions in nature, the founder and original creator of Patagonia’s work culture has entitled his manifesto, Let My People Go Surfing: The Education of a Reluctant Businessman. Daycare Since 1983 The human brain grows more between birth and five years of age than at any other point in a person’s life. In fact, at three years old, a person has developed approximately 80% of their brain matter for the rest of their adult life. For every parent who’s an avid lover of outdoor activities and supports the development of their young, childcare at work leads to more productive, protective measures in the way people approach and handle work. Over the past 39 years, onsite daycare with a devoted childcare department is a regular fiscal commitment. Self-reported at over 70% of the Patagonian workforce as women, Yvon Chouinard has created sustainable centers where people integrate their kids (family) and work (supporting family) seamlessly. Build a Company Culture More than 9,000 applicants sought 16 coveted internships at Patagonia offices in 2019. People young and old, as consumers and employees gravitate towards two very clear factors in what set Patagonia apart: quality and values. With a shift in preference for work/life balance, Gen-Z and Millenials seeking work tend to seek places with values and real impact. With annual sales on track to exceed $1 billion, Patagonia products bespeak long-lasting durability and values behind their operations. As a result of creating practically better products and combined with real values people can get behind, talented team members help build the billion-dollar enterprise. Consumers truly enjoy a good product that lasts through wear and tear…excellently. As independent staff members build out their schedules with the goal to get the job done, the infrastructure of a solid company grows beneath you. Find a Need and Fill It For Yvon Chouinard, Patagonia started by going after falcons. The Southern California Falconry Club of Southern Califonia trained hawks and falcons for hunting. Don Prentice, one of the club leaders, taught Yvon and his friends how to rappel down the cliffs to the crevices where falcons made their homes. Yvon and his friends loved scrabbling up and down the mountain faces so much that they started boarding freight trains to the sandstone cliffs of Stoney Point, San Fernando Valley. In the American 1950s – 1960s, young Yvon Chouinard traveled through California living and breathing mountain climbing. The growing community of climbers and outdoor enthusiasts made for welcome outings in the pristine national parks of the United States. The only pitons available at that time were made of soft iron, placed once to secure safety ropes, then left in the rock. But in Yosemite, climbers go for days on end, placing their pitons hundreds of times throughout their climbs. Yvon Chouinard, after meeting John Salathé, a Swiss climber who had made hard-iron pitons out of Model A axles, decided to make his own reusable hard-iron pitons. Using Chouinard’s first pitons, mountain climbers could reduce their overall load weight, reuse their pitons, and leave a clean climbing trail after they’ve reached the peak. If you were a climber in need of reusable pitons, you could buy one for $1.50 (about $15 today). Yvon Chouinard eventually taught himself to make two chrome-molybdenum steel pitons in one hour, effectively creating a $30/hour job for himself directly from his love of the outdoors. Soft iron piton – hard to reuse Hard iron piton — easy to reuse As orders began to grow and Yvon Chouinard integrated life and work, he built a small tin workshop in his parent’s backyard in Burbank, California. On surfing days up the California coast at Big Sur and San Diego, Yvon Chouinard would simply place his anvil in the sand after a surf session. With a chisel and hammer, Yvon Chouinard would cut up the pieces he needed to complete later at the shop with the forge. Over his quest to find the best climbs, the best experiences for a young man in 1960s America, Yvon Chouinard forged mountain climbing pitons during winter. During spring, Yvon Chouinard spent his time gallivanting with the nature community in Yosemite. In summers, you could find him climbing the mountains of the U.S, Canada, and even the Alps. Trust in the Right People Rose Marcario, Patagonia Veteran Ceo of 12 Years Yvon Chouinard has always understood the practicality of women’s choices and decision-making. It was Yvon Chouinard’s mother’s idea to move from Maine to the temperate climate of California to improve his father’s asthma. Yvon self-reportedly fell in love with his wife after watching her rip off the license plate of Yosemite litterers to report them to Yosemite park rangers. Rose Marcario quadrupled Patagonia’s revenue in her tenure and simultaneously contributed to more grassroots environmental campaigns than any other Patagonia CEO in the history of the company. Finally, as Yvon Chouinard was brought up surrounded by women and continued to surround himself with them by preference, Yvon Chouinard only trusts women to hire people at Patagonia (The Newyorker, 2021). It was Rose Marcario that pointed out that rampant consumerism wasn’t ideally attractive to younger generations. As CEO for over 12 years, Rose Marcario shaped Patagonia into much of what it is today. Ryan Gellert is an avid mountaineer and skier who has spent his career at outdoor retailers, including Black Diamond (Yvon Chouinard’s original company bought by its own employees amidst bankruptcy). Ryan Gellert has a decades-long track record of social and environmental activism, making him perfect to lead one of the most politically engaged corporations in history. With a business and law degree, Ryan Gellert heads Patagonia’s operations in Europe, the Middle East, and Asia. Patagonia was one of the first U.S. retailers to shut its stores at the onset of the pandemic and Rose Marcario stepped down as CEO without naming a successor. Ryan Gellert assumed leadership of operations at a time when the company structure was being reorganized and their environmental direction was in question. However, after two years of taking leadership, Ryan Gellert has become a public figure in environmentalism, representing a company with over $1 billion in annual sales. Jenna Johnson, the new head of Patagonia, Inc. Jenna Johnson is a lanky rock climber with the sheer responsibility of managing the business direction of Patagonia Inc in all things apparel & gear. With an impactful voice in how environmentalism impacts Patagonian values, Jenna Johnson rose from vice president of technical outdoor products. Hands-on experience in building products from trail running to surfing, climbing, and snowboarding helps make for clear decision-making at Patagonia Inc. Furthermore, her biggest goal is to continue to align the creation of these products with the company’s mission. “We’re in the business of saving the planet.”Patagonia Mission Statement Earlier this year, Jenna Johnson, Patagonia Inc’s President, met with Vice President of the United States Kamela Harris at the White House as a leading corporate leader to discuss the impacts and necessities of improvements to childcare. Passionate, focused, and impactful people in your team will help you build an organization that grows on even after your tenure as leader is over. Prove Your Core Values “The best thing you can do for the planet as far as clothing goes is to buy used clothes and wear them until you just can’t wear them anymore.”Yvon Chouinard As a retailer, what company in their right mind devotes funds to focus on recycling old products instead of working towards the consumer buying the newest line? In April 2017, Patagonia announced that merchandise in decent condition can be returned for new merchandise credits. The used merchandise is cleaned, repaired, and sold on its “Worn Wear” website. In 2019, it launched a program named ReCrafted that creates and sells clothing made from scraps of fabric coming from used Patagonia gear. Over a hundred thousand items have been purchased to date, proving that Patagonia’s core value of creating sustainably is backed up by its practices. Protect Your Core Values Patagonia’s Social Media During Bear Ears National Land Reduction On December 6, 2017, Patagonia sued the United States Government and President Donald Trump for the legal interpretation of the clause used to reduce the Bears Ears National Monument to a fraction of its original protected state. Unafraid to risk governmental lash back from the Trump Administration, then-CEO Rose Marcario contended that the Antiquities Act of 1906 limits a president’s power to reverse a prior president’s monument designations. “By eliminating so much of the Bears Ears National Monument, the President is putting over a million acres of land at risk for permanent destruction, and we aren’t going to just stand by. Protecting public lands is a core tenet of our mission and vitally important to our industry, and we feel we need to do everything in our power to protect this special place.”Rose Marcario, Patagonia CEO during Bear Ears National Monument Reduction The Bears Ears National Monument, created by President Barack Obama shortly before he left office, was restored to 1.36 million acres, and the Grand Staircase was restored to 1.87 million acres by President Joe Biden. Include Your Customers in Your Mission In 2016, an aspiring Patagonia employee had the completely outside-the-box idea to donate Patagonia’s Black Friday profits to protect the environment. Not just a share of the day’s revenue, but the ENTIRE revenue generated on Black Friday went to hundreds of grassroots environmental organizations. At Patagonia, it’s ideas like this that get taken up the chain of leadership and within a few days, Patagonia had promised their unconventional campaign on social media. With the promise of helping the planet with every purchase, Patagonia included all of its customers in its mission to protect the planet. Patagonia ended up donating over $10,000,000 from 2016 Black Friday sales. “It led to 60% new customers. 60%. It was one of the best business things we’d ever done,” said Yvon Chouinard of Black Friday donations. Each new customer represents potential lifetime value (LTV) as a Patagonia customer. Patagonia Works Annual Benefit Corporation Report, 2021 Create a Network of Like-Minded Businesses For the last 37 years, Patagonia Works, Patagonia Inc, and affiliates have donated 1% of gross sales or 10% of net profit, whichever is greater. Every fund recipient protects the environment in some shape or form. Consider for a moment the value of partnerships between businesses driven by similar passions. From raw material sourcing to sharing distribution costs, there are true monetary savings & potential revenue in collaborating with businesses with like-minded goals. Yvon Chouinard Gives Away Patagonia As of September 14th, 2022, Yvon Chouinard has donated the Chouinard family’s block of voting stock (2% of all shares) to Patagonia Purpose Trust. The trust was formed explicitly for Yvon to hand over all ownership in his name. Patagonia Purpose Trust is a panel of family members and their closest advisers who will continue to play a role in approving the company’s big decisions to oversee the donation of profits to environmental organizations. The rest of the Chouinard family’s shares are going to the Holdfast Collective, a nonprofit that “will use every dollar received to fight the environmental crisis, protect nature and biodiversity, and support thriving communities, as quickly as possible.” Yvon Chouinard gives away Patagonia [...]
July 26, 2022Business / Case StudiesThe wine market was a stagnant industry for decades, with various vineyards fighting over the same wine connoisseurs. One company used an innovative marketing strategy to not only break into the market but become the most power global brand. wine stands as a testament to adapting to consumer research over sticking to traditional values and methods. yellowtailwine.com The Back Story Table of Contents The Back StoryTheir First Joint Venture: Carramar WinesThe Pre-2000 Wine IndustryTargeting, Targeting, Targeting…And PricingEnter: The Best $6 Wine Money Can BuyWhat’s with the [Brackets]?From an Unknown Wine-Producer to Representing Australia to the WorldThe [yellow tail] wine Marketing StrategyGive The Consumer What The Consumer WantsThe Blue Ocean StrategyConclusion In 1981, Bill Deutsch formed what would become Deutsch Family Wine & Spirits (DFWS). DFWS first started with boutique wines from France, but later expanded into a model specializing in marketing and expanding wine sales for select vineyards and wine producers. Throughout the 1980s to 1990s, Bill Deutsch and his son, Peter, rapidly secured marketing influence throughout New York and Boston, along with the rest of the eastern United States. Leading up to 1998, Australian wine-maker John Casella was looking directly at U.S. expansion when Peter Deutsch of DFWS decided to import wine from Australia. Almost by chance, both Casella Wines and DFWS happened to contact the Australian Trade Commission and the two groups were paired together. “We determined wine at this price point from Australia just tasted better than from other regions; we decided we wanted to get involved in the Aussie business and deliver the best bottle of wine on the market for six bucks.”Peter Deutsch, CEO of Deutsch Family Wine & Spirits, 2015. Their First Joint Venture: Carramar Wines Their first venture was Carramar Wines. Showcased in this 1998 merlot below, the label is black, noble, and even includes a family crest. It completely flopped. 2001 Carramar Estate Merlot, Casella Wines & DFWS The Pre-2000 Wine Industry Worldwide, approximately 1,000,000 million wine producers existed in 2000, with roughly 25% of them originating in France. 20% of all foreign wine purchased in the United States was fine French wine. Wine experts and connoisseurs speaking on the industry had completely disregarded the potential of moving outside of its target customer group. “So 35% of the population drinks alcoholic beverages but they don’t drink wine. They’ve tried it, they don’t like it. They’re beer or they’re spirits drinkers. We don’t interview them much because they’ve said they don’t like wine so we’re not going to find out about wine. Can those people be moved over? Who knows. But probably not.”James T. Lapsley, Robert Mondavi & the Wine Industry, 2000 As a result, prior to 2001, there was 15-20% more wine available than people wanted to drink. Only 10% of Americans drank wine regularly in 2001 and constituted almost 90% of all wine purchases. Of the remaining 90% who were not regular wine consumers, roughly 44% did not drink and the remaining 46% preferred beer or spirits.Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 The Average American Wine Drinker in 2001: Aged 40-59 (51%)Lived in the suburbs or urban areas (80%)Caucasian/white (80%)Median household income of $78,100 (85%) Overall, the global wine industry was worth roughly $130-$180 billion in 2001 with an average growth rate of 1-2% per year since 1994. Yet it was also highly fragmented with no one company controlling more than 1% of global retail sales in the same year. Crafting Winning Strategies in a Mature Market: The US Wine Industry in 2001 The U.S. market seemed stagnant in sales, yet the competition was still fierce. According to Blake Dvorak in his “Grape Expectations,” (American Enterprise, 2003), between the years 1975 and 2003, the number of US wineries, had increased from 600 to over 2,500 (400%). With the oversupply of wines and little adherence to changing demand by seeking new wine drinkers, the low-end bulk market’s popular choices were best represented with: Charles Shaw, “Two-Buck Chuck” Bronco Wine Company By 2001, the global supply of wine began crowding stores and warehouses, pushing wine-makers from around the world to seek support from the Wine Market Council. As a collective made up of vineyards, distributors, and major wine players, the Wine Market Council promptly synchronized a multi-million dollar ad campaign: Wine. Since 6,000 B.C. “Then as now, the perfect complement to the ancient art of kickin’ back.” The Wine Council, 2001 Targeting, Targeting, Targeting…And Pricing With the average red wine costing approximately $15.66 dollars, wine chose a very specific price point and audience… vivino.com ..everyone who didn’t drink cheap or fancy wine. @yellowtailwineusa @yellowtailwineusa @yellowtailwineusa With six generations of wine-makers in Yenda, Australia, the Casellas began the second round of their campaign with a key idea: everyone can enjoy wine. Wine didn’t have to be bulk church wine or extremely expensive to be good. yellowtailwine.com/us/our-story yellowtailwine.com/us/our-story Enter: The Best $6 Wine Money Can Buy yellowtailwine.com Launched in the U.S. in 2001, wine became the fastest growing wine brand in America over the following decade, selling more than 1,000,000 cases in the first year. In 2011, wine topped the imported wine list in the United States of America. The Casella Family of Casella Wines and Deutsche Family Wine and Spirits sold more wine to Americans than every French wine producer combined in less than ten years. Targeting key audiences in 25 to 34-year-old females and males alike, their brand represented a simplified version of wine. What’s with the ? yellowtailwine.com As for the brackets used to depict the brand name, the story is that the Casellas were looking up “kangaroo” in a textbook. John Casella then came across the definition of a wallaby. Alongside the Latin form was the Australian version in brackets: . To set the wine apart, both the Deutsches and Casellas decided to keep the brackets and to use the lower case spelling. “to underscore the wine’s lack of pretension,” John Soutter, General Manager of Casella Wines. From an Unknown Wine-Producer to Representing Australia to the World Today, wine continues to market to a diversified market audience. Upon overview of @yellowtailusa on Instagram, the key strategy of being the best option in a middle market remains effective and charming. @yellowtailwineusa yellowtailwine.com/us/our-story The wine Marketing Strategy In the 1990s, wine in the United States was represented largely in two segments: high-value fancy wines vs mass-produced budget wines. In the 2000s, the wine industry was a very stagnant market with little to no growth. The wine strategy was simple: 1) The Logo was a Wallaby. Very different from your usual wine labels, the Casellas aimed to stand out. The Casellas ditched convoluted traditional wine labels for a wallaby. 2) Make an Excellent Wine that Tastes Good.  People who were new to wine or mainly beer drinkers would like it. It’s tasty. “it was delicious . . . an easygoing wine, uncomplicated and fun to drink.” Peter Deutsche 3) No Fancy Labeling.  Every single wine brand had the same fancy logo hailing origins from revered vineyards. To remove all pretentiousness, wine had fun, vibrant labels popping out on shelves. Like the logo, this helped catch the eye of shoppers walking down any grocery aisle. The descriptions for wine were simple and to the point; the wine bottle would say what the wine tastes like. yellowtail.com 3) Clever Brand Positioning. Price points were placed above bulk wine and fine wine. A massive 85.6% of American people aged 18 and older reported that they drank alcohol in their lifetime, and 69.5 percent reported that they drank in the past. (niaaa.nih.gov, 2019). 4) Simplicity. Two wine types were launched in 2001: Chardonnay and Shiraz. White and red. Give The Consumer What The Consumer Wants wine executives undertook extensive research before launching their U.S. campaign. Seeking to enter the market from a different angle, the marketing team asked themselves key questions. 1) Reduce: Which factors should be reduced well below the industry’s standards?Wine complexityWine rangeVineyard prestige2) Create: Which factors should be created that the industry has never offered?Easy drinkingEase of selectionFun and adventure3) Raise: Which factors should be raised well above the industry’s standards?Price versus budget winesRetail store involvement4) Eliminate: Which factors that the industry has long competed on should be eliminated?Enological terminology and distinctions Aging qualitiesAbove-the-line marketingKim & Mauborgne, Blue Ocean Strategy With their answers, the wines campaign had begun. The Blue Ocean Strategy In their academic paper, Kim & Mauborgne explained how wine used a Blue Ocean Strategy. “which consists of escaping the overcrowded market — a red ocean where all the sharks are attacking each other — and diving into a blue ocean where there is no competitor.” Kim & Mauborgne, Blue Ocean Strategy Demand is created rather than fought over. Kim & Mauborgne, Blue Ocean Strategy Here were wine’s strategy plots in 2001: Kim & Mauborgne, Blue Ocean Strategy Strategically, while 1,000+ premium wineries tried to differentiate from each other, they were very similar in branding. Being sweeter and softer than existing wines, wine is easier to drink compared to more acidic and tannin-rich traditional wines. As a result, the decreased acidity reduced the heavy operational costs of wine-aging. The Casellas pulled customers from all groups. Non-wine drinkers found the thought of drinking wine more approachable without needing to develop an acquired taste. “The perfect wine for a public grown-up on soft drinks.”Jon Fredrikson, Publisher on wine Throughout the campaigns, authentic bushman hats and jackets were handed out to wine store clerks. Bush-hat-wearing retail wine sellers found themselves whole-heartedly recommending wine to their customers. “In the space of two years, wine became the fastest growing wine brand in the US, and in 2003 it became the number one red wine in a 750ml bottle sold in the US.”Kim and Maurborgne, Blue Ocean Strategy Over the course of seven years, wine created a measurable change in the way Australian wines were perceived internationally. In China, Japan, and throughout North America, international wine-drinkers began to see Australian wine-makers as producers of fine wine. wineintelligence.com Conclusion The outside-the-box solution begins with a different perspective. Instead of producing what they thought would compete with the existing brands, the Casellas decided to go straight to what the consumer wanted: A fun, decently priced bottle of wine that tastes just fine, does the trick and doesn’t break the bank. yellowtailwine.com And, the best in the under $10 category. [...]
July 15, 2022Business / Case StudiesPet Rock In the ‘70s, technological advancements had helped the toy industry blossom, bringing many recognized toys to life. Many toys made the spotlight, including Stretch Armstrong, a world-renowned stretchable rubber action figure, Weebles, a variety of roly-poly figures, and NERF ball, the world’s first indoor ball. However, all of these products pale in comparison to one of the best toys on God’s green earth, the Pet Rock, a collection of smooth ordinary stones. A sudden cultural phenomenon in 1975 America, Gary Ross Dahl “invented” the Pet Rock, profiting more than $1 million in half a year. Many people were inquisitive about the reason why a piece of rock made a millionaire overnight, and the answer lies in front of them: marketing. Rocky Beginnings Table of Contents Rocky BeginningsA Solid PlanSkyrocketing SalesOn the RocksThe Only Way is UpThe Legacy Tommy Turtle, the symbol of Bottineau, North Carolina On December 18th, 1936, Dahl was born in a small family residing in Bottineau, North Carolina. Then, the household relocated to Spokane, Washington. Both of his parents were the breadwinners; Dahl’s father was a lumber mill worker and Dahl’s mother was a waitress. After Dahl graduated from high school, he pursued higher education at Washington State University and graduated with a degree in advertising. Dahl later became a freelance advertising copywriter, and he claimed that it is “ another word for being broke.” Living inside a small cabin in Los Gatos, California, Dahl described himself as a “quasi-dropout” and struggled to pay bills. A Solid Plan Downtown Los Gatos Dahl and his friends were at a local bar at night in Los Gatos in April 1975. The conversation of the group gradually shifted from topic to topic, eventually ending up about pets and their burden. They complained that their pets require a lot of attention and care, often draining their time, energy, and money. Slightly intoxicated, Dahl joked that he had an immortal pet that didn’t need feeding, grooming, bathing, vetting, or exercise. It’s a pet rock. “I have a pet rock. No vet bills, except once in a while to scrape off the moss. ” Drunk Gary Dahl to his friend When Dahl got back home from the bar that night, he was restless with the idea of the carefree ‘pet’. Dahl realized the full potential of the Pet Rock: a way to save his home and stop his financial struggles once and for all. Soon enough, Dahl began drafting up the first booklet of The Care and Training of Your Pet Rock, a manual on how to care for and train their new rock pet. “Your Pet Rock will be a devoted friend and companion for many years to come. Rocks enjoy a rather long life span so the two of you will never have to part — at least not on your Pet Rock’s account. Once you have transcended the awkward training stage your rock will mature into a faithful, obedient, loving pet with but one purpose in life — to be at your side when you want it to and to go lie down when you don’t.” The Care and Training of Your Pet Rock The main highlight of the book is Dahl’s clever tongue-in-cheek humor and rock-related puns sprinkled throughout the pages. The contents of the book presented the rock as a living, breathing pet that can be trained for various reasons, is passed down from other famous Pet Rocks, and can get illnesses and injuries.  Dahl persuaded two of his colleagues, George Coakley and John Heagerty, to help him fund the project as investors, with Coakley reportedly supporting them with $10,000, worth more than $54,000 today (2022). With the funding acquired, the three began buying essential supplies for the product. The three made their first purchase on a pile of smooth pebbles sourced from the great beaches of Rosarita, Baja California, Mexico at a penny a piece. The cost of excelsior, softwood shavings, was nearly zero, providing the three with almost unlimited cushioning material. Since Dahl was a copywriter, he was able to produce the manuals together with his employers’ products, effectively multitasking. Oddly enough, the largest expense in the entire production is the packaging, not the rock itself.  Dahl was the leading designer of the packaging for the ‘pet.’ Mimicking actual cardboard pet carriers, the box had air holes for the ‘pet’ to breathe through, a handle for the owner to carry, and a bed of straw for the Rock to sit on. Around the box was the name of the product proudly displayed in bold with smaller labels scattered across the packaging. The aesthetics of the box was also a marketing ploy as it build up the ‘realness’ of the Pet Rocks. Additionally, the guidebook also compliments the tongue-in-cheek gag as well. Pet Rock on amazon.com The era and social climate also contributed to the success of Pet Rock. At that moment, the Vietnam war had recently ended on the 30th of April, 1975, but Nixon’s Watergate Scandal had veered its ugly head again, the Second World War’s post-war economic boom was finally over, and there was an ongoing economic recession. People’s moods were rather dismal. Dahl saw an opportunity in lighting up the mood by creating a silly joke out of a rock at a minimal price. “People are so damn bored, tired of all their problems, this takes them on a fantasy trip — you might say we’ve packaged a sense of humor.”Gary Dahl to interviewers from People Magazine in 1975 Skyrocketing Sales After four to five months of preparation, Pet Rock finally made its debut at a San Francisco gift fair in August 1975. The price of each Pet Rock was set at $2, which is around $11 today. Dahl stayed at his booth, waiting for someone to be interested in his product. The public took a great liking to Dahl’s satire and ridiculous marketing. Pet Rocks rolled off the shelves. Over time, Pet Rocks steadily gained profits and building craze, something that Dahl himself didn’t foresee in the planning process.  Interested in increasing its sales, Neiman Marcus, an American luxury department store chain based in Texas, proposed a trade offer to Dahl: a thousand Pet Rocks. Dahl set the listing price at $3.95, which has a purchasing power of $21.46 today (2022). Reportedly, Bloomingdale’s, another chain based in New York, also agreed with Dahl to purchase Pet Rocks for the same price — effectively quadrupling the value of a rock. Many news outlets were astounded by Dahl’s creation, deciding to publish articles about Dahl. Notably, Newsweek, a weekly news magazine, and The Tonight Show, a famous late-night talk show. The process of Dahl getting into the spotlight formed a feedback loop. When Gary Dahl and the Pet Rock were presented in media, the mania intensified, and the presses and hosts wanted to talk more about him, thus causing the fad to continue. As the trend snowballed, Dahl’s team gained a ludicrous amount of profit, selling ten thousand Pet Rocks per day. All the while garnering massive recognition from the media. For Dahl, he was able to buy a better home for himself and his wife, his wife, Marguerite Dhal. As the trio witnessed rapid growth, they founded Rock Bottom Productions to recruit more employees and improve their management. The company was thriving to a point where Dahl claimed that he “taught his P.R. guy to impersonate me so he could also answer his calls.”  When December arrived, people began purchasing Pet Rocks as gag Christmas gifts for their friends, family, coworkers, etc. More than a hundred thousand Pet Rocks were bought per day, accumulating over $15 million of profit at the end of the holiday season. With more than 1.3 million Pet Rocks sold to the open market, it has cemented itself as one of the most silliest and successful trends in American pop culture history. Today, you can purchase your very own Pet Rock on amazon.com, complete with Dahl’s original, delightful manuals on the care of your new pet. On the Rocks In the late ‘70s, his original investors, George Coakley and John Heagerty were not satisfied with the shares gained from Dahl, deciding to sue him for higher splits of profit. The judge of the trial sided with the duo, resulting in Coakley and Heagerty’s victory. Cornered, Dahl wrote them a six-figure check for compensation. After the lawsuit, Dahl and his former friends became bitter with each other and broke up. “We would have liked to have continued a relationship with Gary. But money has a divisive element to it. Gary got rich quick and then he wanted more than he deserved.”John Heagerty With the holiday season over, the Pet Rock craze began to fade as the gag was slowly turning more redundant. Dahl, wanting to keep the trend alive, chose to create Pet Rock-themed merchandise to promote the product, ranging from T-shirts to ‘pet’ shampoo.  He also advertised them as valentine gifts for their loved ones, yet the people were not interested. When Dahl initially created Pet Rocks, he only copyrighted the product name, not the rocks themselves as it is impossible to patent them. Many copycats began profiting from Dahl’s concept of putting a rock inside the box and advertised them as pets, slowly draining Dahl’s gain. Auxiliary businesses also sprung up to create their products around the Pet Rock brand for a piece of Dahl’s pie, including, the Bicentennial Pet Rock, which is painted with the American flag & Pet Rock college certificates. However, the well had run dry. With the company slowly losing revenue, Dahl decided to sell his company. Alas, Rock Bottom Productions had finally hit rock bottom. The Only Way is Up Canned Earthquake Other than the phenomenal Pet Rock, Dahl had designed products similar to it too, such as the Sand Breeding Kit, which is a sand counterpart of the Pet Rock, and Canned Earthquake, which is a dummy coffee can that contains a windup system that enables the can to bounce around. Despite the creativity put into both works, they never outshone the success of the Pet Rock. Dahl had found that his second ambition was revamping and running a small bar. With all of the planning and work cut out, Dahl successfully bought a small saloon in Los Gatos, California. Dahl named his bar ‘Carrie’s Nation’s Saloon,’ which is a reference to a well-known figure in the Prohibition era. The branding resulted in Dahl becoming a multi-millionaire in under a year. Despite his ambition achieved, Gary Dahl was met with challenges inside his establishment and his customers. Carrie’s Nation Saloon in present day “I used to have open days at AMC (Associated Merchandising Corporation) when vendors would bring in their items that they wanted our stores to buy. After the Pet Rock, I can’t tell you how many people came to my office to show me their ‘pet rock’ ideas, and, you know, I never saw another item that could ever match the Pet Rock.”Gary Dahl on annoying inventors Most of his patrons were found to be annoying since Dahl was a renowned marketeer, many people assumed they had invented the next Pet Rock. Dahl had reported times when a group of investors expressed that they were going to package elephant/bull excrement or another team claimed that they were planning to create a petting stick for the Pet Rock. Dahl repeated again and again that the next Pet Rock couldn’t be recreated, yet people still tried. Losing patience, Dahl quit his bartending days and become a sailboat broker somewhere, citing that he would be taking an “eight-year vacation.” Later on, Dahl returned to his professional advertising career in writing for his company until retirement. Advertising For Dummies By Gary R. Dahl In his final years, Dahl contributed to the For Dummies book series by writing Advertising for Dummies, a reference book that teaches beginners how to effectively market and advertise their products or services, and then published it in 2001. On March 23, 2015, Gary Dahl succumbed to Chronic Obstructive Pulmonary Disease. The Legacy Pet Rock became a cultural phenomenon that forever shook American pop culture history, popularized many pieces of work, and was referenced in the media. Tamagotchi, Furby, Neopets, and many other inanimate pets came into fashion with the youth, and many shows made mention of the Pet Rock as the “best pet to grace us all.” Thanks for the laughs, Gary Dahl. Sticks and stones may break my bones, but the Pet Rock is my friend. [...]
July 15, 2022Authorintelligence – noun – the speed with which a human being learns a skill, concept, or application of information All of your life, you may have been looking for definitive proof that you’re different. That simple act, might prove you are indeed smart. Figure 1.1 The Hennom-Nelson IQ Graph by Occupation 1. Smart People Prefer Dynamic Work Table of Contents 1. Smart People Prefer Dynamic Work2. You See Patterns Others Don’t3. You Prefer Building to Communicating4. You Have Adapted to the Modern World Better Than Those Around You5. You’re Happier Working without Distractions6. You’ve Developed Perfect Adaptation Skills7. Your Inner Dialogue Could Be [______]. In the first official group studies conducted by the Hennom-Nelson Group in the early 1960’s, the common curve denoted a lower IQ range for the more static job. As the profession became more dynamic, the IQ range increased (see figure 1.1 above). Note that IQ tests aren’t definitive by any means. The pure range of character-based and mathematics-based IQ tests attests to a very wide range of uncommon denominators in assessing intelligence. One fact does remain true: out of all the markers of success, the Intelligence Quotient (IQ) has the most evidence and research. Figure 1.2 It depends. 2. You See Patterns Others Don’t If you ever find yourself on the side of a conversation realizing that you’re the only one that sees the connection, chances are, you’re intelligent. Intelligent people see trends and connections in a holistic nature, completely different than most people. Making up 0.2% to approximately 20% of the population, a smart person analyzes and adapts trends faster than their peers. 3. You Prefer Building to Communicating Distractions are distracting. When you’re interacting with people on social media or face-to-face, there’s always this slight pull that tells you there’s something you should be making. In 2022, you have found yourself limiting your communication to the most efficient means, while devoting time to crafting whatever it is you like making. 4. You Have Adapted to the Modern World Better Than Those Around You Humans have always been better with tools. From fire to the hand grenade, tool usage is the main advantage that differentiates a person from a different species. How tools are utilized, set intelligent people apart from those around them. When you look around you, at your peers, their businesses, and their work, you find that you’re doing alright. What seems difficult in applying tools to certain tasks and ways to earn income, are seemingly effortless to you while they prove to be incredible challenges for others. 5. You’re Happier Working without Distractions Studies show that people are indeed happier when they spend time with their friends and family. However, in studies conducted on university campuses, those people classified as “highly intelligent” reported they felt happier working on their projects instead of socializing. With a mind that’s constantly buzzing, focus comes with creating something with your mind, you smart cookie. 6. You’ve Developed Perfect Adaptation Skills You hear a gunshot, start tracking the direction, and compare it to the movements and screams of people around you. You remember where you were, where you’re going, and cross-reference it with all the newest, relevant information, then you adapt, decide, and act. In social settings, tact and diplomacy are adaptation measures for survival, perfectly attuned to handling what you need to. 7. Your Inner Dialogue Could Be . Ever since you were young, that cliche quote, “You are the author of your own book. Now write this chapter,” circles in your mind. Memories, lyrics, passages, and what people have said to you ring in your mind no matter the year, time, or place. They wash throughout your mind throughout all the years…where your intelligence collects and organizes it all to make sense of the world. Whether it’s a book, metaphor, code, numbers, mind map, infographic, diagram, exploded view of a mechanism or program, or even process….it’s a lot. If you’re thinking that some of these points apply to you, then welcome to the club. [...]
July 15, 2022Author / Business / Case StudiesEvery single pixel is a website marked in time. Sold for a dollar, these web designers are a part of Internet History. The Million Dollar Homepage The Million Dollar Homepage Was Made by Table of Contents The Million Dollar Homepage Was Made byHow Was The Million Dollar Homepage Born?There’s Another Page on the BlockchainConclusion Alex Tew, born in 1984, is a 38-year-old British entrepreneur, who paid his way through university by selling 1 million pixels of internet ad space for $1 in 2005. Every ad space on The Million Dollar Homepage was sold within five months. Alex Tew, linkedin.com In late 2008, Alex Tew went on to make the headline-breaking Flash game Sock and Awe, and in 2012, launched Calm, the meditation app. As co-founder and executive chairman of Calm, Alex Tew continues to create innovative ideas with information technology. “The first time I met Alex was at an event where he was surrounded by journalists, entrepreneurs and investors all keen to learn how he created the Million Dollar Home Page phenomenon. Despite the scrum around him he remained calm and friendly while finding time to chat to everyone.Underneath his modest exterior Alex is a whip smart entrepreneur that is always working on amazing new projects to keep everyone on their toes.”Michael Acton Smith, Co-founder of Calm and Mind Candy, creator of Moshi Monsters How Was The Million Dollar Homepage Born? The Million Dollar Homepage, 2006 Late one night in August of 2005, Alex Tew lay in bed with a notepad. Brainstorming cheap things that he could sell a million of, Alex Tew jotted down dozens of ideas. Then came the word: pixel. A beatboxer with two years’ experience, Alex Tew had been broke. With $50 dollars for a domain, some addons, and two days’ work, the Million-Dollar-Homepage-Get-Rich-Quick scheme was born. As long as it wasn’t graphic nudity, for a minimum of $100, an advertiser could buy a 10 x 10 grid of pixels and display their image of choice, complete with a hyperlink. On a cold afternoon in January 2006, 21-year-old Alex Tew sat at his desk in Wilshire, England. He was about to sell the last pixel space. $999,999 USD + 1. Two weeks later, the website story was on the BBC and The Guardian. “The site made $3k that day. I was like, ‘Holy crap’. I just made this out of thin air. It felt like Monopoly Money.”Alex Tew, 2006 One month later, Alex Tew brought in another $250,000 and was receiving 65k website visits per day. By the end of October, Alex Tew had made $500,000 from more than 1,400 advertisers. Come New Year’s Eve, 999k pixels had been purchased. Alew Tew auctioned off the last 1,000 pixels on eBay. “In 4 months, I went from living at home with my parents to being a millionaire. It was a get-rich-quick-scheme that actually worked.”Alex Tew There’s Another Page on the Blockchain And, it isn’t over yet. Su Entriken and William Entriken pay homage to Alex Tew with the Million-Dollar-Homepage, the Blockchain Edition. For 0.5 Ethereum (ETH), you can do the same thing on the Ethereum network, own a piece of digital history. The only difference here is if you lose your password, you have lost your square forever. What happens if I lose access to my Square, can you get it back for me?“No. We do not have access to purchased Su Squares. This is enforced by the blockchain. We don’t have any way to get it back. And the fact that we can’t get it back is publicly knowable by inspecting our Su Squares smart contract on the blockchain.“https://tenthousandsu.com/ Conclusion From brainstormed scribbled notes on paper, to a steamroll of events, Alex Tew proved that an idea can come from anywhere. Dream big! You never know, with a few skills and some work, your ideas might become a million dollars. [...]
July 15, 2022Business / Case StudiesBefore innovation is born, “no” is said 1,000 times before you say, “yes.” Steve Jobs sought innovation using simplicity drawing inspiration from art. Here’s how The Bull by Pablo Picasso inspired Apple to create the devices that reshaped our society. Pablo Picasso’s, The Bull In the 45′ winter of France, Pablo Picasso created 11 stone prints of “The Bull”. With each iteration, Pablo removes unnecessary elements to find the true essence of any object. In the image above, the bull progresses from the best “real-life” version to a few lines in the 11th version. With each version, an artistic abstraction method is applied by Pablo Picasso. 11 times in a row until the simplified essence of the bull is found. Like a gold panner sifting through the muck to find nuggets of gold, an artist removes distractions in their abstractions. “Two holes. That’s the symbol for the face, enough to evoke it without representing it. But isn’t it strange that it can be done through such simple means? Whatever is most abstract may perhaps be the summit of reality.”Pablo Picasso on the abstraction method Steve Jobs Creates a Training Curriculum for Apple In 2008, Steve Jobs created an internal training curriculum for Apple. The program was meant to teach new employees Apple’s design philosophy. Steve Jobs Picasso’s Bull is an example of Apple’s core design philosophy. For new employees, Apple also taught the lesson by comparing its Apple TV remote with competitors’ mouses. At significantly fewer buttons, Steve Jobs’s impact on design philosophy is simple: Simplify by removing what’s unnecessary. That’s the way to success. The Apple Mouse: 11 Iterations & a Track Pad Apple Was Near Bankruptcy in 1997 However, Apple had been on the verge of financial ruin. The rather complicated personal digital assistant (Newton) led the company in a series of failed products. Simple vs Complex Referring to Pablo Picasso in saying “no”, Steve Jobs promptly shut these products down. “Wait…stop. THIS IS CRAZY.”Steve Jobs on Apple Products in 1997 During a meeting on all Apple’s products, Jobs shouted and marched to the whiteboard. It was a 2×2 table with his new product line: Steve Jobs By saying “NO”, Steve Jobs knew what the public wanted: something simple. A market cap lower than $5 billion upon Jobs’ return… reached about $350 billion by the time of his death in 2011. The evolution of the iPod, iPad, and iPhone followed in the steps of Pablo Picasso. From the clunky wheel of the iPod classic to the single touchscreen of today’s iPad, Steve Jobs applied Pablo Picasso’s teachings to streamline Apple. Think Different. “You have to deeply understand the essence of a product in order to be able to get rid of the parts that are not essential.” Steve Jobs Sounds like Picasso. With once rare footage of Pablo Picasso sketching “The Bull,” Apple launched its wildly successful “Think Different” campaign. Check it out below. Pablo Picasso sketches “The Bull” + Apple [...]

Receive the latest articles in your inbox