The Funded is a company which helps and coaches people to become entrepreneurs. They typically only take the people who are about to launch their businesses, not the ones who started already, and help them to become a full time entrepreneur.

Usually 90% of start-ups fail in the first 18to 24 months, but this company claims to have created more than a thousand companies and “had flipped the failure rate to 10 percent from 90 percent.” The company achieves this by helping entrepreneurs avoid formative mistakes like choosing a bad co-founder before the launch of the company. They also put participants/students in the situation that a typical entrepreneur would experience, and also give them types of works real entrepreneurs might be doing. By doing this, they transform the mindset of their participants, which makes them more prepared when they actually launches their products.

This method of startup reminds me of the concept the Lean Start-up, where entrepreneurs build their product or services with their potential customers. By closely communicating with their potential customers, they can see whether their products really provide benefits for their customers. By doing the lean start-up, entrepreneurs also avoid some potential mistakes where they spend all their resources and energy building on a product that no one wants to use.

I feel like this is a really good company whose mission is not only to help people to innovate and start solving problems, they also create jobs for people. The company founder, Adeo Ressi, believes that with the 90% surviving start-ups, there are 10,000 jobs being created. I am not sure Funded teaches the lean start-up, but I think it is a great idea to combine both these concepts to teach new and up-coming entrepreneurs.

The popular mobile app Flipboard, now allows both users and retail companies to create their own catalogs; which generates a new great potential for e-commerce.

Flipboard is a magazine like app where users can subscribe to different topics or genre of their interest, and the app would pull together information and articles around the web to put into this one place for users to view. To this date, Flipboard has 90 million users.

Their users now have an new option to interact with the app. They can go line to find products that they like, and add those products to Flipboard, which creates a virtual catalog which they can share with other users/followers. As these other users flip through Flipboard and see these products, with a few single clicks, they can be linked to the website to purchase these products.

Now retailers such as Banana Republic or Sears would be able create online catalogs. But what is so special about creating these catalogs in Flipboard and not on their own websites? It is because Flipboard integrates all these catalogs into one place (app), so shoppers don’t have to go to multiple sites.

This method of marketing opens up a new channel for firms to deliver their value proposition to the costumers, and it is also a way to gain more customers.

Right now Flipboard still focuses their business model by integrating full size advertisement into their “personal” Magazine, in the future has a great possibility to do transaction for online retailers or do retailing themselves.

http://www.forbes.com/sites/roberthof/2013/11/11/flipboard-lets-anyone-including-retailers-create-custom-catalogs/

http://www.fastcompany.com/3021443/with-90m-users-flipboard-launches-shopping-magazine-experience

Facebook wants to buy SnapChat for 3 Billion, how do they justify the evaluation?

Why did Facebook want to buy SnapChat in the first place? First of all, it feels that it needs more engagement with declining teenage user. As new social media platform and apps come out, many teenagers and kids are losing interest in the current platforms. “The kids who are losing their passion for Facebook are pretty much exactly the same ones who are flocking to Snapchat by the millions.”Secondly, it is really difficult for Facebook to continue to grow by having its current business model, it simply have no more ways/rooms for them to do advertisement to their users; “they’ve hit the saturation point.” With the purchase of SnapChat, they will have a new media to do their business.

Facebook bought Instagram last year, which is a photo sharing app developed two years before SnapChat, but currently SnapChat users already sharing 7 times as many photos per day than Instagram.

The challenge for Facebook if they ever purchase SnapChat is to figure out a way to do advertisement.

The Reason that SnapChat rejects Facebook’s bidding is that they believe they are worth more to future buyers, though IPO they may be able to gain raise more money.  The problem with SnapChat is that currently, their revenue is still purely notional. I feel that they made a wrong decision by not selling to Facebook, because Facebook has a great deal of experience in advertisement, and they can quickly change SnapChat’s business model to generate revenue. Once SnapChat misses this opportunity, they might not able to raise so much money once again, because their users might get bored with the app, and switch to new mediums.

http://www.forbes.com/sites/quora/2013/11/15/do-you-think-snapchat-turning-down-a-3b-offer-says-something-about-silicon-valley/

http://www.forbes.com/sites/benjaminboxer/2013/11/15/two-unrealistic-ways-to-arrive-at-a-3-billion-plus-valuation-of-snapchat/

http://www.forbes.com/sites/jeffbercovici/2013/11/13/facebook-wouldve-bought-snapchat-for-3-billion-in-cash-heres-why/

Amazon’s publishing business has not been going well, and all this may have to tie with Barnes and Noble’s refusal to carry their books.

Amazon had been trying to get into the publishing business since 2009, and in 2012, they launched New Harvest, which is an effort to publish general adult titles, instead of focusing on a niche like sci-fi or romance. The problem currently is that Amazon is not successful in pushing their titles into best sellers, and the main reason is that they don’t have to storefront exposure to gain audience attention. They want gain public attention for their books by placing imprinted books in physical book store.

Barnes and Noble’s wouldn’t carry their books because Amazon didn’t allow the retailer to carry digital version of the books, so they decided not to carry anything published by Amazon. It is known that titles published by Amazon don’t gain traction, and now many authors are reluctant to sign up with Amazon.

In this case, Amazon doesn’t have a strong supplier power to have a say on the biggest book store chain in US. It will be really difficult for Amazon to get into this business if they don’t allow other bookstores to sell digital copies.

This hurts Amazon’s publishing business, as they don’t have the key-partner and channel to deliver their products to their customers.

Many for-profit businesses today are seeking methods to use their resources to create social good, which relates to the topics of corporate social responsibility and sustainability. One of the ways for them to achieve that is to rethink and redesign their business model.

Ideo.org is a non-profit branch of the design firm Ideo, which helps both for-profit businesses and non-profit organizations to design and create solutions to apply to poverty-related challenges.

One of their past projects is a toilet rental service in Kumasi, Ghana, partnering with Unilever and Water & Sanitation for the Urban poor. In Kumasi, many residences don’t have toilets in their own home, and they have to rely on the public paid toilets. These toilets are the best option for these residences, but sometimes it can be really inconvenient. Sometimes people would just rather do their business in a bucket and dump their “wastes” out to the gutter. This created some unsanitary areas in the cities, and could lead to diseases. What Ideo.org designed for the sanitation company is a small rental toilet called Uniloo, which could be rented by customers for a monthly fee, and the wastes would be picked up three times a week to be delivered to a treatment facility. As of January 2013, there are 490 toilets in use, by the end of 2013, they aim to service 1,000 households, and 10,000 households in 2014.

This project is a great example of how innovation & entrepreneurship and sustainability can come together. This method is a great way to deliver a firm’s value proposition, and at the same time create a favorable brand perception.

In October, Sears, one of the most established department store and retailer announced that it would be selling back leases of its few biggest locations, and this includes their flagship store in Toronto’s Eaton Centre. With this sell back, sears would be generating $400 million from the landlord, Cadillac Fairview.

Cadillac Fairview wants replace Sears and to get a better performing retailer in order to get more sales and get more rent. This sell back deal, especially in Eaton Centre, allowed many big retailers to bid on this prime location, one of which is Nordstrom.

“Sears Canada took in $4.3-billion in revenue in fiscal 2013, down from $6.3-billion five years earlier.”

The decline of Sears started in 2007 when the company decided to invest less and less into its stores, but rather focusing on their cash flow. Capital investment at Sears declined 37% from 2007 to 2009. This move caused Sears to lose their customers, and their sales continued to decline.

Although sellback of their prime locations can be seen as a risky move, but it instantly generates an extra $400 million in Canada. The sellback of these underperforming stores will lower Sears’ fixed costs, and hopefully retain their profit. Now with extra cash, Sears should focus on improving their stores and merchandises which improves their customer relationship to recapture lost customers, and grow more customers.

This blog post is in response to Candace Formosa’s “HTC The Next Blackberry?” – https://blogs.ubc.ca/candaceformosa/2013/10/06/htc/

Like Blackberry was once a top smartphone maker, HTC at one point was the top android phone maker (Q3, 2011), and it was at the time the largest smartphone maker in the world with 24% market share. But with lack of marketing to strengthen its brand name, its sales have since declined.

For the first time, they are experience a quarterly loss of $101 million, while Samsung enjoyed better than expected earnings, and Apple enjoyed excellent 5s sales.

Candace mentioned that HTC products lack quality and innovation, and was two of the main reasons that HTC had failed, but I think that is not the case.  HTC had many quality products, and since mid 2012, there were not too many innovations in smartphones industry besides upgrading the specs of the phone. But I do agree with her point that HTC didn’t build up a strong name and a loyal customer base. It lacks good customer relationship and lost many customers to their competitors. I also agree on the fact the Candace said their supply chain was an issue, where like Blackberry, rolled out their flagship device after Samsung and Apple released theirs, and that cost them (Both Blackberry and HTC) a huge number of potential customers.

Other phone makers who have ever suffered a loss all either sold off their handset business, or were out of the phone business completely, like Motorola, Nokia, and now potentially Blackberry. So if HTC wants to turn the table around, they have a lot of work to do.

http://www.nytimes.com/2013/10/05/technology/htc-suffers-first-quarterly-loss-as-samsung-soars.html?_r=2&

http://www.androidauthority.com/htc-survive-159160/

http://www.droid-life.com/2013/10/04/htc-posts-first-ever-quarterly-loss-looks-like-something-needs-to-change/

Video:  Twitter Going Public: Inside Their Revenue Business

After seven years of being a successful private company, twitter is finally planning on going public. Twitter valued itself for $12.8 billion back in August based on $20.62 a share and with 620 million shares, and it wishes to raise 1 billion for its initial public offering.

Twitter has been bringing in 85% of its revenue by doing advertisement on their site. The marketers of different companies buy ‘promoted tweeds’ from twitter, and these tweeds will pop up on users’ twitter feed. When users retweet, or follow a company on twitter, twitter gets paid further more.

Many investors are wondering if buying twitter shares would be a good return on investment. In my opinion, it is risky to invest in twitter as in the past the stock price of other popular social media company (Facebook, Groupon, and Zynga) had plunged after their IPO. Although Facebook’s stock price has bounced back, it is due to their excellent performance. In the most recent full year, Facebook has revenue of $3.7 billion and net income of $1 billion, whereas twitter only has revenue of $317 million and net income of $-74 million. Although the revenue for twitter had been continually rising, the company itself is still not profitable. So for those reasons, it may not be wise buy twitter’s share at IPO price because it has a potential for price drop.

Sources

http://www.economist.com/blogs/schumpeter/2013/10/twitters-ipo

http://techcrunch.com/2013/10/04/twitter-vs-facebook-ipo-in-one-chart/

http://www.bloomberg.com/news/2013-10-03/twitter-seeking-to-raise-1-billion-in-ipo-as-sales-grow.html

After Blackberry posted a nearly one billion loss (largely due to its unsold handsets), it was very likely bought by Fairfax a financial firm for $4.7 billion. Fairfax is currently the largest shareholder of Blackberry with 10% of the stock. Blackberry has announced that they are shifting its core customers to enterprise and government users instead of focusing on general consumers. I think that is a good strategy and direction for Blackberry, because they cannot focus on being the best of both worlds. One of the reasons iPhone and Android phones are getting popularities among general consumers is because of all the social apps and games that were developed for the platforms. At the time, blackberry didn’t shift their focus on developing apps and they didn’t realize how much potential these things can generate. By 2013 when they have finally developed a operating systems and a phone that can handle quality apps, but it was already two years too late, and the market had already belong to iPhones and Androids.

Blackberry is known to set standards for enterprise security and productivity, and with the new core focus, BB will not need to compete with other phones on the consumer market. They don’t need to develop new phones every few months to keep up with Apple or Samsung, don’t need to spend money on newer or cooler features, and certainly don’t need to compete in terms of apps. They can focus on what they do best. But is the future bright for Blackberry? No one can tell, because right now a lot of companies are reluctant to purchase new BB10 devices, as they prefer their employees to bring their own smartphones in order to save costs. I think the change of management (to Fairfax) and shift of direction is necessary to Blackberry’s survival, but right now it is too early to call whether they will succeed or not.

http://www.bbc.co.uk/news/business-24214301

http://www.digitimes.com/news/a20130927PD205.html

http://ibnlive.in.com/news/blackberry-to-shift-focus-from-consumer-market-to-enterprise-customers/424061-11.html

http://readwrite.com/2013/09/23/blackberry-acquisition-means-it-will-never-again-be-a-consumer-tech-company#awesm=~oiMJjGKO2sZmBc

    How much does cheap fashion cost? When a sewing factory collapsed in Bangladesh earlier this year, it was estimated that 800 people had died from the incident. Prior to day of collapsing, the building was inspected by authorities and was determined to be unsafe as a working environment because of a big crack on the wall. The owner of the factory ignored this warning and continued to run the factory, and eventually tragedy occurred. Joe Fresh, a Canadian company, was one of the fashion retailer that had their clothings made by the factory. When the news broke out, some Canadian customers threatened to boycott the brand until they can improve the working condition for their factory workers. Joe Fresh is a brand known for selling fast fashion and a cheap price, and it really raised some questions about the company’s ethical policy. Is the company willing to sacrifice some profit and find a more ethical manufacture and a better management? How is this incident going to affect the consumers? Will the price of goods rise?

    My view on this issue is that the management of a firm should definitely assess  what it is the cost of choosing a more ethical (maybe more expensive) manufacture or management, and consider to terminate their business with unethical ones even if it means to move away from their core ideology, which in the case of Joe Fresh is to provide fashionable clothings at a cheap price. This action may drive the price of their products, or even lessen their profits, but a success of a business doesn’t solely rely on its profit. Even though those workers in Bangladesh do not work directly for Joe Fresh, the company still holds some degree of responsibility for them. If more major corporations choose to partner with ethical manufactures, then the less of this kind of accident would happen.

    In the end, Joe Fresh and other some other retailers choose to address this issue by signing a safety pack to regulate working conditions of the manufactures, which at least is a good start towards a more ethical business. More can be found here — http://www.huffingtonpost.ca/2013/05/15/bangladesh-factory-joe-fresh-loblaws-safety-pact_n_3275213.html