What Reddit Could Be Worth
In the last 7 years, Reddit, the giant bulletin board made up of 185,000 + forums on everything ranging from news, photos, arguments to jokes, has taken a large leap. From being a site started by two freshmen students from the University of Virginia in 2005, originally created as an online food ordering site, Reddit has transformed into a website that attracts 500,000 visitors per month.
So what is Reddit worth?
Because Reddit was just recapitalized by Advance, having bought $20 million preferred stock and owning 2/3 of Reddit, the calculations imply that Reddit is on track to be worth more than $240 million dollars.
So what is Reddit’s secret to success?
Reddit is not your traditional website. It does not attract the upscale big name companies to advertise on its website but it does attract advertisements from movie studios, gaming companies and other smaller web based brands. It doesn’t need the big name sponsors to become a good business though. Reddit is a ‘paragon of thrift’, according to Forbe. What this is means it that the company spends only $7 million a year to support only 22 people on payroll and 75 servers from Amazon’s cloud. These expenses are covered by the advertisements it gets from the smaller companies and thus can create substantial revenue for success.
The company has a totally different business model but it seems to be working.
Click here to browse the Reddit Website
Re: BTM In Practice – Mobile Credit Cards In Action
This is a post in reply to Andrea Banzon’s blog post on the concept of mobile credit cards.
Allowing smart phones to substitute a wallet could be the new and upcoming form of business technology management. Mobile credit cards is a viable and inviting technology for customers. It makes for easier payment processes. Consumers will no longer need to lug a wallet around but instead just bring a smart phone around to pay for purchases. A poll shows that 47% percent of Canadian smart phone users would consider using a mobile credit card. Since only two RIM phones are capable of these abilities, the mobile credit card market has not been exposed to the general audience. Once the majority of smart phones become adapted of this new technology, more people will be inclined to use this option of payment.
For example, Starbucks has had a headstart on such a service. Although its mobile app is only integrated with a Starbucks card for payments instead of a credit card, its success can still be measured. Many consumers find it convenient to be able to make payments through scanning a barcode on their Starbucks mobile app.
A mobile credit card would allow consumers to do this with all products. This technology has the potential to become one of the most widespread forms of payment.
The worst is over for Europe – so we hope
For the last 3 years, the 17 countries in Europe who use the Euro have been battling a financial crisis. There have been signs in the market that show that the crisis has now climaxed; the worst may be over for Europe.
Here is some evidence taken from USA Today’s article “The worst of Europe’s Crisis May Be Over”
- falling borrowing costs – lower interest rates (Spain’s two year bonds: interest rate – 6.6% in July 24th down to 3% now)
- rising stock markets (The Stoxx 50 index of leading European shares has increased 26% since June 1st)
- steady but slow stabilization of regional banking systems
- Increase in foreign loans to Eurozone Banks
- European leaders taking steps to steady banks and governments – ease up austerity, use bailout funds to buy bonds
These are signs of reassurance that the Euro may in fact stay alive and functional. However, there is still the possibility of a breakup and there are many challenges ahead for Europe.
Greece. Spain. Banks. These are the 3 biggest challenges that lie ahead for Europe and its financial stability.
It is estimated that Greece still needs bailout funds of approximately 30 billion Euros because of its shrinking economy.
Spain’s prime minister is refusing to request unlimited amounts of governments bonds as aid from the ECB even as the country’s debt is piling higher and the economy is shrinking.
Banks are suffering from the losses on government bonds they bought and loans that aren’t being repaid. A banking supervisor for all of Europe could help partner crippled banks with healthier ones.
Economic growth is what Europe needs to pull itself out of crisis mode. This depends on what government do during the next year to cure its severe ailments.
An entreneurship bubble that is bigger than ever?
After our lecture on entreneurship, I wanted to search up any news on the topic. What exactly is happening for entrepreneurs around the world?
I found a Forbe’s article, “Are We on the Verge of the Greatest Entrepreneurship Bubble?” and want to elaborate on my findings. Recently reelected president Barack Obama signed a new act, the Jobs (Jumpstart Our Business Startup) Act, to encourage funding of small businesses in the form of crowdfunding. Because many aspiring entrepreneurs lack the initial start up capital and are often deterred by negative investment climate, projects are never fully taken to its full potential. The new Jobs Act will help catalyse the growth of new businesses through a different form of investing.
Crowdfunding is the collective effort of different individuals to pool together funds and resources to support other people’s initiatives and organizations. A benefit of crowdfunding is that it brings in investors of different types – ones who are concerned with making profits and ones who invest for innovation and change.
This is just the beginning of a major project. It will be interesting to see how this act will affect the US economy and the world economy overall, especially in the small business sector.
Re: In Turbulent Times, Zara Continues to Practice Supply Chain Resiliency
For a few years now, Zara has been one of the stores I frequent when I shop. I’ve been to Zara stores worldwide, from retail stores in Canada, the United States, Hong Kong to England. I knew that it had been and still is a very successful clothing company, but I had never knew the secret to its success. After the supply chain management lecture on Zara, I wanted to explore this topic a little further and see what others had to say about Zara’s business model. I browsed the web for external blogs on Zara and found this blogpost by Bob Ferrari amongst his many on Supply Chain Matters.
Bob Ferrari provides further insight into the operations of Zara. Although economic uncertainty dwells high in Europe, especially with Spain being one of the epicentres of financial concern, Zara has pulled off a 30 percent increase in profits. How? Zara’s growth can be attributed to two main reasons.
1) its broad geographic scope with retail stores opening worldwide
2) its unique supply chain modelled for fast response times catered to adapt to changing consumer tastes.
Zara also boasts a logistics capability of replenishing every retail store twice a week. As if this system was not efficient enough, Zara has decided to build a new state of the art logistics centre involving an investment of 190 million Euros to further set itself apart from competing firms.
Although this supply chain model is extremely hard to replicate, it is interesting to see if any new startup fashion companies will try to follow in Zara’s operational footsteps to success.
Re: Social Entrepreneurship: An Impossible Task?
Post in response to Oliver Zhang’s Blogpost
I’ve chosen to reply to Oliver’s post because social enterprise is something that I am interested in. Although I’ve only been exposed to the very basics of social enterprise, it seems to fit with what I’ve always wanted to do – to become involved with a business and to make a sustainable and positive difference in the world. Social enterprise is the perfect combination of both. It defies the stereotype of businesses. Since the rise of capitalism, businesses/companies/corporations have been viewed in a negative light with regards to how it exploits workers to maximize profits. Now, the new and promising era of social enterprise rejects that stereotype and creates a new found meaning to business. There is one company that has caught my eye: TOMS. Because I have two pairs of TOMS, I have become familiarized with the business model of One for one. For every pair of TOMS shoes purchased, the company gives away a pair of TOMS to children in underdeveloped countries. The video below gives a bit more information on this social enterprise.
Power of the Dollar(store)
A Dollarama opened in my neighbourhood a few months ago. I fell in love after I first step foot into the store. Why? Because the Dollarama was somehow able to find an equilibrium between my tight student budget and my uncanny craving of goods. All the necessities that I need are there for me, for $1, $2, and maximum $3 – a slash in price of 50% or more in comparison to the other goods providers. So what’s so special about the dollar store that I have to blog about it?
Well, it is now Canada’s fastest growing sector in retail. Dollar stores are forcing mainstream merchants such as Walmart, Canadian Tire, and Superstore to rethink their strategic position before they get robbed of their customers. Dollarama Inc. has become a huge threat to these traditional companies; its rapid expansion across the country has attracted large sales increases, an estimate rise of 9 per cent increase annually. Dollarama draws customers with its simplistic layout, convenience and most importantly, low cost. Rivals are retaliating with dollar promotions in hopes of rallying back customers: Canadian tire launched its “Dollar Deal” promotion and Walmart has increased the number of $1, $2, $3 products.
What once was the destested, dirty, dollar store that middle class and well off shopper avoided has become a frequent stop for them. So what exactly is in store for Walmart, Canadian Tire and the lot? How will they cope with the power of the dollar store?
The future seems bright for the Dollar store.
For more information: Browse the Globe and Mail’s article on How Canada’s retailers discounted the rise of the dollar store
Facebook Faceplant?
On May 18th 2012, Facebook was released to public trading on the stock market with an initial public offering at the price of $38. There was much hype around this IPO; many analysts were anticipating the stock to skyrocket. The opposite happened.
An article on Yahoo written on Sept 27th reports that Facebook’s stock has been down on 51 trading days, up on 39 and unchanged on two since its initial public offering.
What happened? How come facebook is faceplanting?
There have been debates… and many factors could come into play.
1. initial IPO hype was too high – analysts overvalued facebook’s stock
2. weak investor confidence in stock – may think facebook is a fad – doubtful of future success
3. mobile application does not provide efficient advertising
4. advertising on facebook is less effective than what companies are hoping for
These are just a few of the many factors that could have contributed to the plummet of the stock price. Facebook Inc. closed the market on Oct 1st with a stock value of $21.99 per share, 43% below its IPO price.
What lies in the future for Facebook? We shall see. For now, things aren’t looking too well for Mark Zuckerberg and his company.
“Prices of Facebook stock since long-awaited IPO – Yahoo! Finance.” Yahoo! Finance – Business Finance, Stock Market, Quotes, News. N.p., n.d. Web. 2 Oct. 2012. <http://finance.yahoo.com/news/prices-facebook-stock-since-long-awaited-ipo-212925363–finance.html>.
Personal Branding
When we talk about branding, we usually think about product branding, the advertisement of different products to consumers around the globe. We think about the strategies companies use to market their products to us, how it affects our buying habits, and how advertising is becoming seemingly more ubiquitous. While product branding is of high importance, we often overlook a type of branding that is present in our daily actions and interactions.
It is personal branding.
What exactly is personal branding? Celebrities, professional athletes, politicians, and influential business leaders all have their own brands. Brands help individuals gain recognition and form a certain image of the individual in others’ minds. Personal branding isn’t just for celebrities though; it is for everyone. It is equally important to ordinary individuals. A personal brand is the way you see yourself and the way others perceive you. It encompasses everything about you: appearance, attitude, values, skills, abilities, professional career, personal relationships, and presence. Branding lets people market their strengths and skill sets to try and advance in life, whether it is professionally, socially, politically, and more.
Understanding both your attributes and how others perceive you is key to successful positioning.
The Globe and Mail provides some key tips on how to build a personal brand.
A step by step guide to building a brand
- identify your strengths and weaknesses
- find points of parity and points of differences from colleagues/ peers
- Determine your current brand
- Find out where you want to invest your time and energy in your brand
- Use social networking to keep in touch
- Build and expand your network and continue branding yourself
- Understand what attributes you want to attain
- Find a mentor who can help your brand
- Update brand as you advance in your career
- Avoid sticking to the norm / “Generic employee”
- Overcome a negative brand
Wensley, Karen. “How your personal brand will help or hinder your career.”The Globe and Mail. N.p., n.d. Web. 24 Sept. 2012. <http://www.theglobeandmail.com/report-on-business/careers/career-advice/life-at-work/how-your-personal-brand-will-help-or-hinder-your-career/article4533798/?service=print>.
Business Ethics
Who’s heard of the recent (and slowly dying) fad of ‘toning shoes’? I’m sure if not all, then most of you have. The advertising of this line of shoes was pervasive: on billboards, on busses, in magazines, in commercials are more. Endorsed by celebrities like Kim Kardashian and Brooke Burke, Skechers “Shape-Ups” and the rest of its toning line’s claim to fame was guaranteed “toned legs, better buttocks, a slimmer body without setting a foot in the gym”. Here’s an example of a paper advertisement. 
Well it turns out these claims were falsely advertised. Sadly, after all this hype, these shoes have proven to possess none of the magical toning power that the company insisted it did. In May 2012, Skechers took a large hit. The United States Federal Trade Commission forced Skechers to pay $40 million to settle consumer complaints and to reimburse and fully refund sales to unsatisfied customers. The following is a video of CNN’s report on the issue and includes Skechers’ video advertisements of their products.
CCN’s Report on Skechers Shape-Up’s
So what is the ethical issue here? It is simple. Companies should not falsely advertise its products to have features that it doesn’t. Customers have the right to know exactly what they’re getting when they purchase a product. False advertisement is unfair to consumers and will ultimately hurt the credibility of the company in the long run. Consumers will no longer want to purchase products from a company with such a history. Bottom line, companies should have evidence to back up their claims.
If you want to browse the full article: Skechers Toning Shoe – Customers to get Refund