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BusinessWeek: When Sister Is Your Business Partner

Leadership June 30, 2009, 9:40AM EST text size: TT

When Sister Is Your Business Partner

Sibling Cakegirls Brenda and Mary Maher have built a booming family confectionary business in Chicago with hard, thoughtful work

By Stacy Perman

As sisters growing up in Rochester, Mich., Brenda and Mary Maher shared a bedroom and a Hasbro (HAS) Easy-Bake oven. As college students, they shared a passion for baking elaborately decorated cakes. And since 2000, the Maher sisters, now 37 and 39 respectively, have shared a thriving Chicago-based business, Cakegirls, which sells some $300,000 worth of specialty cakes a year. Though they have perfected their ability to craft scale replicas of such cultural artifacts as Wrigley Field and the Sony (SNE) PlayStation—sold to celebrity clients, including Bono and Jim Carrey—and they appear on WE tv's Amazing Wedding Cakes and the Food Network's Last Cake Standing, their biggest business accomplishment to date is their nine-year-old partnership.

While every partnership is fraught with risk, those between siblings are even dicier because of the preexisting personal dynamic that almost always characterizes ties between close family members. Bill Alexander, a professor at the Wharton School who specializes in family businesses, explains that "lifelong relationships unconsciously get carried into these partnerships." At the same time, defining business roles and putting them into practice is tricky. And resolving disagreements—or trying to—can be tinged by decades-old family patterns. Wayne Rivers, president of Family Business Institute in Raleigh, N.C., an advisory firm for family-owned companies, says: "Siblings are more hesitant to sign documents. Siblings often go in with blind trust; you're my sister I trust you"—often thinking family ties will bind their business relationship.

According to the Family Firm Institute, a research group in Boston, only 30% of family-owned businesses make it to the second generation, 10% to the third generation, and 3% to the fourth. While Rivers notes that there are no reliable statistics on the number of business partnerships comprised of siblings, he says it is rising among the businesses he works with. "Ten years ago, 25% of family businesses were partnerships. I would say [the number] is substantially larger today."

After three years of toil, a break

Unlike their genre-busting cakes, the Mahers started off cautiously, holding down day jobs while they figured out their fledgling business concept. In 1998, Brenda moved to Chicago by herself and worked as an administrative assistant for a staffing company with the goal of gaining business skills and locating a viable market. "I don't like to be one-dimensional. It allowed me to get my feet wet in Chicago and learn a variety of skills," she says. By the time Mary came to Chicago (with a full set of professional baking and kitchen equipment) two years later—she had been working at an upscale Detroit-area bakery&—a sense of the business and the roles they would play had emerged. Brenda took the lead role in business and Mary focused on the creative side of cake baking and decorating. The Cakegirls got the word out themselves, telling friends and co-workers about their "night job" in the kitchen.

In the beginning, the sisters lived and worked in the same apartment. They gave prospective customers the impression they had a much bigger operation by using voice mail and posting their catalog online. They also opened a business bank account with $500 and deposited any money they earned from baking into it. Within three years, the Mahers had saved $15,000 from sales, having continued to survived on the income from their day jobs. "I think it is a mistake people make when they blend their expenses together," says Brenda. "We wanted to get a sense over time how much money we could save just on making the cakes out of the apartment." Word spread about their sculptural confections. When Chicago magazine ran a feature on them in 2003, orders flooded in, prompting Brenda to buy a minivan for deliveries. The Mahers felt they were at a crucial point: The business needed a full-time commitment to take advantage of the momentum and sustain itself.

Again, Brenda moved first, cutting back her hours as an administrative assistant. "It was scary. We couldn't get a loan. But I knew if I had more time to devote to the business, we could grow it," she says. The sisters worked out an arrangement in which Brenda worked during the days doing the administrative details and baking. When Mary arrived in the evening, after putting in time as a nanny and as a bookseller at Barnes & Noble (BKS), she did the decorating.

full-time, professional commitments

Although Brenda enjoyed decorating, she was pragmatic. "Mary is 100 times a better decorator than I am and I knew that if I didn't answer the phones and create a structure for the business, it wasn't going to happen."

Their personalities influenced the evolution of the business, too. "I'm more of the mind, if it flops it flops, and Mary is more get-your-ducks-in-a-row," says Brenda. She pushed for a professional space instead of their apartment. Mary waffled at first but the pair eventually signed a six-month lease on a former bakery close to Wrigley Field. It cost an initial $5,000 for the security deposit—a third of what they had saved in three years. Convinced that the business needed her to devote more time to it to succeed, Mary also quit her day jobs. The sisters say the gamble gave Mary the opportunity to experiment with cakes and decorating techniques that would bring the business acclaim.

Until the sisters signed the lease, they had nothing in writing that signaled a formal business partnership. But shortly after signing the lease, they incorporated the business to protect themselves from liability. Like many sibling partnerships, the Mahers consider themselves equal partners and earn identical salaries. Staying true to character, they maintained a sense of humor when assigning their titles. When elder sister Mary filled out the paperwork, she listed herself as president and made Brenda secretary. "Just to get under her skin," jokes Mary.

"The baby of the family" says "no"

The pair say their biggest arguments and struggles often reflect the pecking order established in their childhoods. "I tend to be more black-and-white," says Brenda, "and she is more grey." Brenda says that Mary is very literal and spends a huge amount of time making sure each cake is done to perfection. Says Brenda: "What we fight about most is probably about her saying I charge too much and me saying she takes too long. I say she's adding too many details and she says that's a lot of money."

For instance, not long ago, Brenda decided to stop taking on projects she deemed unprofitable. "We were saying yes to everything and Brenda stopped that," says Mary. "She said: 'Now we have to learn to say no in order to improve the business.' I think that has to do with her being the baby of the family. She wants to prove herself."

Their relationship as sisters does lead to a bit of bickering. "To some degree when we fight, we resort back to who we are as siblings, even though we are talking about business-related things," says Mary. At the same time, they watch out for each other. "We're more like two squirrels," says Brenda. "Neither of us wants to leave early and leave the other one there. We look out for each other. If I see she's getting burnt-out, I say take a day off, and she does the same."

Family business experts Alexander and Rivers agree that one of the biggest challenges in making a sibling business partnership last involves delineating the business relationship and family relationship—both of which tend to overlap. The Mahers say one lesson from their early years—when they both lived and worked together—is the need for space. The pair say they rarely spend time together outside of work these days. (Mary is married, with a young son; Brenda is single).

In the end, the Mahers say that what makes their partnership risky also instills a sense of commitment that's lacking among most business partners. "There is a big difference about working with siblings," says Mary. "I've watched friends who ran small businesses build up a lot of animosity. [Then] they have some disagreement and they sue the other. That is shocking to me. We have a silent agreement. If I don't want to be part of this business, I can't screw over my sister in the process no matter how ugly it gets."

Perman is a staff writer for BusinessWeek in New York.

Copyright 2000-2009 by The McGraw-Hill Companies Inc. All rights reserved.

TIME: Yes, I Suck: Self-Help Through Negative Thinking

Wednesday, Jul. 08, 2009

Yes, I Suck: Self-Help Through Negative Thinking

By John Cloud

In the past 50 years, people with mental problems have spent untold millions of hours in therapists' offices, and millions more reading self-help books, trying to turn negative thoughts like "I never do anything right" into positive ones like "I can succeed." For many people — including well-educated, highly trained therapists, for whom "cognitive restructuring" is a central goal — the very definition of psychotherapy is the process of changing self-defeating attitudes into constructive ones.

But was Norman Vincent Peale right? Is there power in positive thinking? A study just published in the journal Psychological Science says trying to get people to think more positively can actually have the opposite effect: it can simply highlight how unhappy they are. (See pictures of people mourning the death of Michael Jackson.)

The study's authors, Joanne Wood and John Lee of the University of Waterloo and Elaine Perunovic of the University of New Brunswick, begin with a common-sense proposition: when people hear something they don't believe, they are not only often skeptical but adhere even more strongly to their original position. A great deal of psychological research has shown this, but you need look no further than any late-night bar debate you've had with friends: when someone asserts that Sarah Palin is brilliant, or that the Yankees are the best team in baseball, or that Michael Jackson was not a freak, others not only argue the opposing position, but do so with more conviction than they actually hold. We are an argumentative species.

And so we constantly argue with ourselves. Many of us are reluctant to revise our self-judgment, especially for the better. In 1994, the Journal of Personality and Social Psychology published a paper showing that when people get feedback that they believe is overly positive, they actually feel worse, not better. If you try to tell your dim friend that he has the potential of an Einstein, he won't think he's any smarter; he will probably just disbelieve your contradictory theory, hew more closely to his own self-assessment and, in the end, feel even dumber. In one fascinating 1990s experiment demonstrating this effect — called cognitive dissonance in official terms — a team including psychologist Joel Cooper of Princeton asked participants to write hard-hearted essays opposing funding for the disabled. When these participants were later told they were compassionate, they felt even worse about what they had written. (See how to prevent illness at any age.)

For the new paper, Wood, Lee and Perunovic measured 68 students on their self-esteem. The students were then asked to write down their thoughts and feelings for four minutes. Every 15 seconds during those four minutes, one randomly assigned group of the students heard a bell. When they heard it, they were supposed to tell themselves, "I am a lovable person."

Those with low self-esteem — precisely the kind of people who do not respond well to positive feedback but tend to read self-help books or attend therapy sessions encouraging positive thinking — didn't feel better after those 16 bursts of self-affirmation. In fact, their self-evaluations and moods were significantly more negative than those of the people not asked to remind themselves of their lovability. (See pictures of couples in love.)

This effect can also occur when experiments are more open-ended. The authors cite a 1991 study in which participants were asked to recall either six or 12 examples of instances when they behaved assertively. "Paradoxically," the authors write, "those in the 12-example condition rated themselves as less assertive than did those in the six-example condition. Participants apparently inferred from their difficulty retrieving 12 examples that they must not be very assertive after all."

Wood, Lee and Perunovic conclude that unfavorable thoughts about ourselves intrude very easily, especially among those of us with low self-esteem — so easily and so persistently that even when a positive alternative is presented, it just underlines how awful we believe we are.

The paper provides support for newer forms of psychotherapy that urge people to accept their negative thoughts and feelings rather than try to reject and fight them. In the fighting, we not only often fail but can also make things worse. Mindfulness and meditation techniques, in contrast, can teach people to put their shortcomings into a larger, more realistic perspective. Call it the power of negative thinking.

Find this article at:
http://www.time.com/time/health/article/0,8599,1909019,00.html

Copyright © 2009 Time Inc. 

All rights reserved. Reproduction in whole or in part without permission is prohibited.

Economist: Psyched out

Encouraging competitiveness

Psyched out

Jul 9th 2009
From The Economist print edition

The fewer the competitors, the harder they try

Alamy

Calculate the answer when n approaches infinity

WHAT relationship there is between the number of participants in a competition and the motivation of the competitors has long eluded researchers. Does the presence of a lot of rivals stimulate action or lead someone to give up hope? It is more than an academic question. Or, rather, it is a very academic question indeed, for it may affect the way that examinations are conducted if they are to be a fair test for all.

To investigate the matter two behavioural researchers, Stephen Garcia at the University of Michigan and Avishalom Tor at the University of Haifa in Israel, looked at the results of the SAT university entrance examination in America in 2005. This test generates a score supposedly based on the test-taker’s verbal and analytical prowess.

The two researchers used data on the number of test-takers in each state of the union and the number of test-taking venues in that state to calculate the average number of test-takers per venue in the state in question. They found that test scores fell as the number of people in the examination hall increased. And they discovered that this pattern was also true for the Cognitive Reflection Test, another analytical exam.

These results are intriguing, but lend themselves to more than one explanation. To find out whether they were caused by a psychological effect related to the number of perceived competitors, or were merely a consequence of the greater distraction produced by crowding more people together, Dr Garcia and Dr Tor conducted an experiment. They asked 74 university students to take a timed, easy general-knowledge quiz which they were asked to finish as quickly as possible without compromising accuracy. Each student completed the test alone, but half were told they were competing against ten other people and the other half that they were competing against 100. All were informed that those whose completion times were in the top 20% would receive $5.

The results backed up the psychological hypothesis. Students who believed they were competing against only ten people finished in an average of 28.95 seconds. Those who believed they were competing against 100 averaged 33.15 seconds.

Curious as to why mere belief that he was facing more competitors would alter an individual’s performance, the two researchers ran a second experiment. They asked students to imagine they were running a five-kilometre race against 50 people and then against 500 (or, in half of the cases, the other way round). In both notional races the top 10% of competitors would get a $1,000 prize. The researchers told the students to rate, on a seven-point scale, how much faster than normal they would run in each notional race, with a one being slightly faster than normal and a seven being the fastest of their lives. The average value in the competition against 50 others was 5.43; in the competition against 500 it was 4.89—a result consistent with the other two parts of the study.

When that bit of the test was over, Dr Garcia and Dr Tor then asked the participants a series of questions commonly used by psychologists to evaluate an individual’s tendency to compare himself with others in a social environment. They found that those with the highest tendency to make such comparisons had the lowest scores in the notional race against 500 others. These socially aware individuals are, as it were, looking around, assessing the situation and thinking that it is not worth trying too hard.

In their report on the matter in Psychological Science, Dr Garcia and Dr Tor dub their discovery the “n-effect” since “n” represents any numerical value in mathematics. If confirmed, it may mean not only that examination halls should be kept small— or, at least, the same size for all participants so that the playing field is level—but also that other competitive activities should be scaled down for best results.

Copyright © 2009 The Economist Newspaper and The Economist Group. All rights reserved.

NY Times: How to Start a Company (and Kiss Like Angelina)

July 12, 2009

How to Start a Company (and Kiss Like Angelina)

By JULIE CRESWELL

IN their star turns in James Bond movies, Ursula Andress and Halle Berry perfected the art of emerging from an ocean swim and walking onto the beach in a dripping-wet bikini.

For everyone else? Not so easy. But there are some tricks for aspiring Bond girls, and they involve, among other things, waterproof mascara, Vaseline and double-sided tape. There are some finer points, too, to pull off such a feat, and words can’t quite convey their subtleties.

Sometimes — and this is a difficult sentence for a newspaper to print — it’s easier to learn from a video.

That notion led a handful of Google and YouTube veterans to start Howcast.com, and jump into the bustling and fast-growing crowd of Web sites offering how-to content.

Given the competition, from sites like Howdini and even YouTube, Howcast Media is betting that its particular blend of information and entertainment, presented in short and snappy video, will draw plenty of traffic and, most important, deliver a profit.

Certainly the demand is there. People like to watch videos, and, in a bad economy, the ranks of do-it-yourselfers and would-be MacGyvers are swelling.

Already, Howcast has 100,000 videos in its library, some that it has produced itself and many more from others like Playboy, Popular Science, Home Depot and the Ford modeling agency that share in the ad revenue.

The site offers instruction on a range of topics, from everyday issues — fixing a leaky faucet, creating a living will — to the more obscure, like how to survive a bear attack or how to have sex in a car. (Nothing on Howcast is particularly graphic. Plenty of other sites, of course, already offer that sort of stuff.)

Given the ease of posting on sites like YouTube, where 20 hours of video are uploaded each minute, it takes more than a bunch of short clips to succeed. Part of the trick to winning on the Web is having a distinct personality.

Some industry executives give Howcast credit for finding a way to stand out.

“They understand that video is an incredible medium to share and instruct,” says David Eun, a Google executive who oversees strategic partnerships. “But they also realize that they can use video to provide instruction in an environment that is entertaining, not dry.”

One of the biggest challenges for a site like Howcast, though, is the same one that has vexed old-school media giants and survivors of the dot-com boom: How can content creators turn a profit on the Web?

Howcast’s solution is to partner with advertisers and create instructional videos for their specific products or services.

Blurring the lines between editorial and advertising is a tricky endeavor, of course. Companies that try to be too stealthy or clever risk seeing their brand roasted on Facebook, Twitter and beyond.

“Users are sensitive to brands trying to muscle into what appears to be an organic social media environment,” says Nick Thomas, an analyst at Forrester Research. “Yes, I want to learn how to cook something, but do I necessarily want to be taught by someone who makes the ingredients?”

Howcast’s team of young executives argue that they can tap-dance along that fine line by making sure that any branding effort is in a supporting role, rather than a starring one, in its instructional videos.

They are even forging relationships with the State Department as it looks for ways to use social networks and other media to communicate directly with people around the world. Among the videos they’ve produced for it are “How to Protest Without Violence” and “How to Launch a Human Rights Blog.”

Howcast executives are also quickly signing deals with the likes of Google, Facebook and Hulu to spread their videos across the Internet.

“Being a media company today means you can’t exist inside a walled garden, just driving traffic to your own site,” says Jason Liebman, 33, Howcast’s chief executive. “You have to produce the content, distribute it all over the Web, develop the technology — all of which is hard to do. But you need to do everything in order to be successful today.”

SITTING in a stifling office loft in the SoHo neighborhood of Manhattan, with a couple of air-conditioners chugging away in vain, Jeffrey Kaufman runs through the topics that are particularly popular on search engines these days. The list includes werewolves. And manboobs.

Mr. Kaufman is the head of programming at Howcast, and is supposed to have his fingertips on the nation’s pulse through proprietary data-mining tools and information gathered from search engines.

Mr. Kaufman chalks up the werewolf craze to the coming movie “New Moon,” the second installment of the popular “Twilight” vampire series, based on the books by Stephenie Meyer.

Why manboobs? Everyone in the small room shrugs.

Then they have to figure out a how-to video spin on the topics (How to make a werewolf costume? How to get rid of manboobs?). The final consideration is whether the subject will attract advertisers or, better yet, a corporation would pay to have its product or service appear in the video.

The how-to category is big and growing, but extremely fragmented. And while Howcast, whose Web site is just 17 months old, is watching its traffic soar, it lags far behind eHow and About.com (owned by The New York Times Company), according to Hitwise, a research firm.

Howcast says its videos were played more than 20 million times last month across all of its distribution network, including YouTube and Apple’s iPhone. What may give Howcast a leg up on its competitors is the fact that the company is creating a library of high-quality content that could command higher ad rates, says Allen Weiner, an analyst at Gartner, the tech research firm.

To help viewers navigate through the 100,000 videos on its site, Howcast divides them into 25 broad categories — such as technology, travel and food and drink — and then slices and dices those into smaller segments.

Viewers can rate the videos (a video teaching how to pick a lock rates disturbingly high). Videos on sex and relationships are among the most watched at the Howcast site. No. 1 is “How to Have Sex in a Car,” followed by “How to Use Twitter” and “How to Kiss Like Angelina Jolie.” (Ms. Jolie is not in the video; it features two women in their underwear kissing on a bed.)

Mr. Liebman, the executive overseeing this start-up, seems somewhat embarrassed about this playlist. He prefers to talk about the Howcast videos that are the most popular across all the sites that distribute the company’s content, including “How to Quit Smoking” and “How to Do the Moonwalk.”

Mr. Liebman was bitten by the start-up bug when he was 16 and started a newspaper — “it was profitable,” he says — for New York prep school students. In a 1992 article in The Daily News, he was described as the “picture-perfect model of the Privileged Prepster.”

After graduating from Duke with a degree in political science, Mr. Liebman migrated to Wall Street, where he spent some time as an investment banker in leveraged finance. Watching the dot-com run-up on the West Coast, however, he wanted to join the party. He packed his bags and took up residence on his twin sister’s couch in Los Angeles.

A couple of months later, he landed at a software start-up called Applied Semantics. There, he worked in sales and capital-raising while also overseeing a team of engineers that developed AdSense, software that matched advertisements to related content or text on a Web page. AdSense had been on the market for only a few months when, in 2003, Google acquired the company in a deal valued at $102.4 million. Mr. Liebman returned to New York to work from Google’s offices there.

Much of his time at Google, particularly after the 2006 acquisition of YouTube, was spent persuading sometimes stubborn media companies to post clips of their shows or movies on its site.

Other members of the Google video team included Daniel Blackman, a sales and business development executive with a broad background in digital media, and Sanjay Raman, an M.I.T. graduate who started his first software company in college and later was an analyst at Morgan Stanley.

Over time, the group noticed a surge in search traffic for instructional videos at Google and YouTube.

“We were seeing user-generated content getting millions and millions of hits,” Mr. Blackman says, “and it would be nothing more than a guy in his dorm room showing you how to tie a tie with a simple Webcam.”

The growing interest in how-to videos parallels what happened in the early days of video, says Mr. Weiner, the Gartner analyst.

“Things like the Jane Fonda video that showed people how to exercise was a big blockbuster,” he notes.

Other sites were building business models around simple instructional homemade videos, but Mr. Blackman and his team saw flaws in their strategy.

The quality of footage and content was uneven. The pedigree of the individual “experts” was unclear. And advertisers sometimes balk at homemade videos, citing concerns about who owns the rights to the content, Mr. Blackman says.

The three friends left the comfortable confines of Google in May 2007 and set off on their own.

Most large venture capital firms are loath to back start-ups without seeing some content or a mockup of the site. So Howcast’s founders bankrolled the company’s first batch of videos, producing them on the cheap.

For that, Mr. Liebman invited his twin sister, Darlene Liebman, to come on board as another co-founder. Ms. Liebman had spent a decade in television and film, working on shows like “Nash Bridges,” “Queer Eye for the Straight Guy” and video clips for Nickelodeon.

Ms. Liebman’s marching orders were to create 400 how-to videos in two months.

“That’s like boiling the ocean; I thought he was absolutely insane,” Ms. Liebman said. They set up a small studio in the back of their office and called on family, friends and even employees to appear in some of the early videos.

Another one of Mr. Liebman’s sisters, a dermatologist, was enlisted for a video on how to spot skin cancer. The company also sought out local experts, bringing in the head chef from the restaurant Sushi Samba for a video on how to make sushi.

To build its library even faster, Howcast started offering aspiring filmmakers $50 to shoot two- to three-minute videos. The practice continues: Besides getting a chance to show off their skills to a large audience, they also get a percentage of the ad revenue if their video is a hit.

The videos produced by Howcast follow a set format, using quirky music, graphics and voiceovers, which make the videos easier to translate into different languages. Howcast even built its own media player with slow-motion and zoom-in features.

With the company’s beta site running, Mr. Liebman started hunting for venture capital last fall. Thanks in part to the résumés of the Howcast founders, they quickly raised $10 million from the Tudor Investment Corporation and tech insiders like Tim Armstrong, who was recently named chief executive of AOL, and Jason Hirschhorn, recently named chief product officer at MySpace.

“What we liked was the fact that there’s endless content,” notes Kevin Law, a former music executive who is now an investment consultant to Tudor and serves on Howcast’s board. “There’s a how-to that can go along with any service, any product.”

Building up a library of content is relatively easy, says Rupert Ashe, the chief financial officer of Videojug in Britain, which went live in 2006 and now has 100,000 how-to videos.

“The thing that is difficult to get and takes many, many years to build up is a following and traffic to the site and a place in the search-engine constellation,” Mr. Ashe says.

The space hasn’t yet seen a “mega-breakout site,” says Mr. Thomas of Forrester Research. But over time, he says, one or two sites will inevitably emerge as dominant players, and many others will fade away.

IN the middle of last year, the food company Nestlé noticed a peculiar spike in complaints from consumers in a Middle Eastern country about the taste of one of its products, the instant coffee Nescafé Gold.

After some sleuthing, the company discovered that people in that country — Nescafé wouldn’t say which one — didn’t understand how to make its instant coffee. They were making it like traditional ground coffee, said Rakan Brahedni, a new-media relationship specialist for Nestlé in Dubai.

Mr. Brahedni, who says he had “fallen in love” with Howcast’s site, particularly its cooking videos, was already in discussions with the start-up to add videos to Nestlé’s Web site.

So Howcast quickly produced a video showing how to make Nescafé Gold. The graphics, subtitles and voiceover were done in both English and Arabic.

“This was very much out-of-the-box for us, and now we’re seeing a lot of excitement from other brands” inside the company, Mr. Brahedni says. The video will soon appear on a Nescafé Web site, and Howcast will distribute it to some of its partners.

In this light, Howcast may look like more of an advertising agency than a media company. Unlike pricey ad agencies, however, that can charge hundreds of thousands of dollars for a 30-second advertising spot, Howcast produces videos for corporate customers at a fraction of that cost. Its executives say this is its entree into big corporate ad budgets.

And they argue that they are still sticking with their primary focus: to create instructional content.

When JetBlue Airways planned its inaugural flight from Kennedy Airport in New York to Los Angeles International earlier this year, it turned to Howcast to create videos for the occasion.

The result was a series of clips, including “How to Stay Fabulous When You Fly Coast to Coast,” featuring Delphine, a leggy Ford model with her own YouTube following. The video can be found on numerous sites, including Yahoo, AOL, MySpace and Metacafe.

JetBlue executives say they are thrilled with the response from the spots and plan to work with Howcast again. “What Howcast offers is something that is very cost-effective and very targeted,” said Morgan Johnston, a JetBlue spokesman.

Howcast executives see opportunities beyond corporate America. They’re hoping to get more work from the federal government.

So far, they’ve worked mostly with the State Department in its “Public Diplomacy 2.0” initiative to use new media to communicate, says James K. Glassman, a former under secretary of state for public diplomacy.

“What we saw in Iran is that the private sector played a very important role in disseminating information there,” Mr. Glassman says. “Companies like Twitter and Facebook facilitated a lot of the activity in Iran.”

In April, Mr. Liebman traveled to Iraq with a delegation from several tech companies on a trip arranged by the State Department to offer guidance on how new technologies could be used in the country. Howcast is also working on a project for the Defense Department.

Mr. Liebman says the company is willing to “turn over lots of different stones” in its search for profits.

HOWCAST enjoyed a break-out moment earlier this year, thanks to a five-second cameo appearance as one of the featured applications in a television ad for the iPhone. Downloads for Howcast’s iPhone application jumped from around 1,000 a day to 24,000 at its peak.

People who download Howcast.com onto their iPhone spend an average of 12 minutes on the site each time they visit, twice the amount of time spent watching from their computers, says Mr. Raman, Howcast’s head of product development. “That tells me that this is going to be a huge platform for us,” he says.

In the meantime, Howcast is exploring ways to distribute its content on other mobile devices and developing features so customers can buy items they see in the clips.

The company will probably need to do another round of financing in coming months. But Mr. Liebman is projecting that Howcast could be profitable by late next year.

If he’s right, the company could become the star of a new instructional video: “How to Create a Profitable Start-Up.”

Copyright 2009 The New York Times Company

ST: Bookshops on site

July 12, 2009

Bookshops on site

Local entrepreneurs are taking on Amazon and Bookdepository in selling books online By Stephanie Yap

Think online bookstore and Amazon.com is likely to be the first name that springs to mind. The American behemoth has loyal customers even here in Singapore, thanks to the deep discounts it enjoys from its suppliers, which translate into savings for buyers even when the exchange rate and international shipping are taken into account (see sidebar).

Another online giant with international reach is the UK-based Bookdepository.co.uk, which sweetens the deal by offering free international shipping for all items - yes, even to Singapore.

Still, that has not deterred entrepreneurs here from having a go at online book selling.

One of the newest entrants on the scene is Opentrolley.com.sg, which was launched in May last year by Indonesian-born Singapore permanent resident Mazmur Andreas and boasts more than 1.5 million titles.

Mr Andreas, who is in his 20s, says he spent a year before the launch sourcing for book suppliers and creating the website.

He has two full-time staff and a cousin who helps with the accounts.

'Our vision is to be the largest bookstore in Singapore and later South-east Asia, hopefully, with millions of titles at great prices. Our target is to include as many book suppliers as possible, whether located in Singapore, Asia, UK or the US, and hence offering our valued customers as many titles as possible.'

He declined to reveal his start-up cost but said he used his savings and got some help from his parents.

He says he has 3,500 registered customers, who found his site through online ads and referrals, and has actually seen a 15 to 20 per cent increase in sales during the recession, which he attributes to penny-pinchers looking for better deals.

'In good times, people don't mind spending more on books, but during a recession, people are trying to conserve cash and reduce spending, so they look for a cheaper alternative,' he says.

'The fact that we do not store inventory allows us to reduce inventory risk and damaged goods, eliminate expensive rental in downtown malls and also minimise staffing costs. These savings are passed to our customers in terms of lower book prices every day.'

OpenTrolley's delivery time is between one and two weeks from the date of purchase, but Mr Andreas says he hopes to reduce it to six to 10 days by the end of this year. Amazon.com promises 18 to 32 days for standard shipping to Singapore while Bookdepository.co.uk promises seven to 14 working days.

Those who want to save on the $4.98 delivery charge can even opt to collect their books in person at OpenTrolley's partner store Toy Outpost in Plaza Singapura. Customers pay $2.80 for this option, $2 of which will be refunded if the customer goes to pick up the order within seven days of being notified.

Meanwhile, a veteran of the local online bookstore scene is Acmamall.com, which was founded in July 2000 in Singapore and Malaysia.

It has since extended its book selling operations to Brunei and plans to go into Australia. It sold approximately 8,000 books in the region last month and has about 40,000 registered customers in total.

It also expanded its inventory last year to include non-book items such as beauty products, DVDs and pet food, which can be delivered to 10 countries, including Australia and New Zealand.

However, book sales still make up about 55 per cent of the store's total revenue.

Acmamall's chief executive officer Christopher Quek, 31, says it decided to diversify its product line due to 'a large amount of requests from our regional customers who like our services, free deliveries and ease of use', adding that many of its customers live in small towns in Malaysia and Brunei where bookstores are few and where shipments from the West can take as long as four to five weeks to arrive.

Acmamall offers free delivery if a customer spends $80 and above per order and delivery time is between four and 12 business days.

The store also has a regional tie-up with HSBC credit cards, which offers a 32 per cent discount on books to customers in Singapore, Malaysia and Brunei.

This month, the store is also offering a 25 per cent discount for purchases of five or more books.

But sometimes, it is not just about bargains. Price aside, Mr Quek says Acmamall stays competitive against brick-and-mortar stores due to the wide range of titles it is able to offer.

'Acmamall.com sees itself not as a major competitor to bookstore chains, but rather a complement to them. Acmamall's niche strength is in its selection of one million book titles. A major bookstore, no matter how big, will be able to hold, possibly, only up to 200,000 titles,' he says.

ysteph@sph.com.sg

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FT: The town that Wal-Mart built

The town that Wal-Mart built

By Jonathan Birchall

Published: July 10 2009 23:09 | Last updated: July 10 2009 23:09

Wal-Mart Store No. 1, opened in Rogers, Arkansas in 1962

There’s country music on the radio, from KAMO-FM, the country legends station. The air smells of a green and early summer, and black-and-white cows graze in the meadows alongside the road. The car windows are open as I drive through Healing Springs, no more than a handful of ramshackle farm buildings next to Osage Creek, named after the Indians who once hunted here.

And then, suddenly, there’s a pseudo-Victorian gas lamp and a faux 17th-century French gatehouse – the entry to the Beau Chalet residential development. Welcome to north-west Arkansas. On the right, a handful of men in polo shirts playing the 14th hole of the Shadow Valley Country Club golf course. “A master planned community”, says the sign. On the left, a battered, two-storey farmhouse badly in need of paint, with chickens wandering free. The sign here, hand-painted, simply reads “Jones’s”.

Further down the road, you see another surreal outbreak of Victorian lampposts and cast-iron street signs. But here, there are no houses – only grassy plots and surveyors’ stakes: a suburb in waiting. In fact, all the fields out here seem to be for sale, all the way past the Church of Christ to the automatic gates of the St Valery Downs development (continuing the French theme) and Lochmoor Club (discontinuing it).

My road turns right, to pass the shiny new Waterway Church, offering “coffee house” worship at 9am. And then I see what I’m after: a green placard announcing my arrival in Bentonville, Arkansas, population 28,621.

Late last year, this was the point where a man we’ll call Tim pulled off the road. He had recently been recruited to work at Wal-Mart, the world’s largest retailer, which was founded in Bentonville and still has its headquarters there. Tim’s new job came on the heels of years working in Japan, Singapore and Korea. When he saw that sign, he told me, the change he was making hit him. Sitting in their car on the side of the road, he said to his wife: “I don’t think I’m going to be able to do this.” And she said: “You know, you’ve worked in all those different countries – just think of this as another country.” He turned on the engine again and kept driving.

Sam Walton’s original store, now Wal-Mart’s visitors’ centre

When Wal-Mart’s founder, Sam Walton, opened a five-and-dime self-service general goods store on the main square of Bentonville in 1950, the administrative seat of Benton County had only 3,000 people. It was “just a sad-looking country town, even though it had a railroad track to it”, according to Walton’s wife, Helen. Sam died in 1992, Helen in 2007. Meanwhile, Wal-Mart has expanded into 14 countries, and its revenues have grown to more than $400bn in 2008, well over $1bn a day, making it the biggest non-oil company in the world (Exxon Mobile and PetroChina are the biggest and second-biggest groups). And, as the recession hits home, Wal-Mart has only grown stronger, its ultra-low prices for food and other basics luring more shoppers to more than 4,200 US stores.

In the 19th century, Andrew Carnegie’s steel shaped Pittsburgh. In the 20th century, Henry Ford’s motor cars remade Detroit. Now, in the hills of the Ozark plateau in Arkansas, Wal-Mart’s retail power is carving out the 21st-century version of opportunity in a virgin land – a new Jerusalem funded and shaped not by industrial production, but by global shopping.

. . .

I’ve been covering Wal-Mart as part of my beat for the FT since 2005, and I usually fly from New York in a commuter jet that takes just over three hours to arrive at the Alice L. Walton terminal building – named after Sam’s daughter. Before the airport opened in 1998, with funding and support from Alice, visitors to Wal-Mart’s HQ who didn’t have a plane of their own came via Tulsa, 125 miles away. Now there are direct flights not only to New York but to Washington, Chicago, Las Vegas and Los Angeles.

Allyn Lord, director of the Shiloh Museum of Ozark History in Springdale, a few miles south of Bentonville, says that the rest of America still jokes about Arkansas and hillbillies and intermarriage, “but they have no idea”. While Wal-Mart stores have expanded from covering 91 million sq ft in the US in 1990 to more than 840 million sq ft globally, the region’s population has doubled, from 200,000 in 1990 to more than 400,000 today. An interstate highway now connects the area’s four small cities – Bentonville, ­Rogers, Springfield and Fayetteville – and together they are also home to J.B. Hunt, one of the biggest US trucking companies, and Tyson Foods, the world’s largest processor of chicken, beef and pork.

When I first visited Bentonville four years ago, I stayed in a new hotel on a hill surrounded by building sites. They have now all produced buildings. “This is the biggest single development in mid-America,” claims Bill Schwyhart, founder of the Pinnacle Hills development, named after the adjacent Pinnacle Country Club, the area’s most luxurious residential community.

Schwyhart is a big man with big plans and big friends. One business partner, Bob Thornton, set up Wal-Mart’s first distribution centres. The late J.B. Hunt was one of his investing partners. His newest partner, Jim Phillips, is a telecoms entrepreneur excited about bringing nanotech and “green collar” environmental businesses to the area, attracted, he hopes, by Wal-Mart’s embrace over the past three years of “sustainability” targets such as zero-waste stores and a reduced carbon footprint.

Schwyhart moved from California to north-west Arkansas in 1977 to run a Buick car dealership. “The state motto on licence plates back then was ‘Land of Opportunity’. And I was all about opportunity and business,” he says, in an office where the decorations include a bronze statue of a cowboy on a bucking bronco and a reproduction of a Greek hoplite’s helmet – bought on a church trip to the Mediterranean that followed the steps of Saint Paul.

The opportunity turned out to be Wal-Mart. In the 1980s, Schwyhart persuaded David Glass, who eventually succeeded Sam Walton as the retailer’s chief executive, to try out six of his Buicks rather than the Fords Wal-Mart was then leasing. He ended up leasing more than 10,000 cars to the company, formed a business partnership with Thornton to launch a BMW dealership, and one thing led to another.

Vast crosses mark the Pinnacle Hills Baptist Church, Rogers, Arkansas

Schwyhart talks about the multi-million-dollar investments that have flowed into Pinnacle Hills with a salesman’s aplomb: the $95m hotel overlooking the $50m convention centre – “the largest ballroom between ­Dallas and Chicago”; the new, $150m Mercy Hospital; the Pinnacle Hills Promenade “lifestyle centre”, an open-air shopping mall. Also on the site are buildings to house some of the 1,100 local offices of companies that sell to Wal-Mart: Kraft, Johnson & Johnson, PepsiCo, Coca-Cola. And next to a Coke bottle sign overlooking the highway stand three giant concrete crosses for the recently completed Baptist mega-church at Pinnacle Hills.

Sam Walton, or Mr Sam as Wal-Mart’s low-paid workers used to call him, styled himself as a frugal Ozarker and cracked down on ostentatious displays of wealth by his top executives. He drove a battered Ford truck and hunted quail with his dogs. When Walton was declared America’s richest man in 1985, a photographer snapped him having his hair cut for a few dollars at the local barber shop.

Now, at the Pinnacle Hills Promenade shopping centre, BMWs are lined up outside the storefronts of a pseudo Main Street – what Schwyhart calls “our Rodeo Drive”. “Look at the girls walking their little dogs,” he says proudly as we cruise past leggy women in shorts. “You could be in New York.” Mainstream 21st-century American materialism is in full flow here – Coach, Sephora, Banana Republic. Easy-listening music plays on the mall speakers. The whole development is surrounded by giant parking lots.

It’s modern, it’s new, and it could be anywhere – or at least anywhere in the US with money. And that’s the way it was planned. “When the architects first came down here, they told us they were spending a few days in the country around here, getting a feel for things, and the local buildings and so on,” says Schwyhart. “And then they came up with the plans… it was kind of a hillbilly look. We said ixnay to that. We wanted ­something world-class and cutting-edge. The people who move here move from cosmopolitan cities, and we want them to find here what they had there.”

After my conversation with Schwyhart, I went driving again and met Larry Bonds, out on Rainbow Road. His farm is about two miles from ­Pinnacle Hills, and a few miles more from Wal-Mart’s “Home Office” in Bentonville, in an anonymous warehouse. Bonds was preoccupied with a different kind of cutting edge from Schwyhart’s, mowing a small, steep pasture next to his farmhouse. I was back in Arkansas. There were barking dogs outside the front of the house, where Bonds’ mother was tending her vegetable garden, and ducks and chickens. Bonds was wearing a white, straw cowboy hat and denim overalls. We chatted over the fence.

I explained that I was here for “shareholders” – everyone here knows what that means. Wal-Mart’s annual meeting starts at 7am one morning every June – maintaining the rural tradition of early rising – in the Bud Walton basketball arena (named after Bud, Sam’s brother) at the University of Arkansas’ Fayetteville campus. It includes not only shareholders but about 15,000 Wal-Mart employees from across the country and the globe, from Shanghai to Leeds to São Paulo. They cheer and chant through a surreal mix of company pep talks and appearances by music and film stars. Over the years, I’ve seen performances by Beyoncé, Jennifer Lopez, Queen Latifah, Joss Stone and Ben Stiller – all at around eight in the morning.

Magnificent new houses have been built to accommodate the influx of great wealth into north-west Arkansas

Bonds was born on the farm, one of six children. When he was young, the family had 185 acres and 150 head of Holstein dairy cattle which they milked in a wooden barn built in 1898. The farm is now down to 40 acres, and his family keeps eight cattle for beef. They sold some of the land to the city when it opened the adjacent water-treatment plant and some to the Pinnacle Club. “That’s all houses and a big golf course over there,” he says as he gestures across the road towards the club, where local magnates and executives live in $10m mansions.

When he was young, Larry used to go into Bentonville to shop at Sam Walton’s five-and-dime store. “If you went into the store for something for Mother’s Day or something special, Sam would always make sure you had enough money for what you wanted. Whatever the actual cost.” But Bonds is not all he appears: he spent 20 years as store manager for Wal-Mart in Phoenix before retiring home. “Yeah. It’s all changed,” he says, a little glumly. “I think it was better back then. Everyone knew everyone. You couldn’t go into town without meeting people you know. Now, every person is in a rush. No one communicates.”

Allyn Lord at the Shiloh museum says of the locals here: “These are people who are very close to their family, to their God, and to the land.” But the rural isolation of the Ozarks, she admits, has had its downside. In the small Bentonville town square, the 1908 monument to “The Southern ­Soldiers”, funded by the United Daughters of the Confederacy, is a reminder of the area’s white history. The national headquarters of the Ku Klux Klan is still in north-west Arkansas, 100 miles from Bentonville. In another Ozark moment, the American Nazi party has managed to sponsor litter clearance on a length of highway over the state border in Springfield, Missouri.

The US Census Bureau estimates that less than 2 per cent of the Benton county population is black – compared with a national average of 12 per cent, and 15 per cent for ­Arkansas as a whole. But the local area does now have a significant Hispanic population – about 15 per cent in the county – thanks to an influx of immigrants seeking work, principally in the region’s chicken-processing industry. “I personally think the diversity is great,” says Lord. “But that is clearly not the case for everyone, especially for communities that have been exclusively white for many years.”

. . .

During “shareholders”, crowds of Chileans, Mexicans or Brazilians spill out of buses into the Bentonville town square, but Wal-Mart and its vendors have also brought a new permanent wave of migrants that reflects the cultural mix of the rest of America. A Wal-Mart employee played a big role in launching Bentonville’s first synagogue, set up in 2004 in a former Assemblies of God church. In a bid to increase local understanding, the community invited a local radio station to report on its first bar mitzvah. A menorah to mark the Jewish festival of Hanukah is now included in the Christmas display outside the Benton County Courthouse.

A few blocks from the city square, a modest wooden former residence now houses the Bentonville Islamic Center. Five years ago, Bentonville had only a handful of Muslims, who worshipped in a private home. There are now more than 100 mosque members, with cars filling the front yard during the Friday Juma’a prayers. “I would say 95 per cent of the people here work at Wal-Mart ISD [Information Services Division],” says Mohammed Naseer Khan, the president of the mosque and himself a Wal-Mart employee. Another mosque member says he likes the low crime rate in Bentonville, and jokes that the county ban on the sale of alcohol at stores – a legacy of Christian abstemiousness – makes it “really quite orthodox”.

In the city square, there’s even an outbreak of urban chic going on, centred on the new Table Mesa restaurant, serving Latino food with a fusion American twist. It was opened last year by Lindie and Carl Garrett, who arrived from Seattle, Washington. “We designed it to bring something of that Seattle metropolitan feel here,” says Lindie, a South African.

The steady flow of Wal-Mart money is bringing in more than restaurants. A few blocks from the old town square, cranes looming over the trees mark the future site of the Crystal Bridges Museum of American Art. Designed by Moshe Safdie, an Israeli architect, it is expected to open sometime in 2011. The museum should be “a major driver of change,” says ­Sandra Keiser Edwards, the associate director. It will be based around donations from the collection of Alice Walton. (On Forbes magazine’s most recent list of the 400 richest Americans, Sam Walton’s heirs take up four of the top seven positions. Alice is in sixth place, following her brothers Jim and Rob and ahead of Christy, the widow of John, who died in 2005.) Alice’s collection includes paintings by Asher Durand, Winslow Homer, Charles Willson Peale and Marsden Hartley.

The museum will have a special focus on local education, with classrooms and a library built into the plans. But Edwards also likes to talk about the economic opportunities that the museum will bring, such as the boost to tourism, and to “recruitment and retention” by the big corporations based in the area – not so different from Carnegie and Mellon funding the museums and universities of Pittsburgh to create their own version of Athens amid the steel mills.

. . .

Unlike the shopping centre architects whom Schwyhart “ixnayed”, Safdie has designed a glass and wood building that is meant to “capture the interplay of nature, art and culture in the region”. “It’s a celebration of place,” says Keiser Edwards, who sees the area as facing a challenge: “Our job now is to plan a future that continues to make this part of the US very special… a feeling of being in a neighbourhood, a community.”

The museum will be remarkable. But I always find it hard not to be hit by the irony in this Bentonville Renaissance. Wal-Mart’s football-stadium-sized supercentres are, after all, the epitome of the chain store culture that has destroyed small town centres and homogenised communities all over America in the past three decades.

There’s not much time for ironic reflection in ­Bentonville. The current recession has slowed the previously breakneck speed of growth; house prices are down, and there are far too many office spaces and hotel rooms on the market. General Growth Partners, the national mall developer behind ­Pinnacle Hills Promenade, is being restructured after declaring bankruptcy.

But like any good US real estate development, people are looking ­forward, and the search is on for a new name to embrace the suburban sprawl that is gradually uniting the four small cities of Bentonville, Rogers, Springdale and Fayetteville. “The fact that we are becoming an entity is being talked about,” says Keiser Edwards, at the art museum. “Directional names, such as north-west Arkansas, don’t mean much if you don’t know what it’s north-west from.”

Ozarkadia? Norwesark? Waltopia?

Whatever they call it, the signs are that it won’t be like rural Arkansas for very much longer. “People don’t want Arkansas where they live and shop,” says Schwyhart. “If they want Arkansas, they can get in their cars and go for a drive.”

Jonathan Birchall is the FT’s US consumer correspondent.

Copyright The Financial Times Limited 2009

Foodie is a hero! Nia Nia Nia!

Heh :)

NY Times: The Question of Leftovers, Ever Fresh

July 8, 2009

The Question of Leftovers, Ever Fresh

By HENRY ALFORD

LIKE many things located at the intersection of obligation and potential pleasure — music recitals, family outings, the theater — leftovers are a source of complicated emotion. Just ask Diana Abu-Jaber, a novelist who once wrote a memoir told through food, “The Language of Baklava.”

At a party she held at her house in Portland, Ore., in 2001 to celebrate her marriage, two of her neighbors brought her a gift: a Mason jar with a jaunty red bow on it. “It seemed to contain chunks of some sort of appalling turgid brownish oozing cake,” Ms. Abu-Jaber said. It came with a note of explanation that read: “This half loaf of zucchini chocolate bread was a (failed) experiment. But maybe you will like it. Happy marriage!”

“To this day, we marvel at whatever might have possessed them to pass that on to us,” Ms. Abu-Jaber said.

We think of leftovers with special frequency during a recession because they represent our efforts to be economical. Frugality may be a virtue, but there is no denying that when it comes to leftovers, people get a little nutty.

That some foods, but not all foods, are more flavorsome the day after they’re made doesn’t seem to simplify matters. As Ms. Abu-Jaber put it: “Lots of dishes improve with time, and leftovers can be the sweetest sort of offering. They imply that you share a home-style friendship, that you aren’t company, but family. But sometimes leftovers are just that — the stuff no one wanted to eat the first time around.”

The complicated emotions can persist even when there’s no cooking involved.

Annabelle Gurwitch, a host of the eco-living show “Wa$ted” on the cable network Planet Green, got a call from a neighbor in early May asking for the rest of the Irish cheese from Costco that the neighbor had left at the Gurwitches’ house in Los Angeles four nights earlier. So the next morning Ms. Gurwitch’s husband drove to the neighbor’s house, dutifully returning custody of the eight ounces of cheese.

“I did feel odd giving it back,” Ms. Gurwitch said. “I felt like it was ours now.” But revenge was soon hers: a week later, dining at the cheese-revoking neighbor’s house, Ms. Gurwitch absconded with a loaf of bread that she hadn’t even brought.

In some instances, the inherent virtuousness of dispensing the world’s uneaten foods seems to fuel, if not provide rationalization for, some odd behavior.

Natasha Lehrer, an editor and writer, explained that when her mother and aunt were studying at, respectively, Oxford and Cambridge, their father, George Webber, a law professor at University College London, regularly mailed his two daughters the legs from his and his wife’s roast chicken. On Friday nights, he would wrap the legs in aluminum foil, put them in envelopes, and then pop them into the mail on his way to synagogue on Saturday morning.

“He was the Jewish mother of the family, my grandmother failing to fulfill the role,” Ms. Lehrer wrote in an e-mail message. She added that her mother ate the contents of her strange and bulbous care packages but that her aunt did not. “There is some truth to the notion that my mother was the obedient daughter (ate the leg), and her sister the rebel (threw it away).”

In other instances, the unusual leftovers-inspired behavior is motivated less by a neurotic compulsion to dispense than by a dogged attempt to deplete.

Clément Gaujal, a customer quality representative for Nissan who grew up in Paris, recalled that his mother had a tenuous grasp of batch size when it came to lentils, and often ended up serving their leftovers for three or four days in a row. So, after buying a small notebook filled with graph paper, Mrs. Gaujal started a lentils diary: she and her husband and four sons would chronicle how the lentils were prepared at each meal, how much was eaten by various members of the family, what was discussed during the meal, and, of course, what percentage of the offerings were left uneaten. Any family member not in attendance at any given meal was the subject of mild, legume-based ridicule.

Whether it takes the form of harassing (Ms. Abu-Jaber’s neighbors), stealing (Ms. Gurwitch), smothering (Mr. Webber) or snickering (the Gaujals), the way we deal with leftovers can say a lot about who we are.

As Marvalene Hughes, now the president of Dillard University, wrote in her essay, “Soul, Black Women, and Food,” one reason leftovers are so prominent in black American culture is because most of the foods that are labeled soul food, from chicken backs to ham hocks to oxtails, were once foods that white slaveholders deemed undesirable and gave to their slaves. “The survival-oriented black woman trusts her creative skills to ‘make something out of nothing,’ ” Dr. Hughes wrote. “She acquired the unique survival ability to cook (and therefore use) all parts of everything.”

Which may help to explain the presence of a phenomenon that Steven Thrasher, a freelance writer, has noticed. Mr. Thrasher, whose mother was white and whose father was black, finds it curious that in black American culture, “you’re kind of expected to not only send people home with food, but be stockpiled with industrial-grade take-home containers.”

Readers of Patti LaBelle’s cookbook, “LaBelle Cuisine,” may remember one of that book’s more fraught passages: “It’s not rational I know, but I have a serious thing about my plastic containers. I will give you the food off my stove and shirt off my back, but not my Tupperware! That I want back!” And she went on: “People think I’m kidding when I tell them they have to return it within a week, but I’m not. Just ask my niece Stayce. A month after I’d sent her home with several containers of food, she still hadn’t brought them back. I called her up and had a hissy fit. I must have fussed at Stayce a good 10 minutes before I realized she was crying.”

Where, in the leftovers department, are we headed as a culture? The past may shed a light on the future of this culinary idiom. As an article in Time magazine last fall pointed out, ancient humans stored foodstuffs in cool, dark caves; the Greeks and Romans collected snow and ice from mountains. By the 19th century, deliveries of ice for iceboxes were common in America; in the 1920’s and 1930’s refrigerators started showing up in American homes in large numbers. The ’40’s brought Tupperware; the ’50’s, Saran Wrap; the ’60’s, Ziploc storage bags; the ’70’s, the first affordable home microwave ovens.

From damp caves, all the way to microwave ovens: the progression is one of increasingly rarefied and manufactured innovation. This trajectory was encapsulated in a dinner that the novelist Heidi Julavits attended in Maine a few summers ago. A friend and artist named Jetsun Penkalski invited Ms. Julavits — along with her husband, the writer Ben Marcus, and another writer named Oisín Curran — to his house in Surrey for a dinner whose theme was to be guessed by the three guests.

“What followed was a lot of very strange food with strange stuff done to it,” Ms. Julavits wrote in an e-mail message. “For example, one course was served with little toasts mangled with the scalloped edge of a cookie cutter.” For another course, Mr. Penkalski fried shrimp coated in egg white, arrowroot and sesame seeds, and then mashed it up with a reduction made of the shrimp shells, and smeared the whole thing across his guests’ plates.

Ms. Julavits guessed the theme about a half-hour into the proceedings: “Turns out the concept was that the whole meal was supposed to have appeared to have been made with leftovers.”

Far more labor-intensive than a regular meal would have been, Mr. Penkalski’s dinner, he said, was “deconstructed,” in honor of the fact that all three writers at his table were practitioners and enthusiasts of deconstruction in literature. The tension usually present when leftovers are served to guests — not to mention the harassing, the stealing, the smothering and the snickering — was neatly dodged by virtue of the meal’s utter unpredictability and painstaking preparation. Best of all, the smeary, mangled repast earned that highest form of praise: there were no leftovers.

Copyright 2009 The New York Times Company

FT: E-retailers find big brands hard to touch

E-retailers find big brands hard to touch

By Samantha Pearson

Published: July 7 2009 20:32 | Last updated: July 7 2009 20:32

Hawaiian shirts and white jeans are all the rage, teenage girls are queuing up for Boyzone CDs and the first Austin Powers film is out on VHS. At the height of the dotcom boom in 1999, internet enthusiasts were saying it would not be long before all this was bought only online.

Anyone with a computer and something to sell, they said, had a good shot at taking market share away from the big brands.

But progress has been slow and the reality is proving a little different.

In 2004, analysts predicted that a quarter of retail spending would be made online by 2009.

Now some are saying it will only be 10 per cent by 2013. And in the main, it has been the well-established retailers that have profited from the rising popularity of internet shopping, rather than the brash newcomers.

Tesco, Next, Argos, HMV, B&Q and J Sainsbury are among the top 20 most visited e-retailers in the UK, according to the Interactive Media in Retail Group (IMRG), the trade body representing internet retailers.

Online start-ups such as Boo.com, a fashion retailer, and Cyberian Outpost, which sold discounted computers, that were founded in the boom soon fell victim to the dotcom crash.

Spurred on by optimism among cyber-retailers, they expanded quickly and aggressively, leaving themselves unable to offer a reliable service.

Shoppers have also been more cautious than expected in their approach to the internet, preferring to buy from brands they already know and trust.

Maureen Hinton, lead analyst at Verdict, a retail consultancy, said: “The trust that you have in brands still needs that physical engagement to begin with and so [online retail] is more of a complimentary channel than a supplementary channel.”

She said that it was the success of well-known brands, coaxing shoppers online, that had also allowed the success of the few purely online retailers that have established themselves, such as Amazon and Asos, the fashion site.

Firebox co-founder says London tops for start-ups

One of the most successful British pioneers of online retail insists that London, not Silicon Valley, is the best place to run his businesses, writes Jonathan Moules.

Michael Smith, who co-founded gifts and gadgets website Firebox.com, one of the few survivors of the British dotcom crash 10 years ago, travels several times a year to the US west coast for business.

However, he maintains that he has no plans to move Firebox or his new venture Mind Candy – an online gaming company – across the Atlantic.

“London is a fantastic place to grow,” Mr Smith says, noting that it now has the right “ecosystem” of lawyers, accountants and wealthy individuals keen to invest in start-up ventures.

“One of the reasons I live in London is because there is this great entrepreneurial community.”

Mr Smith lives with two other web entrepreneurs in Soho, which is handy for the almost daily round of parties that their peer group throws.

“If I go to an event or party I am still buzzing from the day and I love chatting to friends who are in a similar position.”

Culturally, however, the UK still has a way to go in its appreciation of those who start companies, Mr Smith says.

“In the US, entrepreneurs are feted as rock stars.

“We are a little bit more hard.”

Schoolboy dreams grow up

But not all of the sector has embraced cyberspace with the same enthusiasm.

It is fifteen years since the first secure online transaction took place and some big high street names such as Zara, the fashion chain, still have no online shop.

And in spite of reporting surging internet sales of clothing and homewares, Marks and Spencer has no plans to sell its groceries online.

On the other hand, Sainsbury’s, which launched it’s online grocery shopping site in 1997, said: “The online channel has always been an important part of Sainsbury’s business.”

James Roper, IMRG’s chief executive, said: “The online stuff comes down to mindset and some management teams seem to get it and some just haven’t.” However, he said even those who “got it” had often struggled to “get it right”.

Over the past two years, customers’ overall satisfaction with internet shopping has decreased.

According to an IMRG survey, the number of customers who are satisfied with product range and price competitiveness has fallen by about 3 per cent over the last eight quarters.

Sainsbury said: “As the online channel grew, initially customers were enticed by the fact that online shopping was new and tolerance to failures in customer service was high. As the channel has matured, however, customers’ demands and standards have increased dramatically.”

Aside from dealing with more demanding customers, the success of online retailers has also depended on the delivery companies upon which they rely.

According to a study by PwC, 26 per cent of online shoppers said they would spend more on the internet if the delivery service was better and goods were delivered to their homes at more convenient times.

Nick Robertson, chief executive of Asos, said: “The holy grail of internet is about choice and a single basket.”

He says that shoppers making impulse purchases want rapid delivery and the chance to return the item if necessary. Given that fashion is the biggest category in online retail, making up 22 per cent of all site traffic for e-retailers, flexible delivery is key.

However, Brian Gaunt, chief executive of Home Delivery Network, one of the biggest delivery services outside the Royal Mail, said that parcel companies were capable of providing the services that customers wanted, but were preventing from doing so by retailers keeping costs low.

An attractive and interactive website is also key to getting shoppers to buy more than they had intended to.

While retailers themselves complain that there is not enough web talent to go around, ATG, the e-commerce consultant that helped set up Tesco’s website and the recently-launched Woolworths site, said many retailers failed to take the internet seriously enough.

“The biggest mistake retailers make is that they see their online business as a separate business from their offline business. They don’t apply the same efforts or energy,” said Frank Lord, ATG’s vice-president for Europe.

Websites, like the traditional shops on the high street, need to be refitted and rejuvenated continuously to keep luring customers back.

And the recession has been the best advertisement for investing in online retail. While most high street chains have recorded hefty sales and profits declines, almost all have said their online business has fared better.

The high street will not be left vacant. According to Verdict’s Ms Hinton, in the future it is likely to resemble a row of showrooms where shoppers browse before ordering online instore – a model similar to that already used by retailers such as Argos and Mothercare.

Copyright The Financial Times Limited 2009

FT: Joys and perils of a partnership

The best partnerships are based on mutual respect, complementary skills and aligned objectives. 

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Joys and perils of a partnership

By Luke Johnson

Published: July 7 2009 20:26 | Last updated: July 7 2009 20:26

I have worked with partners my entire business career. For me, it has always been preferable to share the journey than to direct affairs as a sole trader. Perhaps I have made less money than I might have but I believe the experience has been more fun, and I’ve got involved in far more projects than I could have working alone.

A partner helps relieve the loneliness of being the boss and the stress of judging risks. While firms cannot function as democracies, pure dictatorships are vulnerable to all the whims and failings of an individual personality: overreach, emotions, limitations and favouritism.

The easiest partnership is a 50/50 deal, each contributing the same capital and effort, and starting at the same point in the life of an enterprise. But such arrangements may well not be feasible or fair. Often one party has more cash or time or know-how, or has already initiated the operation.

Either way it means the partnership will not be equal, but that should not undermine its success. The best partnerships are based on mutual respect, complementary skills and aligned objectives.

Most partnerships have a life span. My old colleague at PizzaExpress, David Page, reckoned the typical set-up lasts 10 years; I think it varies according to the circumstances.

The trigger for the dissolution is usually the sale of the joint undertaking. Frequently, one side has the urge to continue the chase, while the other wants to sit back and enjoy their wealth.

Sometimes it is death, divorce or simply diverging priorities that lead to a break-up. As with marriage, ideally such partings are not rancorous; but envy and festering resentments mean bitterness and litigation can flare up when things finish.

There are many talent pairings. I like the combination of an accountant and a salesman (or woman). Other great teams can comprise smooth negotiator and hard nut (Mr Nice and Mr Nasty) or a brilliant creative brain matched with a first-class commercial mind. So often the prime mover is an inventor of some sort, while the partner brings street smarts or finance, or simply energy and confidence.

Curiously, when hiring high-level staff companies, will undertake extensive referencing and even psychometric testing to ensure the candidate’s suitability for a post. But who carries out such rigorous analysis when going into partnership with someone? All too often, we fall into business with someone because we enjoy their company, or because we are friends. But the best qualifications are that a person is competent and reliable in business matters.

How on earth do partners meet? I came across my partner Gary in the early 1990s when I tried and failed to buy his recruitment business; I met my partner Paul when I invested in the retail company he ran.

William Hewlett met David Packard when they both played for the Stanford football team. Charles Rolls, the aristocratic motor trader, met the engineer Henry Royce through a mutual friend called Henry Edmunds at the Midland Hotel, Manchester, in 1904.

Often it seems that the way prospective tycoons come together is almost random. There should be a high-profile online introductory service that precisely marries up would-be partners in business. Surely there is demand for such a tool.

Partnerships are most vital when times are tough. There is no substitute for being able to discuss confidential affairs in detail with a colleague of equal rank and understanding. Advisers, subordinates, spouses and friends are simply not as likely to be as engaged – or as honest.

For many entrepreneurs, forging a partnership defeats the purpose of working for yourself. It means you cannot control your own destiny to the same degree and take the same level of pride, credit and creative satisfaction. But most of us accept we have shortcomings, and realise that an equity partner will try harder and bring more to the relationship than any employee.

Very few of us have the genius of a Henry Ford or Sam Walton: for us, a partnership is one big way to improve the odds.

lukej@riskcapitalpartners.co.uk
The writer is chairman of Channel 4 and runs Risk Capital Partners, a private equity firm

Copyright The Financial Times Limited 2009