Tesla: When The Story is the Company

The New York Times: “Tesla is not a stock, or a company, that is measured by the past …Tesla is about nothing if not a utopian future of safe, reliable, powerful, self-driving electric vehicles powered by solar-fed batteries that are easy on the environment. In that regard, Tesla has ascended into a rarefied realm of so-called story stocks — companies that have so bewitched investors that their stock prices are impervious to any traditional valuation measures because their stories are simply too good not to be true.”

Also: “Amazon and Snap both have stories that are compelling for many investors: Amazon has transformed retailing and is destined to dominate it. Snap is reinventing communication, at least for millennials and those even younger. Early investors in Uber and Airbnb, though they remain private companies, have valued them at stratospheric multiples based largely on the notion that Uber will transform and dominate local transportation and Airbnb will revolutionize the hotel industry.”

However: “For every Tesla or Uber, there’s a Valeant Pharmaceuticals or Theranos — two story stocks that seduced an astounding array of prominent investors and supporters based on stories that did turn out to be too good to be true.”


Tribeca X: Rewarding Brand Storytelling

The New York Times: “The Tribeca X Award “looks to reward the best ‘storytelling’ from brands working with artists and filmmakers. It drew 600 entries in its second year, triple the number from last year, showcasing the growth in a subtle type of marketing that aims to reach people who are tuning out of traditional commercials.”

“Apple, for example, sponsored a 13-minute documentary about a mountain-climbing Bangladeshi woman that happened to be shot entirely on an iPhone 6s. Another finalist: an eight-minute film from the mobile payments company Square, telling the story of a Syrian refugee’s dreams after his move to Tennessee; the man is a small-business owner and customer.”

Jae Goodman, a Tribeca X judge, comments: “It’s the same elements that make it a great, great story, that touches you, that sparks the right emotion, that gives you the same great response that an Oscar-winning movie would give you. However, it also needs to drive those brand and business results. If Coca-Cola makes a great feature film and doesn’t sell more Coca-Cola, then that’s a failure on Coca-Cola’s part.”


Pie Face: A New Era in Toymaking

The Washington Post: “Pie Face, a game in which a dollop of whipped cream is served up from a plastic “throwing arm” to someone who has positioned his face in its path … was the single best-selling item in the games category in 2016 and the fourth best-selling toy overall, according to market research firm NPD Group.”

“Pie Face is a symbol of a new era in toymaking, one in which social media is allowing the industry to marshal you, the everyday shopper, to become a product’s most powerful advertiser. And its mega-popularity has helped fuel a flurry of action from toymakers to create games that offer a ‘shareable moment’ — a brief visual morsel that parents and grandparents will post on Instagram or Facebook and that teens will put on Snapchat or YouTube. It’s a new breed of toy that can’t just be fun for players in real time. It has to be demonstrative. Performative, even.”

“Social trends go boom and bust at warp speed, and so toymakers say that they have to move at a breakneck pace to capitalize on them. Such was the case with Speak Out, another Hasbro creation. In this game, players wear a mouthguard-like plastic mold that stretches their faces to look cartoonish and makes it hard to talk. Players must say a phrase to a partner and get them to guess their garbled words. The idea for it was sparked by Web videos of people putting in dental mouthpieces and getting the giggles when they tried to speak clearly.”


Dyson: The Apple of Appliances?

The New York Times: “Not many consumer electronics brands would spend almost two decades — and tens of millions of dollars — building a vacuum cleaner that retails for more than a top-of-the-line laptop. But combining an almost obsessive eye for design and engineering, the privately held Dyson has cornered the nonglamorous market of high-end vacuum cleaners, lights and hair dryers — and in the process bucked the technology truism that companies rarely make money in the difficult arena of hardware.”

“Dyson has shown an uncanny ability to mint money. Its latest robot cleaner, which is selling briskly, exemplifies that and puts Dyson in rarefied company alongside Apple as one of the few tech companies worldwide to consistently profit from consumer gadgets Dyson is moving beyond vacuum cleaners, hair dryers and air purifiers. The company said it would spend more than $2 billion on battery technology, machine learning and other high-tech wizardry to create new products, many of which remain under wraps behind tight security at its headquarters.”

“At Dyson’s headquarters … prototypes were covered in tarps while large areas of the open-plan offices were off limits. Photographs of engineers’ computer screens were prohibited, and machinery in some of the research labs was obscured with black trash bags.” Mario Cosci of Dyson comments: “It’s a little like a brainwashing atmosphere. When you work every day with people who are driven, you can’t swim against it.”


Uber Economics: Managing Driver Behavior

The New York Times: “Even as Uber talks up its determination to treat drivers more humanely, it is engaged in an extraordinary behind-the-scenes experiment in behavioral science to manipulate them in the service of its corporate growth … using psychological inducements and other techniques unearthed by social science to influence when, where and how long drivers work.”

“To keep drivers on the road, the company has exploited some people’s tendency to set earnings goals — alerting them that they are ever so close to hitting a precious target when they try to log off. It has even concocted an algorithm similar to a Netflix feature that automatically loads the next program, which many experts believe encourages binge-watching. In Uber’s case, this means sending drivers their next fare opportunity before their current ride is even over.”

Uber spokesman Michael Amodeo comments: “We show drivers areas of high demand or incentivize them to drive more. But any driver can stop work literally at the tap of a button — the decision whether or not to drive is 100 percent theirs.”


Netflix & the ‘Tinderization’ of Feeling

Tom Vanderbilt: “Netflix, as you may have heard, is … shedding its former one-to-five-star rating system in favor of binary digits: namely, thumbs up or thumbs down … For one, Netflix was transitioning from a DVD rental business to a streaming company. It was less reliant on you telling it what you liked (via ratings), because it could already tell what you liked — simply by analyzing what you had watched.”

“And there tended to be a gulf between the two behaviors. People rated aspirationally, but they watched situationally. Yes, you did give That Important Documentary five stars when you got around to watching it, but at the end of a trying day at the office, you more often settled on viewing some pleasing pap like The Ridiculous 6 … Another reason for Netflix’s shift from stars to thumbs is that … even when people are given star-rating options, the responses, as research has shown, tend to cluster in the one-star and five-star endpoints — serving as a de facto thumbs up or down.”

“The Netflix move seems another example of what Alicia Eler and Eve Peyser, in an essay in The New Inquiry, call ‘the tinderization of feeling.’ The dating app Tinder, they argue, ‘is a metaphor for speeding up and mechanizing decision making, turning us into binary creatures who can bypass underlying questions and emotions and instead go with whatever feels really good in the moment.’ In a world of vastly proliferating consumer choice, it is small wonder we should turn to the quickest, most primitive gestures to express judgments.”


Walmart vs. Amazon: Race to the Bottom

Recode reports “a high-stakes race to the bottom between Walmart and Amazon that seems great for shoppers, but has consumer packaged goods brands feeling the pressure … One piece of the battle, executives say, is an Amazon algorithm that works to match or beat prices from other websites and stores … it finds the lowest price per unit or per ounce for a given product — even if it’s in a huge bulk-size pack at Costco — and applies it across the same type of good on Amazon, even when the pack size is much smaller.”

“That is a great deal for customers … But now, Amazon is selling individual items at Costco prices while not getting the same wholesale price that Costco enjoys. When Walmart sees this, it freaks out on the supplier … And it doesn’t matter to Walmart that Amazon may not be getting the same wholesale price that retailers like Costco or other membership clubs receive. In other words, even if Amazon isn’t profiting from its extremely low prices, Walmart is still demanding the same bulk-rate discount applied to individual items.”

“The longest-term solution … is perhaps the most difficult: Reimagining how a product should be designed and packaged from the ground up, specifically for e-commerce sales. That often means cutting the weight of low-price goods since shipping costs tend to eat into a product’s profitability.”