How Netflix Creates ‘Taste Communities’

Wired: “The Defenders provides Netflix with a unique case study. Instead of merely allowing it to find out if someone who likes, say, House of Cards also will like Daredevil (yes, BTW), it tells them which of the people who landed on Daredevil because of House of Cards will make the jump to The Defenders.”

“Wildly different programs lead people to The Defenders’ standalone shows. The top lead-in show for Luke Cage? Narcos. But for Iron Fist, it’s a Dave Chappelle special. Someone who watches Jones probably will watch Cage, but beyond that the groups of people—Netflix calls them ‘taste communities’—gravitating toward those shows enjoy very different programming.”

“Every Netflix user belongs to three or four taste communities. It’s easy to say that this influences what appears in your recommendations, but it’s not quite that simple. Membership in those communities does more than dictate the top 10 comedies appearing in a row of your queue, it determines whether comedies appear there at all … Each time you open Netflix it exposes you to 40 or 50 titles. Netflix considers it a win if you choose one of them.”

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Serenity Kids: Paleo Baby Food

Quartz: Serenity Kids is “marketing a line of liquid baby food that has the highest meat content of any pouched baby food. It hit the market this month. Meals include liquified uncured bacon with organic kale and butternut squash, chicken with peas and carrots, even beef with kale and sweet potato. The product is sold in packs of six 4-ounce pouches for about $27.”

“As a concept, the diet is comprised of food that would have been available to Paleolithic humans‚ which includes non-processed foods that could be found by foraging or killing animals for meat. That means no dairy, no grains, and definitely no Little Debbie Oatmeal Creme Pies.”

“Designing such a diet for very young children hasn’t come without controversy … Health officials considered it a risk because there was fear children would miss out on important nutrients during a critical stage. Complications down the road could mean poor growth and a weaker immune system, among other things … As of early August, Serenity Kids pre-sold 1,800 pouches. As of now the company is selling the food online, and hopes to be in grocery stores within the next year.”

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LVMH: A Winner in Real-Life Retail

Axios: “LVMH, the French conglomerate and owner of brands Louis Vuitton and Sephora, had a 15% rise in first-half 2017 revenue, and that did not come by running fire sales — profit was up 23% … LVMH’s success is a reason for traditional retailers to despair as much as hope. The secret behind LVMH’s success is near total control of products from conception through manufacturing and sales, the opposite strategy of traditional mass-market retailers that largely act as middlemen and little more.”

“Next to Louis Vuitton, LVMH’s most important brand is Sephora, the beauty retailer that has been gobbling up market share in the $22-billion cosmetic retail industry. Customers interviewed by Axios raved foremost about the in-store experience, with freely accessible samples of any product absent any interaction with a salesperson. If shoppers want help, these customers say, Sephora’s staff is knowledgable and eager to find them the right look.”

“LVMH is demonstrating one formula for making a success of brick-and-mortar retail. That does not mean it can rest: Even high-flying luxury retailers like Louis Vuitton must constantly innovate as e-commerce matures and offers more products and more ways to buy them.”

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Blue-Corn Pixza Helps Homeless Kids

Fast Company: “For every five slices of blue corn pizza sold at Pixza, a piece of paper denoting a sixth slice is set aside. Once a week, those slips are counted up, and the corresponding number of slices are made and brought to a nearby homeless shelter, where Pixza representatives–many of them who once lived in the shelter–distribute them to the youth and have a conversation about Pixza’s program, and how it could lead to a job offer at the pizzeria.”

“Next, the youth are set up with a haircut, a shower, a T-shirt, a doctor’s appointment, and a life-skills course; Souza has set up partnerships with local hairdressers, medical students, and doctors who volunteer their services to the program. When the youth make it through all of the steps–their progress is recorded via a bracelet in which each step is hole-punched as it’s completed, like an analogue Fitbit–they are offered a job at Pixza.”

“Once employed at Pixza, the youth are matched up with a dedicated coach, who walks them through life planning and securing necessities like housing … The youth and mentors meet at Pixza during closing hours to plan: how to use the two-month stipend doled out to the kids to help them secure an apartment, how to source furniture, how they might want to direct their career beyond the pizzeria.”

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Aledade: A Silicon Valley ‘Healthcare’ Solution

Farhad Manjoo: “The American health care system is a fragmented archipelago, with patients moving through doctors’ offices and hospitals that are often disconnected from one another. As a result, many primary care physicians — who often see themselves as a kind of quarterback who calls the shots on a patient’s care — have no easy way to monitor a patient’s meandering path through the health care system.”

Software developed by Aledade, a Silicon Valley startup, “addresses that by collecting patient data from a variety of sources, creating a helicopter view. Doctors can see which specialists a patient has visited, which tests have been ordered, and, crucially, how much the overall care might be costing the health care system … More important, the software uses the data to assemble a battery of daily checklists for physicians’ practices. These are a set of easy steps for the practice to take — call this patient, order this vaccine — to keep on top of patients’ care, and, in time, to reduce its cost.”

“Yet even though Aledade thinks of itself as a technology company, its doctors said its software is the least interesting thing it does …
Aledade — which now operates in 15 states and has relationships with more than 1,200 doctors … It has hired a battalion of field coordinators who visit practices and offer in-depth training and advice.”

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Novo Oh-No: ‘New & Improved’ Doesn’t Sell

The Wall Street Journal: “Danish drug giant Novo Nordisk is living through a corporate nightmare that any CEO might recognize from business school. After the company concentrated on making essentially one product better and better—and charging more and more—customers have suddenly stopped paying for all that improvement. The established versions are, well, good enough.”

“Doctors, health-plan managers and insurers all have balked at paying for Novo Nordisk’s newest version of its insulin. Clinical trials show it works as promised in controlling diabetes and delivers significant side benefits compared with its predecessors. But for many customers, all that isn’t enough to warrant paying more—because the older drugs on the market already work pretty well, too.”

“Common, deadly ailments, such as asthma, high cholesterol and heart disease, were the focus of the pharmaceutical industry during a golden age of drug launches in the 1990s. Now, building on those advances has proven costlier and more complex, and usually results in smaller gains. Incrementally improved medicines are harder to sell at the prices needed to cover their development costs.”

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Applebees: What Is (not) Hip

Quartz: “It turns out, Applebee’s perhaps isn’t cut out to be a sophisticated, modern bar with a menu that sports chicken-wonton tacos and Sriracha lime sauce shrimp. Since the beginning of the year, the company’s stock price has plummeted by nearly 50%. It’s currently sitting at its lowest point in more than five years.”

“In a recent conversation with investors, Applebee’s executives were blunt about what went wrong. They called out the brand’s overt attempt at attracting a younger, affluent crowd as a strategic misstep that wound up alienating boomers and Gen-X consumers. Even worse, the rebrand never succeeded in luring younger diners.”

“By contrast, Texas Roadhouse made a conscious decision to avoid a rebrand and found success. It stuck to its straightforward menu, designed for those who enjoy the routine of sticking to the same dishes.”

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Digital Scale Cuts Ikea Food Waste

Fast Company: “By the end of August 2020, Ikea wants to cut its food waste at its stores–both in its restaurants and in its smaller bistros serving cinnamon buns, hot dogs, and soft serve–in half. At the heart of this plan is a digital scale. Whenever employees in Emeryville (CA) toss food waste from the kitchen into a bin, it now records the weight of the food. On a touchscreen mounted on the wall above the bin, employees quickly record what type of food was lost, and see feedback about the cost of that food and the carbon footprint. Over time, the patterns in the data will help the company make changes.”

“Ikea began piloting its new food waste system in 2015, and began rolling it out to stores in December 2016. By May 2017, it had launched in 20% of its stores, reducing nearly 80,000 pounds of food waste and saving the company more than $1 million. It’s now in the process of rolling it out to all of its 400 stores, which serve 650 million customers a year.”

Andrew Shakman, CEO of LeanPath, makers of the digital scale, comments: “The moment you start measuring with technology you begin to change awareness levels and you cause people to start to think differently. Whereas in the past they could just throw something in the garbage, now they have to stop and for a moment; they have to record something about it. In that moment, you’re not just collecting data, you’re communicating your values.”

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The Spotted Cheetah: A Cheetos Restaurant

The Wall Street Journal: “The Spotted Cheetah, a pop-up restaurant specializing in dishes made with Cheetos, has sold out all of the roughly 300 reserved slots for its three-day run, say officials with PepsiCo ’s Frito-Lay division that makes the snack … Spaces were gone within six hours of last week’s announcement of the opening, officials said, adding that there is currently a waiting list of more than 1,000 people should anything become available.”

“The Cheetos restaurant, helmed by celebrity chef Anne Burrell, will feature several varieties of the snack in close to a dozen dishes … Menu items, priced from $8 to $22, include Cheetos meatballs, Cheetos grilled cheese with tomato soup and Cheetos-crusted fried pickles. There are even desserts made with Cheetos, albeit the Sweetos variety of the snack.”

“Ms. Burrell, a fixture on the Food Network, said the challenge was to ‘elevate’ Cheetos, but not get too fanciful. ‘There’s a fine line to walk,’ she said.”

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David Chang & The Dropped Napkin Theory

Quartz: “Chef David Chang’s restaurants are pilgrimage sites for foodies from Sydney to New York. But the founder of the Momofuku restaurant group recently disclosed that he gets inspiration on kitchen management from a US fast-food chain where a double cheeseburger, fries, and a drink together cost less than a small plate of pea shoots at Chang’s Momofuku Noodle Bar in New York.”

Chang comments: “Every time I go to In-N-Out, if there’s time permitting … I stay there until I see one of the employees drop something. ‘Cause it’s always so busy. They drop something, they don’t know they drop something, and then someone else picks it up. Let’s just say they dropped a napkin. They pick up the napkin. They don’t go, ‘Hey jackass, you dropped this,’ like most people would do. They pick it up, they don’t say anything.”

“Previous research has found that organizations that show concern for employees’ development and welfare have higher levels of productivity and job satisfaction. Unhappy workers make more mistakes, have more accidents, and are more likely to be absent. One key to maintaining happiness among the rank-and-file is to ensure good behavior at the top of an organization. Researchers have found that employees are more motivated to help co-workers when they see people in leadership positions going out of their way to do the same.”

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