Cameron Johnson's Blog

$23 billion, what a nice round number.

So, the Mars company and Warren Buffett are buying Wrigley for $23 Billion bucks.  That's a lot of gum!

I love this deal for what it is NOT:  No ultra-complex sub-prime mortgages that will explode in 5 years, no gambling on brand-new untested technology that may or may not be next big thing, no "flavor of the day" celebrity must-have.  It's a solid deal because it's about proven, time-tested products and companies.

Warren Buffet is famous for this; he just simply buys stock in companies that he A) understands, and B) believes in.  He's become the world's richest man by following that philosophy, so I'm betting this will prove to be another of his smart moves. He likes good companies at a discount, who doesn’t?

Keep that in mind when you're thinking about your own great ideas:  Is this something that a potential customer (or investor) can understand, or are there too many complexities to explain it to someone in an elevator?

That's the tricky paradox involved in many entrepreneur success stories; taking a new approach to a proven product or service to give people a familiar & established "widget", but doing it in a way no else had considered before. Many of my ideas have been very simple ones, yet they’ve also turned out to be very lucrative.

Wrigley: 100 Years later, the same things build success.

With the Wrigley sale in the news, I've done some reading on the company's beginnings. What impressed me the most was how the practices that made William Wrigley Jr. his fortune over a 100 years ago are the very same ones that are front and center in the successful marketing efforts of today.

Have a look at the story behind the gum.  Here are a few things that jumped out at me:

Quote:  "Several times the young company was on the verge of going under, but hard work overcame the difficulties, and the business forged ahead."

All of us go through tough challenges as we try to find the right road to our goals, Wrigley was no different.  And, as anyone who has made it will tell you, those two words "hard work" are more often than not the key to beating the obstacles. 

Quote:  "He had a gift for seeing his customers' point of view and accommodating himself to their needs."

Brilliant. I’ve always said business is more common sense and less rocket science. He didn't try to force an unwanted product on his customers, he listened to them, and gave them what they were asking for.  Something I didn't know: The gum started out as just a give-away while he was selling baking powder.  He latched on to the demand for the gum outweighing the demand for the baking powder and...you know the rest.

Quote:  "He saw that consumer acceptance of Wrigley's gum could be built faster by telling people about the benefits of the product through newspaper and magazine ads, outdoor posters and other forms of advertising. Then, as more and more consumers began to ask for and buy Wrigley's chewing gum in the stores, the storekeeper would naturally want to keep a sufficient stock of Wrigley brands on hand."

An excellent example of "pull" marketing, about 80 years before the term was invented! Young entrepreneurs are exciting even 106 years later!

Tools of the trade

Not only has the internet opened up an unlimited world of opportunities to start your own business with just about zero risk, it's also filled with services that can make the mechanics of being an entrepreneur easier than ever.

Not everyone is an expert in marketing or manufacturing.  Luckily, there are some great sites out there that can take over some of the more time-consuming, non-billable work for you.  Take for instance that most exciting of tasks- Accounting!

Knowing where you are with cash-flow and staying on top of monies owed to you is key to keeping your business moving, but too many people let this part of the business slide because they are so busy fulfilling the opportunities they're generating.  You can lose money because you're too busy making it to keep track of it.

There are a number of spots on the web that can help out in this regard, one of them is Blinksale.  With very little set-up time, you can be generating, recording, & tracking invoices securely online.  There is a great range of optional services that you can add if you see fit, so you can do anything from send out a few simple manual invoices a month, to setting up  hundreds of auto-recurring invoices.  Blinksale can link with Paypal to make the payment that much more fluid, ie. fast.  You can store, categorize, & reference all of you invoices and see at a glance what's been paid and what's still pending.  And the best part- for the simpler option, it's free.  You can try it out with 3 free invoices a month to get a feel for it, and upgrades from there are pretty reasonable when you consider how much paperwork it removes from your life.

As with everything, shop around.  Blinksale is one of a number of services, but it's a good one to look at if you're spending too much time chasing post-it notes around your office and wondering if you've actually received any of that hard-earned money.  

XM + Sirius

It's appearing that they might be able to finalize something. In a former post I noted that this may not be the best for both companies. They both need more customers and to cut content expenses, and it appears a merger might accomplish both. After today's NY Post article however, they estimate it would save the two companies a combined $7 billion per year. If this is the case, then it's a no-brainer that these two must merge in order to succeed.

UPDATE: done deal - press release

Airline Pricing - Post #2

UPDATE - I booked the United flight last night, as any sane person would do. After posting my previous blog post on that experience, I decided I'd follow up and check pricing again. Here are the results of that search:

• Last night you'll recall it said "4 tickets remaining at this price!" - Today, it says the same thing: only 4 tickets remaining (even though I booked one last night). The price has changed from $255 to $254.
• I then looked to see how many seats were available. As of right now, there are 31 seats on the Orlando to Charlotte flight and 8 seats on the Charlotte to Roanoke flight.
• Being that there were only 8 seats into Roanoke, I figured this is why the price was $255 (hence, it should be dirt cheap MCO to CLT since they have 31 to sell with 8 days to go). So I searched for just Orlando to Charlotte (skipping the connection into Roanoke) and the flight was $258. So it's cheaper to fly on 2 of their planes and into Roanoke, than just 1.

So airline pricing is screwed up. And as I'm writing this, I realized I just wasted 20 minutes because this isn't anything we didn't already know. I see it several times every month. Regardless, I thought you'd find this interesting...

Airline Pricing Confuse You?

I've done a lot of research into airline pricing and even in my book I talk about some of Delta's and US Airways' problems. On an earlier blog post I discussed how terrible it would be for the consumer if Delta and US Airways merged. It's a commonly known fact that Delta and its partners (Continental mainly) often piggyback flights. Same goes for US Airways and United. I'm speaking in Orlando next weekend and had to book a return flight. Look at the screenshot below and decide for me if I should book the $255 seat or the $420 seat. Note: it's the same plane, and it's up to me if I'd rather pay $255 or $420.

>>> And we wonder why these airlines are in trouble. I normally fly Delta so I checked their pricing for flights at the same time and their price was $678. They had 23 seats left. If Delta has 23 seats to sell with only 8 days to go and they're pricing them at $678, good luck. Why are they so clueless?

NY Times Transitioning Away from Print

I came across an interesting article on Drudge about the NY Times transition from print to online. My favorite part:

Given the constant erosion of the printed press, do you see the New York Times still being printed in five years?

"I really don't know whether we'll be printing the Times in five years, and you know what? I don't care either," he says.

Sulzberger is focusing on how to best manage the transition from print to Internet.

>> Read the full article here

Microsoft/Ford Sync - OnStar Killer?

In early 2000, Ford's then-CEO Jacques Nasser said, "Go back 100 years, Henry Ford put the world on wheels. Today, Ford Motor Company will put the Internet on wheels." Ford's stock price was $64 a share and the company was one of the most profitable corporations in the world. He was announcing plans for a new telecommunications system called Wingcast which was being built in partnership with Qualcomm and was set to debut 18 months later. Ford ultimately invested more than $100 million into the project before scrapping it and selling the remains for a mere $10 million. Pretty terrible. A lot has changed since then, especially Ford's stock price and profitability.

GM continued their plans and launched OnStar which is still not profitable, but at least it made it somewhere. Well Ford's back, and they've got a new partner: Microsoft. The new Sync will debut later this Fall in 2008 models and looks quite impressive:

http://www.syncmyride.com/

Head to Head: Ford vs. Toyota

Ford's advertising continues to plague the company. Their ads have been part of the problem for years. Recently, it's not the design - and most definitely it's not the quality. Ford still has the best selling vehicle in America (F-Series), the best-selling SUV (Explorer), the best-selling sports car (Mustang), and now they're really starting to gain traction with the new Fusion. The Fusion is the only car in its class that even offers AWD, not Camry and not Accord. Consumer Reports just named Fusion more reliable than Camry and Accord. This is huge and shows progress in the right direction. This is what Ford needs to tell their customers and tackle the competition head on....just like this ad:

The Light Bulb Summit

Large corporations are always desperate for some positive press. Wal-Mart succeeded at that this week with an article in the NY Times about their new light bulb initiative. To reduce energy consumption across the country, Wal-Mart will begin a push on compact fluorescent bulbs. The subject isn't too exciting so you can read the article for yourself but they definitely succeeded this week with positive press for their efforts. Unlike Exxon being accused of misleading the public by spending millions to manipulate public opinion on the severity of global warming. Although the best news this week relates to my post yesterday on Bob Nardelli's departure from Home Depot. I think everyone was glad to see him go, including Bob himself as he takes his $210 million package with him.