There's a local coffee shop in my neighborhood. They make great coffee and particularly excel at driving customers to their doorstep. Some will argue that it's the coffee that keeps people coming back for more. Single-origin, fair-trade, and organic coffee does sound delicious. But this shop doesn't operate in a silo. In this area, a large market exists for high-grade specialty coffee. There are plenty of people who can afford it and are willing to go the distance to get their fix. So you better do a damn well job at it.
It's not just the coffee that sells, it's the experience. Amazing coffee is just one (very important) outcome of several carefully crafted inputs and outputs. There's also the genuine service you receive from the baristas. When someone walks through those doors, there is instant feedback: "Hey Steve, how are you!?" or "What's going on? Same as usual?". This is not an assembly line with a pre-conceived notion of what defines best customer service practices. What does it matter if someone Sharpies my name on a cup, only to forget my existence as soon as my order is fulfilled?
Great coffee is served in a complementary setting. In this particular shop, there is a sort of craftsmanship on display. Beautiful wood countertops, soft lighting, curated music, and a sense that at least in here, there's something special going on. Outside might be the cold and unforgiving morning. Walk through these doors though and you can forget about your cares. The rich aroma of fresh-brewed coffee, people holding conversation, a communal drug slowly making its way around the room.
At the same time, the experience is all-pervasive. Take a trip around town and you'll find a peculiar sticker staring you back in the face. It's a hologram-like graphic of a black crow on a white background. There is no text: no company name, no telephone number, email address, website, or special offer. What about new customers, you ask? How will they know where this sticker came from, and what does it mean?
Already, you have your answer.
The owner of this shop says that in the past 3 years, they've distributed more than 10,000 stickers. No one pays for them. Show up to any location and you'll be offered one for free. "It's not advertising," the same owner suggests "but a sort of brand recognition." A relatively cost-effective way of getting their face in front of people. People pay to participate. Because if you're not in on it, you don't get it. But everyone wants to be part of something great. Are you experienced?
Thursday, June 27, 2013
Friday, May 31, 2013
The future of education is bright
Yesterday, Coursera announced
that it plans to partner with 10 new universities in providing
educational content via its web-based platform. The announcement is
significant because it marks the first time partner-schools will use
Coursera's Massive Open Online Courses (MOOCs) to improve upon existing
content for current students rather than just dumping a course online
for mass consumption. This move comes on the heels of a letter
which has sparked much debate among higher education circles. The
letter, authored by members of San Jose State University's philosophy
department, questioned the efficacy of adopting a blended course offered
by Harvard's edX at SJSU.
Coursera's announcement may help assuage the concerns of those professors who warned that adopting wholesale this educational model will create a system of "two classes" where the top-tier schools remain vigorously well-funded at the expense of teetering sub-standard public and private institutions where either state funds evaporated or the prestige factor is less compelling. Participating schools, some of which include the University of Colorado System, the University System of Georgia, and the State University of New York (SUNY), will have the ability to create and distribute content that is aimed at complementing and not necessarily replacing existing curriculum.
Atransformation retooling of education
When thinking about higher education, it's important to consider outcomes. That is, what is the quantifiable result of someone receiving a university schooling? Are students graduating to become productive members of society? Indeed, there is a clear economic advantage afforded those who earn a college degree and those who don't. This earnings-potential premium is reflected in numerous studies which, despite underemployment among recent graduates, has remained constant over time. So, how will these outcomes be affected by changes in the quality of education provided? This is a difficult question because there is a high degree of uncertainty regarding what defines a high-quality education.
There is a tendency among both professors and students to assume that online education is either haphazard, insufficient, or lacking real value. Professors complain that online content removes the human element from the equation -- personal interaction, instant feedback, and customized Q&As. Some fear losing those indescribable moments of enlightenment when two (or three or more) minds work together to arrive at a consensus of thought. Others bemoan the highly informal way online courses are delivered to people in their pajamas or students simultaneously watching a video lecture while Facebook chatting their friends.
From an institutional perspective, to suggest that the sustainability of higher education is somehow compromised by the introduction of online content is exaggerated. What are MOOCs really providing? A substitute for a rich, interactive college experience? Probably not. The amenities afforded enrolled students are too wide in breadth and scale to replicate on a computer screen. No one can seriously suggest that a discussion board will serve the same purposes as a face-to-face meeting. Yet what these courses can provide is increased access to high-quality educational content, better allocation of resources, and rich opportunities for data collection and analysis.
Access is imperative. Are we already losing what we've gained?
Moving forward, one of the key determinants of MOOCs' success or failure will be their openness. Already billed as "massive and open," MOOCs have helped deliver knowledge to people without preference for socioeconomic factors or sovereign borders. The Internet's capacity to flatten (or more appropriately disregard) formal barriers between peoples has coincided with the growth of information distribution on an unprecedented scale. How open will these courses remain? Already, we are witnessing carefully coordinated attempts to monetize this space. As with newspapers throwing up paywalls, this is somewhat reactionary. Yet how will this affect those most likely to benefit from free entry?
In theory, education should be non-exclusive. Thomas Jefferson once said that "knowledge is the common property of mankind." Information wants to be free. In practice, however, information is a scarce and highly guarded resource. America's founding fathers envisioned universities as "temples of knowledge." Yet over time education, like many other public goods, was reinterpreted as a for-profit enterprise with good intentions. Now, crowded lecture halls are not necessarily a market failure. On the contrary, a highly educated society is desirable. Demand is simply outpacing supply. What clearly needs fixing is the increasingly unrealistic cost of obtaining an education.
Missing from the MOOCs debate is what effect it's having on the global citizen. As more people come online across the world and Internet access is expanded to include new populations, open and accessible knowledge will shower untold benefits on the world's un- and undereducated. Obviously, there are limitations; backward-looking countries and Big Brother states will always find ways to erect walls or taper the velocity of information. But in places where information is allowed to flow freely, a convergence of standards will help educators across international borders align their teaching know-how in a way unimaginable in modern history.
The data doesn't lie
Perhaps one of the brightest prospects for MOOCs is the ripe potential for data collection these online courses will provide. Every time a class is administered, there are thousands of data points worth tracking at both the micro and macro level. Best of yet, the data is provided in real-time so there is less of a risk that an instructor will find out 30 percent of his/her students failed after the fact, or students will get their grades back wondering why they received a 'B' instead of an 'A.'
Consider that when students fail to understand a particular component of a teacher's curriculum, in the brick-and-mortar classroom this is difficult to identify due to either time constraints or students' fear of asking "dumb questions." Yet when we shift gears to online content, thousands of students have the ability to voice their concerns instantaneously (and hopefully anonymously), providing a venue for clarification, peer-to-peer discussion, and real-time temperature gauging.
On a micro level, data will not only help teachers respond proactively but also provide new insights about teaching methods. Maybe it's discovered that students perform at a higher level when beautiful visuals complement traditional video lectures. Another way to think about this is not every student learns new information in lockstep. Different content delivery formats cater to different individuals' learning styles. In the middle of a video lecture, a student might run into trouble answering a certain question (sometimes referred to as "retrieval"). With calibrated algorithms, a student can be posed a second (or even third) question tailored in a way that fits that student's learning profile.
Looking at this on a macro scale, MOOCs have the ability to act as a sort of invisible hand, clearing away the content which fails to provide tangible benefit and focussing attention on what really matters. As more students sign up and (importantly) complete these courses, universities will learn where to direct their resources, what subjects are in high-demand, what teachers are worthy of their pay scale, and what the educational landscape really looks like. This isn't so much "market-based" as it is reality-based. The best teachers will not go unnoticed and the brightest students will find what it is they're looking for.
Coursera's announcement may help assuage the concerns of those professors who warned that adopting wholesale this educational model will create a system of "two classes" where the top-tier schools remain vigorously well-funded at the expense of teetering sub-standard public and private institutions where either state funds evaporated or the prestige factor is less compelling. Participating schools, some of which include the University of Colorado System, the University System of Georgia, and the State University of New York (SUNY), will have the ability to create and distribute content that is aimed at complementing and not necessarily replacing existing curriculum.
A
When thinking about higher education, it's important to consider outcomes. That is, what is the quantifiable result of someone receiving a university schooling? Are students graduating to become productive members of society? Indeed, there is a clear economic advantage afforded those who earn a college degree and those who don't. This earnings-potential premium is reflected in numerous studies which, despite underemployment among recent graduates, has remained constant over time. So, how will these outcomes be affected by changes in the quality of education provided? This is a difficult question because there is a high degree of uncertainty regarding what defines a high-quality education.
There is a tendency among both professors and students to assume that online education is either haphazard, insufficient, or lacking real value. Professors complain that online content removes the human element from the equation -- personal interaction, instant feedback, and customized Q&As. Some fear losing those indescribable moments of enlightenment when two (or three or more) minds work together to arrive at a consensus of thought. Others bemoan the highly informal way online courses are delivered to people in their pajamas or students simultaneously watching a video lecture while Facebook chatting their friends.
From an institutional perspective, to suggest that the sustainability of higher education is somehow compromised by the introduction of online content is exaggerated. What are MOOCs really providing? A substitute for a rich, interactive college experience? Probably not. The amenities afforded enrolled students are too wide in breadth and scale to replicate on a computer screen. No one can seriously suggest that a discussion board will serve the same purposes as a face-to-face meeting. Yet what these courses can provide is increased access to high-quality educational content, better allocation of resources, and rich opportunities for data collection and analysis.
Access is imperative. Are we already losing what we've gained?
Moving forward, one of the key determinants of MOOCs' success or failure will be their openness. Already billed as "massive and open," MOOCs have helped deliver knowledge to people without preference for socioeconomic factors or sovereign borders. The Internet's capacity to flatten (or more appropriately disregard) formal barriers between peoples has coincided with the growth of information distribution on an unprecedented scale. How open will these courses remain? Already, we are witnessing carefully coordinated attempts to monetize this space. As with newspapers throwing up paywalls, this is somewhat reactionary. Yet how will this affect those most likely to benefit from free entry?
In theory, education should be non-exclusive. Thomas Jefferson once said that "knowledge is the common property of mankind." Information wants to be free. In practice, however, information is a scarce and highly guarded resource. America's founding fathers envisioned universities as "temples of knowledge." Yet over time education, like many other public goods, was reinterpreted as a for-profit enterprise with good intentions. Now, crowded lecture halls are not necessarily a market failure. On the contrary, a highly educated society is desirable. Demand is simply outpacing supply. What clearly needs fixing is the increasingly unrealistic cost of obtaining an education.
Missing from the MOOCs debate is what effect it's having on the global citizen. As more people come online across the world and Internet access is expanded to include new populations, open and accessible knowledge will shower untold benefits on the world's un- and undereducated. Obviously, there are limitations; backward-looking countries and Big Brother states will always find ways to erect walls or taper the velocity of information. But in places where information is allowed to flow freely, a convergence of standards will help educators across international borders align their teaching know-how in a way unimaginable in modern history.
The data doesn't lie
Perhaps one of the brightest prospects for MOOCs is the ripe potential for data collection these online courses will provide. Every time a class is administered, there are thousands of data points worth tracking at both the micro and macro level. Best of yet, the data is provided in real-time so there is less of a risk that an instructor will find out 30 percent of his/her students failed after the fact, or students will get their grades back wondering why they received a 'B' instead of an 'A.'
Consider that when students fail to understand a particular component of a teacher's curriculum, in the brick-and-mortar classroom this is difficult to identify due to either time constraints or students' fear of asking "dumb questions." Yet when we shift gears to online content, thousands of students have the ability to voice their concerns instantaneously (and hopefully anonymously), providing a venue for clarification, peer-to-peer discussion, and real-time temperature gauging.
On a micro level, data will not only help teachers respond proactively but also provide new insights about teaching methods. Maybe it's discovered that students perform at a higher level when beautiful visuals complement traditional video lectures. Another way to think about this is not every student learns new information in lockstep. Different content delivery formats cater to different individuals' learning styles. In the middle of a video lecture, a student might run into trouble answering a certain question (sometimes referred to as "retrieval"). With calibrated algorithms, a student can be posed a second (or even third) question tailored in a way that fits that student's learning profile.
Looking at this on a macro scale, MOOCs have the ability to act as a sort of invisible hand, clearing away the content which fails to provide tangible benefit and focussing attention on what really matters. As more students sign up and (importantly) complete these courses, universities will learn where to direct their resources, what subjects are in high-demand, what teachers are worthy of their pay scale, and what the educational landscape really looks like. This isn't so much "market-based" as it is reality-based. The best teachers will not go unnoticed and the brightest students will find what it is they're looking for.
Thursday, May 30, 2013
The food truck business:
Portland vs. NYC
Adam Davidson writes in the New York Times
Magazine how aspiring entrepreneurs ought to think twice before going
into the food-truck business in New York City. Despite what Brooklyn’s
hipsters may believe, the business of food-trucks is far from
flourishing, needlessly constrained due to several critical
barriers-of-entry. Meanwhile, in Portland, OR business is booming. What
gives?
Stymied by stale laws
If planning to operate your own food-truck in Gotham, first you’ll need to get your hands on the following: (1.) food vending operator’s license and (2.) mobile food unit permit. In the event that an inspector shows up, evidently this happens quite frequently, the operator of a truck must have BOTH items handy. While obtaining a operator’s license (think of it as a driver’s license) is relatively seamless, securing a permit is less so. NYC’s Department of Health and Mental Hygiene is limited by law in the total number of street vending permits it may issue.
Due to this arbitrary quota, vendors are forced to compete for a limited supply of transferable permits. As Davidson writes, there exists anecdotal evidence of vendors paying upwards of $15,000 to $20,000 for the leasing of an existing permit typically lasting two years. Much like taxi-cab medallions in NYC, the legal cap on the total number of vendors creates a large upfront cost to owners wishing to get their hands on one of these prized permits. As a result, there are several waiting lists each with their own eligibility criteria: lists for veterans and non-veterans, ones for those operating city-wide or in a specific borough, while others exist for those operating either year-round or on a seasonal basis.
Additionally, there are five separate classes of permits for which a food-truck operator may qualify:
To those food-truck operators frustrated by long waiting lists, the City recommends instead applying for a “restricted area” permit. This permit is just as it sounds: restricted. While it does not authorize street vending, a restricted area permit authorizes vending on a private property in a commercially-zoned area or on property under the jurisdiction of New York City Department of Parks & Recreation. This all but defeats the purpose of being mobile which includes the freedom to service customers in areas most likely to return a profit.
Emerging food-truck mecca
At first glance, Portland’s rich tapestry of arts and culture would seem like a natural fit for a food-truck bonanza. Yet less than ten years ago Portland’s food-truck scene was confined to a few select areas. In recent years, Portland emerged as a strong contender for the nation’s food-truck mecca. From 2008-2009, there was a reported 40 percent increase in the number of food-carts operating within city-limits. At the same time, there exists a growing variety of culinary options as prefaced in Davidson’s closing remarks. So what lies behind Portland’s success?
For starters, there appears a lot more space for businesses to operate. The City of Portland incentivizes food-carts to set up shop on vacant lots, underutilized sites, brownfields, and surface parking lots downtown. This allows vendors to take advantage of unoccupied space while simultaneously contributing to a more vibrant urban setting. The relationship holds true in both low-density and high-density neighborhoods.
At least on the surface, the regulatory environment appears more conducive to food-truck startups in Portland than in NYC. For those with a knack for mobility, no permit is required for vending from a truck. Otherwise for those who wish to operate a “vending cart” on a public sidewalk or private property, permits are required with attendant regulations concerning cart size and aesthetics. Importantly, there exists no cap on the total number of permits issued. In the absence of a quota, aspiring food-truckers are free of barriers which can be significant as in the case of NYC’s shadow permit market.
Finally, Portland’s city government does not impose on the creativity of its food-vendors. There exists no mandate that operators store or service their carts in a predefined “commissary” nor is there any mention of separate classes of food-carts. Portland prides itself on its unique flexibility. Hence, the wide variety of options from Mexican to Korean to Indian food. All the while, New York’s vendors (and hungry customers) drown in dirty-water dogs.
Follow the leader
If New Yorkers want a food-truck economy they can be proud of, they would be wise to follow Portland’s lead and do away with the bureaucracy. Those in city government should pledge to stamp out the 1980s legalese and replace the outdated model with a simple framework. Five different classes of food-trucks, with some separated only by how butter is applied to a bagel, seems unnecessary. For all practical purposes, it creates additional paperwork for entrepreneurs already occupied by the gargantuan task of starting a business.
A second step in liberalizing the food-truck economy should involve eliminating “commissaries.” The word itself is a remnant of a different era. Right now, the way the system operates resembles something of a custodial staff performing the rote task of doling out stale bagels and soggy frankfurters. The sector is sorely lacking spontaneity. The elimination of commissaries will not only increase consumer choice but also convince artists to enlist their much-needed creativity.
Most importantly and what will likely generate the most resistance, New York should put to a referendum the removal of the cap on food-vendor permits. Just as medallions for the city’s taxi cabs artificially inflate the cost of doing business, so too does a quota on carts prevent the city’s food-truck sector from realizing its potential. New Yorkers are hungry for change.
Stymied by stale laws
If planning to operate your own food-truck in Gotham, first you’ll need to get your hands on the following: (1.) food vending operator’s license and (2.) mobile food unit permit. In the event that an inspector shows up, evidently this happens quite frequently, the operator of a truck must have BOTH items handy. While obtaining a operator’s license (think of it as a driver’s license) is relatively seamless, securing a permit is less so. NYC’s Department of Health and Mental Hygiene is limited by law in the total number of street vending permits it may issue.
Due to this arbitrary quota, vendors are forced to compete for a limited supply of transferable permits. As Davidson writes, there exists anecdotal evidence of vendors paying upwards of $15,000 to $20,000 for the leasing of an existing permit typically lasting two years. Much like taxi-cab medallions in NYC, the legal cap on the total number of vendors creates a large upfront cost to owners wishing to get their hands on one of these prized permits. As a result, there are several waiting lists each with their own eligibility criteria: lists for veterans and non-veterans, ones for those operating city-wide or in a specific borough, while others exist for those operating either year-round or on a seasonal basis.
Additionally, there are five separate classes of permits for which a food-truck operator may qualify:
-
Class A: Examples include fried and grilled sausages, poultry, shish kebab, hamburgers, eggs and gyros
- Class B: Sandwiches, raw fruits, vegetables and salads, breads, bagels and rolls buttered or topped with cream cheese on unit, smoothies, and soft-serve ice cream
- Class C: Pre-packaged frozen deserts, pre-packaged sandwiches, and pre-packaged/pre-sliced fruits and vegetables
- Class D: Boiled frankfurters and sausages, brewed coffee and tea, doughnuts, pastries, rolls and bagels buttered or topped with cream cheese at a commissary, popcorn, cotton candy, nuts, candied nuts, soft pretzels, and chestnuts
-
Class E: Uncut fruit and vegetables
To those food-truck operators frustrated by long waiting lists, the City recommends instead applying for a “restricted area” permit. This permit is just as it sounds: restricted. While it does not authorize street vending, a restricted area permit authorizes vending on a private property in a commercially-zoned area or on property under the jurisdiction of New York City Department of Parks & Recreation. This all but defeats the purpose of being mobile which includes the freedom to service customers in areas most likely to return a profit.
Emerging food-truck mecca
At first glance, Portland’s rich tapestry of arts and culture would seem like a natural fit for a food-truck bonanza. Yet less than ten years ago Portland’s food-truck scene was confined to a few select areas. In recent years, Portland emerged as a strong contender for the nation’s food-truck mecca. From 2008-2009, there was a reported 40 percent increase in the number of food-carts operating within city-limits. At the same time, there exists a growing variety of culinary options as prefaced in Davidson’s closing remarks. So what lies behind Portland’s success?
For starters, there appears a lot more space for businesses to operate. The City of Portland incentivizes food-carts to set up shop on vacant lots, underutilized sites, brownfields, and surface parking lots downtown. This allows vendors to take advantage of unoccupied space while simultaneously contributing to a more vibrant urban setting. The relationship holds true in both low-density and high-density neighborhoods.
At least on the surface, the regulatory environment appears more conducive to food-truck startups in Portland than in NYC. For those with a knack for mobility, no permit is required for vending from a truck. Otherwise for those who wish to operate a “vending cart” on a public sidewalk or private property, permits are required with attendant regulations concerning cart size and aesthetics. Importantly, there exists no cap on the total number of permits issued. In the absence of a quota, aspiring food-truckers are free of barriers which can be significant as in the case of NYC’s shadow permit market.
Finally, Portland’s city government does not impose on the creativity of its food-vendors. There exists no mandate that operators store or service their carts in a predefined “commissary” nor is there any mention of separate classes of food-carts. Portland prides itself on its unique flexibility. Hence, the wide variety of options from Mexican to Korean to Indian food. All the while, New York’s vendors (and hungry customers) drown in dirty-water dogs.
Follow the leader
If New Yorkers want a food-truck economy they can be proud of, they would be wise to follow Portland’s lead and do away with the bureaucracy. Those in city government should pledge to stamp out the 1980s legalese and replace the outdated model with a simple framework. Five different classes of food-trucks, with some separated only by how butter is applied to a bagel, seems unnecessary. For all practical purposes, it creates additional paperwork for entrepreneurs already occupied by the gargantuan task of starting a business.
A second step in liberalizing the food-truck economy should involve eliminating “commissaries.” The word itself is a remnant of a different era. Right now, the way the system operates resembles something of a custodial staff performing the rote task of doling out stale bagels and soggy frankfurters. The sector is sorely lacking spontaneity. The elimination of commissaries will not only increase consumer choice but also convince artists to enlist their much-needed creativity.
Most importantly and what will likely generate the most resistance, New York should put to a referendum the removal of the cap on food-vendor permits. Just as medallions for the city’s taxi cabs artificially inflate the cost of doing business, so too does a quota on carts prevent the city’s food-truck sector from realizing its potential. New Yorkers are hungry for change.
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