If only one man, Jon Stewart says, could embody the corporate-industrial-government complex in all its cluster$#@!itude:
(Hat tip to Borepatch.)
The Walking Debt
Tuesday, November 29th, 2011Apple’s Supply Chain
Tuesday, November 29th, 2011Apple began innovating in its supply-chain management almost immediately upon Steve Jobs’s return in 1997:
At the time, most computer manufacturers transported products by sea, a far cheaper option than air freight. To ensure that the company’s new, translucent blue iMacs would be widely available at Christmas the following year, Jobs paid $50 million to buy up all the available holiday air freight space, says John Martin, a logistics executive who worked with Jobs to arrange the flights. The move handicapped rivals such as Compaq that later wanted to book air transport. Similarly, when iPod sales took off in 2001, Apple realized it could pack so many of the diminutive music players on planes that it became economical to ship them directly from Chinese factories to consumers’ doors. When an HP staffer bought one and received it a few days later, tracking its progress around the world through Apple’s website, “It was an ‘Oh s—’ moment,” recalls Fawkes.
That mentality — spend exorbitantly wherever necessary, and reap the benefits from greater volume in the long run — is institutionalized throughout Apple’s supply chain, and begins at the design stage. Ive and his engineers sometimes spend months living out of hotel rooms in order to be close to suppliers and manufacturers, helping to tweak the industrial processes that translate prototypes into mass-produced devices. For new designs such as the MacBook’s unibody shell, cut from a single piece of aluminum, Apple’s designers work with suppliers to create new tooling equipment. The decision to focus on a few product lines, and to do little in the way of customization, is a huge advantage. “They have a very unified strategy, and every part of their business is aligned around that strategy,” says Matthew Davis, a supply-chain analyst with Gartner (IT) who has ranked Apple as the world’s best supply chain for the last four years.
When it’s time to go into production, Apple wields a big weapon: More than $80 billion in cash and investments. The company says it plans to nearly double capital expenditures on its supply chain in the next year, to $7.1 billion, while committing another $2.4 billion in prepayments to key suppliers. The tactic ensures availability and low prices for Apple — and sometimes limits the options for everyone else. Before the release of the iPhone 4 in June 2010, rivals such as HTC couldn’t buy as many screens as they needed because manufacturers were busy filling Apple orders, according to a former manager at HTC. To manufacture the iPad 2, Apple bought so many high-end drills to make the device’s internal casing that other companies’ wait time for the machines stretched from six weeks to six months, according to a manager at the drillmaker.
Life as an Apple supplier is lucrative because of the high volumes but painful because of the strings attached. When Apple asks for a price quote for parts such as touchscreens, it demands a detailed accounting of how the manufacturer arrived at the quote, including its estimates for material and labor costs, and its own projected profit. Apple requires many key suppliers to keep two weeks of inventory within a mile of Apple’s assembly plants in Asia, and sometimes doesn’t pay until as long as 90 days after it uses a part, according to an executive who has consulted for Apple and would not speak on the record for fear of compromising the relationship.
Apple sounds suspiciously like Wal-Mart.
The Footage the NFL Won’t Show You
Sunday, November 13th, 2011Reed Albergotti describes the footage the NFL won’t show you:
For decades, NFL TV broadcasts have relied most heavily on one view: the shot from a sideline camera that follows the progress of the ball. Anyone who wants to analyze the game, however, prefers to see the pulled-back camera angle known as the “All 22.”
While this shot makes the players look like stick figures, it allows students of the game to see things that are invisible to TV watchers: like what routes the receivers ran, how the defense aligned itself and who made blocks past the line of scrimmage.
By distributing this footage only to NFL teams, and rationing it out carefully to its TV partners and on its web site, the NFL has created a paradox. The most-watched sport in the U.S. is also arguably the least understood. “I don’t think you can get a full understanding without watching the entirety of the game,” says former head coach Bill Parcells. The zoomed-in footage on TV broadcasts, he says, only shows a “fragment” of what happens on the field.
[...]
Charley Casserly, a former general manager who was a member of the NFL’s competition committee, says he voted against releasing All-22 footage because he worried that if fans had access, it would open players and teams up to a level of criticism far beyond the current hum of talk radio. Casserly believed fans would jump to conclusions after watching one or two games in the All 22, without knowing the full story.“I was concerned about misinformation being spread about players and coaches and their ability to do their job,” he said. “It becomes a distraction that you have to deal with.” Now an analyst for CBS, Casserly takes an hour-and-a-half train once a week to NFL Films headquarters in Mt. Laurel, N.J. just to watch the All-22 film.
Lonnie Marts, a former linebacker for the Jacksonville Jaguars, says there are thousands of former NFL players who could easily pick apart play-calling and player performance if they had access to this film. “If you knew the game, you’d know that sometimes there’s a lot of bonehead plays and bonehead coaching going on out there,” he says.
Making the Grade: Why the Cheapest Maple Syrup Tastes Best
Saturday, November 12th, 2011When I read the headline, Making the Grade: Why the Cheapest Maple Syrup Tastes Best, I assumed that high-grade syrup would have fewer “impurities” — and I was right.
What did surprise me was maple syrup’s long history in progressive politics:
After the Revolution, Americans looked at the maple tree in a new light. To the eminent Philadelphia patriot and physician Benjamin Rush, maple sugar seemed perfectly tailored to the new republic. Here was a commodity that could compete in a global market, bolstering the independence of yeoman farmers, and demonstrating the superiority of free labor. It tapped an abundant resource, required only a small amount of labor, and used supplies most farmers already owned. Best of all, it would destroy the market for Caribbean sugar cane, produced by slaves laboring in horrifying conditions. Rush set down his reflections in the form of a letter to his friend Thomas Jefferson, which he presented publicly in 1791, concluding:
I cannot help contemplating a sugar maple tree with a species of affection and even veneration, for I have persuaded myself, to behold in it the happy means of rendering the commerce and slavery of our African brethren, in the sugar islands as unnecessary, as it has always been inhuman and unjust.
A minor maple sugar bubble ensued, mixing frontier land speculation with fervent abolitionism. One Pennsylvania Quaker, enthralled by the idea of deriving profit from virtue, organized an association for the purpose, dispatching a sample to the president. Washington expressed his thanks for the sugar, which he was “much pleased to find of so good a quality.” William Cooper hitched his fledgling town to the enterprise. Dutch investors organized a consortium.
All of these efforts failed commercially. Rush had praised maple sap for its ability to produce refined sugar of “superior purity,” offering sweetness without any flavor. But as a refined commodity, competing on cost alone, maple sugar simply could not match the low-priced products of the cane plantations. The late-season sap, with its strong flavor, certainly offered a distinctive product, but not one capable of attracting consumers who had access to more refined alternatives. Rush speculated that it might find some commercial outlet, anyway, if it could be processed into something more desirable. “It affords a most agreeable molasses,” he wrote, suggesting that it “might compose the basis of a pleasant summer beer.” It was at least as well suited for rum, but Rush piously expressed his hope that “this precious juice will never be prostituted by our citizens to this ignoble purpose.”
It was, of course, but not often. Most maple syrup continued to be turned into sugar by frugal farm families for use as a homely sweetener, with any surplus bringing in a small amount of cash. And as a symbol of freedom, it remained potent. Adherents of the Free Produce movement shunned the products of slave labor, and sought out maple sugar. “So long as the maple forests stand,” urged a Vermont almanac in 1844, “suffer not your cup to be sweetened by the blood of slaves.”
The artist Eastman Johnson met the outbreak of the Civil War with a series of paintings depicting maple sugaring operations, blending their abolitionist virtues with nostalgia for a simpler age. Those who left their farms for burgeoning cities, or moved west after the war, brought with them a similar wistfulness for the taste of the maple tree. Sugar was relatively cheap and abundant; it was the flavor of the syrup, which their forebears had never quite succeeded in eliminating, that these migrants came to crave. Vermont Maple Syrup became a valuable brand. By the end of the nineteenth century, the Department of Agriculture scorned the idea of refining maple sap into white sugar, noting that maple sugar and syrup were “prized for their peculiar flavor, and are luxuries rather than staple articles of the daily diet.”
The continuing emphasis on a light, delicate flavor, though, made the product particularly susceptible to adulteration. Shelves filled with syrup cut with glucose, sorghum, or corn; some purveyors added decoctions of maple wood, hickory, or even of corn cobs. Others relied on appearance alone, boiling brown sugar. By the beginning of the twentieth century, one reforming scientist estimated the amount of Vermont Maple Syrup sold every year at ten times the actual production; another cracked that a dense maple forest must stretch from the east coast to Chicago, just to supply the necessary sap.
So maple syrup became a crucial symbol in a new crusade, this time to secure the authenticity of the food supply. Consumers were incensed by the notion that they might be paying premium prices for brown sugar water. Their outrage at the violation of this iconic American product helped rally support for the Pure Food and Drug Act. The law was passed in 1906, and the USDA’s Bureau of Chemistry set about cleaning up the nation’s grocery shelves.
The pure food and drug laws restored truth to labeling, but they couldn’t keep consumers from seeking out cheaper alternatives. Most of these ersatz syrups took pains to replicate the light color and mild flavor of premium syrup, associating themselves with the old notion of refinement. Mapleine, a flavoring launched in 1905, emphasized its ability to reproduce “the delicate elusive tang of the Maple Sap,” reminding consumers that “if it isn’t delicate, it isn’t delicious.”
Private Navy to Start Within Five Months
Thursday, November 10th, 2011Convoy Escort Programme Ltd. will be deploying its private navy — of seven former naval patrol boats, each with eight armed men aboard — to the Gulf of Aden within the next five months:
The bullet-proofed boats will charge about $30,000 per ship traveling in a convoy of around four vessels over three to four days, he said.
“We are going to be a deterrent,” Campbell said. “We are not in the business of looking for trouble but if anybody tries to attack a vessel we are escorting, our security teams will deploy force if they have to act in self defence.”
Attacks reached a record this year and cost the global economy an estimated $7 billion to $12 billion annually, according to the United Nations’ International Maritime Organization. About 23,000 vessels carrying $1 trillion of trade pass through the Gulf of Aden every year, the U.K. government estimates.
About 25 percent of vessels that sail in the Gulf of Aden and Indian Ocean use armed guards, and their owners pay $120 million a year to London insurers for protection against the risks of pirate hijacks, Andrew Voke, chairman of the Lloyd’s Market Association marine committee, told a U.K. parliamentary hearing in June.
There is a shortage of naval assets protecting ships from piracy, said Campbell, whose company is looking for investors to complete the boat purchases. The convoys will police the same 490 nautical-mile long stretch of water within the Gulf of Aden, known as Internationally Recognized Transit Corridor, as the world’s state-backed navies.
Three Kinds of Corporate Neo-Urbanism
Wednesday, November 2nd, 2011Venkatesh Rao describes three kinds of corporate neo-urbanism, represented by Google, Meetup and Zappos respectively:
You could attempt to create the right environment within a large campus, located sufficiently far away from the main urban hub so that it is relatively cheap (Google), you could suck it up and compete for the hipster talent that is willing to pay the costs of Big City life and limit your growth (Meetup), or you could attempt to swallow a likely cheaper location whole, and catalyze the emergence of the neo-urban scene you need for your workforce (Zappos).
(Hat tip to Cameron Schaefer.)
Serial+
Sunday, October 30th, 2011Making money from online fiction seems… challenging. MCM describes his small successes with serializing — and with what he calls serial+:
Serializing a novel is a great way to build brand loyalty (where the brand is you). It’s largely psychological, but I’ve found that readers who come back to you regularly for two or three months will tend to convert from “casual observer” to something approaching “fan”. But the interesting thing is, they don’t need to be coming back for new stuff, just more of the same. Serializing creates an artificial need to return to your site, thereby boosting your fan levels. For my serialized novel Fission Chips, I’ve seen a great shift in the profile of my readership over the last month and a half. Of my 10,000+ readers, 814 are now in the category I’d call “dedicated fans”, visiting not just that site, but reading my other titles as well. After the first two weeks, that number was only 12.
Another variation on this theme is what I call Serial+. In it, you release your book on a schedule (new chapters every Monday and Wednesday, for example), but put a footnote after the latest chapter informing the readers that at this rate, it will take them until some distant date to finish the story. If they want to skip ahead, they can donate a reasonable sum, and get the full story unlocked right away. In early testing, this model has an astounding conversion rate of 72%. If your writing is compelling, people will probably “upgrade” when they can’t take waiting anymore.
Iron Man 3 to Shoot in NC
Friday, October 28th, 2011For Iron Man 3, Marvel Studios considered locations in Los Angeles, Michigan and New Mexico before deciding Wilmington, North Carolina had the right mix of space, talent, and taxpayer incentives:
North Carolina this year increased its tax breaks for movie and television productions to up to 25 percent. That means movie producers could write off up to 25 percent of their in-state spending — up to $20 million — from their state taxes. The tax break is refundable, which means a producer who qualified for a $20 million write-off but didn’t owe that much in North Carolina taxes could collect the difference with a multi-million-dollar check from taxpayers.
The incentive has helped make 2011 a big year for the state’s film industry. Twenty-nine productions had set up offices in North Carolina as of early September, spending more than $200 million and at least temporarily employing 3,000 crew members, Perdue’s office said. The year’s productions include the feature film “The Hunger Games” and the television series “Homeland,” “Eastbound and Down” and “One Tree Hill.”
Little Monsters, Big Bucks
Thursday, October 27th, 2011Unlike the Mario Brothers, the pocket monsters from the Pokémon video game did successfully break out into other media. In fact, when Wizards of the Coast, the folks behind Magic: The Gathering, produced a kid-friendly Pokémon trading-card game, it almost took over the brand. (The card game is now produced by The Pokémon Company, a Nintendo affiliate spun off in 1998.)
The billion-dollar question is how? Pokémon game director Junichi Masuda sees three pillars to its success — solid gameplay, believable characters and the element of communication — but mainly that foundation of unwaveringly excellent videogames:
“A kids’ brand generally doesn’t start with a videogame,” says J.C. Smith, Pokémon Company’s director of marketing. “Because we have that great base that’s a rich experience, it makes the other pieces easier to sell.”
Pokémon was, and is still, the creation of hard-core gamers with an adoration for the medium. Satoshi Tajiri and Ken Sugimori started their company Game Freak in the late ’80s, naming it after a black-and-white gaming fanzine the pair used to print up and sell around Akihabara. They started cranking out passionate, well-designed games that today are cult classics: Mendel Palace on the 8-bit Nintendo; Pulseman on the Sega Genesis.
As a kid, Tajiri would throw different species of bugs into bottles and watch them fight. This would eventually inspire 1996’s Pocket Monsters, a game for the aging black-and-white Game Boy in which players searched through tall grass to capture 150 fantastic creatures, then pit them against each other in battle. It was a smash success in Japan, and Game Freak’s days as a maker of low-selling cult games for their fellow geeks and freaks of Akihabara were over.
One of the company’s first hires was Junichi Masuda, whose background in both classical music and computer programming made him an ideal multitasker for a small company. After writing the theme songs to most of Game Freak’s releases, he moved into game directing. His guiding principle in creating appealing games, he says, is sports.
“With Pokémon, what we concentrate on is that the gameplay is really solid — like a sport, like soccer or basketball,” Masuda said in an interview with Wired.com earlier this year. “It’s a game that people can play on and on, and not get bored of it.”
It’s amazing how unusual that focus on a good game really is.
Solar Power Efficiency
Thursday, October 20th, 2011When it comes to solar power, the standard definition of efficiency isn’t necessarily the most useful:
As the world’s lowest-cost maker of solar panels, First Solar, which is based in Arizona, is well-placed to cash in. Spurning crystalline silicon, the main ingredient in most solar panels, it uses another sort of semiconductor, cadmium telluride, a product of mining waste which it deposits onto glass at high temperature.
The “thin film” photovoltaic cells this produces are relatively inefficient at converting solar radiation into electricity. First Solar’s panels have an average efficiency rate of 11-12% as opposed to 14-15% for the silicon ones.
Yet they are cheap, costing around 74 cents per watt of generating capacity, compared to well over a dollar for the cheapest silicon panel. And they are getting better, with over 17% efficiency achieved in lab conditions. They also perform well at high temperatures and through dust — making them suitable for deployment out West.
Meetings vs. Conversations
Tuesday, October 11th, 2011A curious fact about the American military, and American private industry, in the early 21st century is their insistence on holding formal meetings, William S. Lind notes:
The practice is curious because these same institutions spend a great deal of time and effort studying “good management,” which should recognize what most participants in such meetings see, namely that they are a waste of time. Good decisions are far more often a product of informal conversations than of any formal meeting, briefing or process.
History offers a useful illustration. In 1814, the Congress of Vienna, which faced the task of putting Europe back together after the catastrophic French Revolution and almost a quarter-century of subsequent wars, did what aristocrats usually do. It danced, it dined, it stayed up late playing cards for high stakes, it carried on affairs, usually not affairs of state. Through all its aristocratic amusements, it conversed. In the process, it put together a peace that gave Europe almost a century of security, with few wars and those limited.
In contrast, the conference of Versailles in 1919 was all business. Its dreary, interminable meetings (read Harold Nicolson for a devastating description) reflected the bottomless, plodding earnestness of the bourgeois and the Roundhead. Its product, the Treaty of Versailles, was so flawed that it spawned another great European war in just twenty years. As Kaiser Wilhelm II said from exile in Holland, the war to end war yielded a peace to end peace.
The U.S. military has carried the formal meeting’s uselessness to a new height with its unique cultural totem, the Powerpoint brief. [...] The briefing format was devised to use form to conceal a lack of substance. [...] Why does the American military so avoid informal conversations and require formal meetings and briefings? Because most of the time, the people who actually know the subject are of junior rank. Above them stands a vast pyramid of “managers,” who know little or nothing about the topic but want their “face time” as they buck for promotion. The only way they can get their time in the sun without egg on their faces is by hiding behind a formal, scripted briefing. At the end, they still have to drag up some captain or sergeant from the horse-holder ranks if questions are asked.
How did the Germans do it, back in the day?
When General Hermann Balck was commanding 48th Panzer Korps on the Eastern Front with General F.W. von Mellinthin as his I-A, Mellinthin one day reproached Balck for wasting time by going out to eat with the troop units so often. Balck replied, “You think so? OK, tomorrow you come with me.”
The next day, they arrived at a battalion a bit before lunchtime. They had a formal meeting, Balck asked some questions and got some answers. Then, they broke for lunch. During the informal conversation that usually accompanies meals, Balck asked the same questions and got completely different answers. On their way back to the headquarters, Balck turned to Mellinthin and said, “Now you see why I go out so often to eat with the troop units. It’s not for the cuisine.”
When Generals Balck and von Mellinthin visited Washington in 1980, John Boyd asked them to reflect on their leadership of 48th Panzer Korps and how they would have done it if they had possessed computers. Balck replied, “We couldn’t have done it.” Boyd didn’t ask about Powerpoint, but I suspect General Balck’s reply would have been equally to the point.
Despite the situation in Berlin, the Wehrmacht did know how to think.
Great Courses, Great Profits
Friday, September 30th, 2011Great courses can bring great profits, Heather Mac Donald notes — but only outside of academia:
The canon of great literature, philosophy, and art is thriving — in the marketplace, if not on college campuses. For the last 20 years, a company called the Great Courses has been selling recorded lectures in the humanities and sciences to an adult audience eager to brush up its Shakespeare and its quantum mechanics. The company produces only what its market research shows that customers want. And that, it turns out, is a curriculum in the monuments of human thought, taught without the politically correct superiority and self-indulgent theory common in today’s colleges.
[...]
And the company offers a treasure trove of traditional academic content that undergraduates paying $50,000 a year may find nowhere on their Club Med–like campuses. This past academic year, for example, a Bowdoin College student interested in American history courses could have taken “Black Women in Atlantic New Orleans,” “Women in American History, 1600–1900,” or “Lawn Boy Meets Valley Girl: Gender and the Suburbs,” but if he wanted a course in American political history, the colonial and revolutionary periods, or the Civil War, he would have been out of luck. A Great Courses customer, by contrast, can choose from a cornucopia of American history not yet divvied up into the fiefdoms of race, gender, and sexual orientation, with multiple offerings in the American Revolution, the constitutional period, the Civil War, the Bill of Rights, and the intellectual influences on the country’s founding. There are lessons here for the academy, if it will only pay them heed.The Great Courses, originally called the Teaching Company, wasn’t begun with the goal of creating an antidote to today’s politicized academy. Tom Rollins, chief counsel and chief of staff to Senator Ted Kennedy’s Labor and Human Services Committee, quit his post in 1989 with the idea of finding the most charismatic college professors and having them tape college-level courses for the adult-education market.
Rollins, then 33, soon discovered that his assumptions about the university — that it existed, in his words, “to transmit to the young everything the civilization has figured out so far and to discover new things” — were not shared by everyone in the academy.
[...]
Despite several brushes with mortality in its start-up years, after a decade, the firm was earning $20 million in sales, reported Forbes this January.
[...]
So totalitarian is the contemporary university that professors have written to Rollins complaining that his courses are too canonical in content and do not include enough of the requisite “silenced” voices. It is not enough, apparently, that identity politics dominate college humanities departments; they must also rule outside the academy. Of course, outside the academy, theory encounters a little something called the marketplace, where it turns out that courses like “Queering the Alamo,” say, can’t compete with “Great Authors of the Western Literary Tradition.”
[...]
In its emphasis on teaching, the company differs radically from the academic world, where “teaching is routinely stigmatized as a lower-order pursuit, and the ‘real’ academic work is research,” notes Allen Guelzo, an American history professor at Gettysburg College. Though colleges ritually berate themselves for not putting a high enough premium on teaching, they inevitably ignore that skill in awarding tenure or extra pay.
[...]
Forbes reports the company’s annual sales as $110 million. The firm recently opened a high-tech headquarters in Virginia for its 200 employees and is beefing up the visual learning aids on its DVDs — a sorely needed correction. But the Great Courses confronts a major challenge as it tries to expand its course offerings: “finding great lecturers, a talent that seems to be increasingly rare these days,” says Lucinda Robb, the company’s director of professor development. In fact, the company has been recycling its most popular professors on topics increasingly remote from their official competencies. It is also diversifying into nonacademic realms, such as wine appreciation and personal health. The growing reach of free online university courses might seem to pose a competitive challenge, but for now, the Great Courses adds enough value to its lecturers to justify the product’s sticker price.The biggest question raised by the Great Courses’ success is: Does the curriculum on campuses look so different because undergraduates, unlike adults, actually demand postcolonial studies rather than the Lincoln-Douglas debates? Every indication suggests that the answer is no. “If you say to kids, ‘We’re doing the regendering of medieval Europe,’ they’ll say, ‘No, let’s do medieval kings and queens,’ ” asserts Allitt. “Most kids want classes on the French Revolution, the Russian Revolution, World War I, and the American Civil War.” Creative writing is such a popular concentration within the English major, Lerer argues, because it is the one place where students encounter attention to character and plot and can non-ironically celebrate literature’s power.
But the educational market works very differently inside the academy and outside it, and the consumers of university education are largely to blame. Almost no one comparison-shops for colleges based on curricula. Parents and children select the school that will deliver the most prestigious credentials and social connections. Presumably, some of those parents are Great Courses customers themselves — discerning buyers regarding their own continuing education, but passive check writers when it comes to their children’s. Employers, too, ignore universities’ curricula when they decide where to send recruiters, focusing only on the degree of IQ-sorting that each college exercises sub rosa.
Universities are certainly doing very well for themselves, despite ignoring their students’ latent demand for traditional learning. But they would better fulfill their mission if they took note of the Great Courses’ wild success in teaching the classics. “I wasn’t trying to fix something that was broken in starting the company,” Rollins says. “I was just trying to create something beautiful.” Colleges should replicate that impulse.
John Derbyshire agrees that the courses are intellectual crack.
Chipotle’s Growth Machine
Thursday, September 29th, 2011Chipotle founder Steve Ells is extending their fast-casual formula into a new pan-Asian chain called… ShopHouse?
He has been involved in all phases of its construction, menu, and marketing. The two-story building in Washington evokes the classic urban shophouses of Southeast Asia, in which families run markets on the first floor and live upstairs. The imminent rollout will be curious. There will be no advertising, no official opening date. Signage will make no mention of the Chipotle connection. The registered website, shophousekitchen.com, is virtually dark. The “soft” opening is of a piece with Chipotle’s preference not to make ShopHouse too big a deal. “We don’t even have a plan where we might open a second location,” Ells says.
[...]
The dishes: grilled steak with chili-jam marmalade, roast corn with scallions, Chinese broccoli, pickled vegetables — all served over brown rice, plus green papaya salad on the side. You could recognize the coriander, garlic, turmeric, and lemongrass. The carrots were stunningly bright (something about the pickling process), and the salad was an appealing mix of sweet, salty, spicy, and sour.
I didn’t realize how Chipotle got started:
Ells doesn’t have the typical CEO biography. He’s loved to cook since third grade. His mother remembers him playing with scrambled eggs relentlessly in the kitchen. Nonetheless, Chipotle (pronounced, like its smoke-dried jalapeño namesake, chi-POAT-lay) was pretty much an accident. After majoring in art history at the University of Colorado at Boulder, Ells attended the Culinary Institute of America. In 1990 he landed a job as a $12-an-hour line cook at Stars, the erstwhile San Francisco landmark whose Jeremiah Tower was an early celebrity chef. Ells wanted his own fancy place but had no capital. He figured he’d create a fast-food joint to generate cash flow with which to move up the food chain. Ells loved the little taquerías in the Mission District and decided to open one back in Colorado, where he’d grown up. With an initial $85,000 investment from his father, a former pharmaceuticals executive, he converted a Dolly Madison ice cream store near the University of Denver campus into a burrito shop called Chipotle, opening in 1993. He was 28 and had never studied business in his life.
His overstuffed, individualized burritos were an instant hit, and Ells was quickly able to stop chasing skeptical prospective customers down the street. (“Come back!” he’d plead.) In two years he opened more shops in Denver, which even today has the most Chipotles per capita. Along the way, Ells started bucking conventional fast-food wisdom. Horrified by the confinement conditions at factory farms, he started to use naturally raised livestock. He bought organic when he could and vowed to avoid products with hormones. Ells did so not because he necessarily thought customers appreciated it, but because it struck him as ethical. He’s nothing if not resolute in his convictions. “If you go to dinner at Steve’s house,” co-CEO Moran says, “he couldn’t care less what you want to eat. He’ll tell you what you want, and you’ll like it — and he’ll be right.”
Ells eventually abandoned his dream of starting his own high-end restaurant. Instead he settled into a life of empire building. The financial challenge was to expand outside Colorado, so he began to search for investors. In 1998 he sent a business plan to McDonald’s executives, who apparently liked what they read: Within three years McDonald’s owned a majority stake in Chipotle. Meanwhile Ells, with $360 million from McDonald’s at his disposal, expanded to over 500 outlets. Eventually Ells wanted out of the marriage. (Among other things, McDonald’s favored going global too quickly for Ells’ taste.) A deal was struck. In 2006, Chipotle went public; the stock price doubled its first day of trading on the New York Stock Exchange. In the end McDonald’s walked away with a profit of more than $650 million, and Ells was a rich man and free to run the company his own way.
Blockbusters on a Budget
Tuesday, September 27th, 2011The key to filming a low-budget movie, Bill Martell says, is first writing a low-budget screenplay:
One key to a “big budget” film which can be shot cheap is to come up with BIG ACTION which doesn’t have to be done for real. “ID4″ blew up the White House… Done in miniature.
It’s also important to keep your actors and effects separate! Two reasons for this:
1) To combine real actors and miniatures or computer effects is expensive and time consuming.
2) Real actors make CGI and miniatures look fake. They give us a point of comparison. This is why Stan Winston built LIFE SIZE dinosaurs for the petting-touching-standing next to scenes in “The Lost World”. We aren’t doing ANYTHING for real!
This DOES limit your palate. You have to find a story where the big action takes place ‘outside’ and the actors work ‘inside’. “DIE HARD” type movies work well for this. But so would “ALIEN” and “ALIENS”, “CRIMSON TIDE , “EXECUTIVE DECISION”, any Star Trek film, and Hawks version of “THE THING”.
Other tricks involve using centralized locations and confined cameos:
By having a large portion of the film take place at a central location, that location can be pre-lit to save time setting up shots. Most low budget films have a primary location where half of the film takes place, then several secondary locations. This reduces down time for crew moves and allows a production to maximize the number of pages shot per day. A low budget film averages at least five pages a day, compared to the page or two a studio film can roll between packing and unpacking the trucks.
[...]
Let’s say you can afford to hire Robert Vaughn for one day. You want to maximize his screen time, so you confine him to a location. Instead of spending valuable star time moving the crew from location A to location B, you make sure EVERY SINGLE SCENE Robert Vaughn is in takes place at Location A.Let’s say he’s the Chief Of Police. You stick him in an office, light it, and shoot every single scene between the Renegade Cop and the Chief Of Police: Chewed out, one last chance, badge and gun taken away, arrested by other cops, finally convincing the Chief to let him finish the case. These scenes are weaved through out the film, making it seem like Robert Vaughn was in the whole thing.
Now take that idea, and multiply it by 6 different locations and 6 different confined cameos, and you have an ALL STAR CAST which seems to be in the entire film. Karen Black as the witness. Martin Landau as the Senator who may be involved. Michael York as the suspect. Teri Polo as the widow of Renegade Cop’s partner. Stan Shaw as the Renegade Cop’s mentor, who owns a bar. You get the idea.
Each actor works ONE day at ONE location to maximize his/her screen time.
This explains why he wrote a number of screenplays taking place on submarines, and thus why his blog is called Sex on a Submarine — sort of:
So I get these script notes. You always get notes from actors, directors, producers, producer’s girlfriend’s, producer’s dog walkers, etc. Endless notes. Most notes aren’t about improving the script, they’re about changing it.
My favorite note was from a producer at MGM — they were interested in this contemporary gritty armed robbery script of mine, kind of like HEAT, and he asked, “Why can’t they be cowboys?”
“Do you mean, have the script take place in the 1800s?”
“No. Still takes place today, but the robbers wear hats and chaps and spurs and ride horses!”
Thankfully that project crashed and burned, but there is still a Village People version somewhere on my hard drive. Most script notes are crazy things like that, and that’s why when you see some dreadful film and wonder why they bought that script; well, they didn’t really buy that script — they bought a completely great script that was the one in a million… then changed it into that dreadful script. And then spent $106 million to make it. You’ll probably be hearing more about that in later blog entries.
So I get these notes from HBO… they want me to put a sex scene in the script. Now, you might expect to get a note to add a sex scene from some direct to video producer or maybe Roger Corman’s development person… but this is HBO!
So I ask, “The script takes place on a submarine with a crew of 110 men, what kind of sex scene did they have in mind?”
And they shoot back, “Well, not a Gay sex scene!” That was back then, today they would want a Gay sex scene (not that there’s anything wrong with that).
So I asked, “Um, where is the woman for the non-Gay sex scene coming from?”
And they give me the standard answer, “Hey, you’re the writer — be creative!” Which just means they have no idea how there can be a sex scene in the script, either… but now it is my problem. Tag, you’re it!
As usual, I argue a little, but you can never win. The golden rule. He who has the gold rules. When you sell a screenplay it is no longer yours, and they can make even the stupidest changes and you are powerless to do anything… and usually your contract includes 2 rewrites and a polish, so you are the one ruining your own script. You have to. It’s all part of the screenwriter’s job.
Despite my logical arguments, HBO insists that I add a sex scene. With a woman.
Well, my script didn’t only have 110 men on the submarine, it also had a handful of terrorists who had taken over the sub, and one was already a woman. So, I write up a sex scene — and it’s still really stupid. We have these terrorists who are outnumbered but have a clever plan to take over the submarine, and right in the middle of this scene, the female terrorist sets down her gun and disrobes to get some lovin’ from a crew member who never asks who she is or what she is doing on the submarine. It is the dumbest scene I have ever written (the cowboys made more sense).
Okay, I’m a pro… I make sure that the scene before the stupid sex scene and after the stupid sex scene cut together perfectly, so that when HBO sees how stupid the sex scene is, the editor can cut the film together without it. Snip-snip and that scene is gone! The film won’t be stupid anymore.
But when CRASH DIVE airs on HBO on March 28 1996, the sex scene is intact.
The Logic of Failure
Monday, September 26th, 2011
We divided the Greenvale participants into three groups: a control group, a strategy group, and a tactics group. The strategy and tactics groups received instruction in some fairly complicated procedures for dealing with complex systems. The strategy group was introduced to concepts like “system”, “positive feedback,” “negative feedback,” and “critical variable” and to the benefits of formulating goals, determining and, if necessary, changing priorities, and so forth. The tactics group was taught a particular procedure for decision making, namely, “Zangemeister efficiency analysis.”
After the experiment, conducted over several weeks, the participants were asked to evaluate the training they had received; figure 39 shows the results. The members of the strategy and tactics groups all agreed that the training had been “moderately” helpful to them. The members of the control group, who had received training in some nebulous, ill defined “creative thinking,” felt that their training had been of very little use to them. The differences in the evaluations are statistically significant. If we look at the participants’ actual performance as well as at their evaluations of the help they thought they got from their training, however, we find that the three groups did not differ at all in their performance.
Why did the participants who had been “treated” with certain procedures think this essentially useless training had been somewhat helpful? The training gave them what I would call “verbal intelligence” in the field of solving complex problems. Equipped with lots of shiny new concepts, they were able to talk about their thinking, their actions, and the problems they were facing. This gain in eloquence left no mark at all on their performance, however. Other investigators report a similar gap between verbal intelligence and performance intelligence and distinguish between “explicit” and “implicit” knowledge.’ The ability to talk about something does not necessarily reflect an ability to deal with it in reality.
The Social Pathologist draws some conclusions:
If we think about this last experiment for a minute, its findings are profoundly disturbing. It would appear that theoretical problem solving knowledge does not necessarily translate to practical problem solving knowledge. Buisness school graduates do necessarily make good businessmen. Perhaps one of the reasons why Western economies are faltering at the moment is because there are thousands of graduates from business schools occupying positions in senior management who can “talk the talk” but cannot “walk the walk”.
Dorner’s book also has implications for political theory: Take for example democracy. It would appear that the average man is suited to understanding simple and immediate problems and such would vote intelligently on such issues, but what about complex issues with long term consequences? Democratic government, given human cognitive limitations, is surely to fail over the long term since the bulk of men are not able to grasp the long term consequences of even moderately simple decision. Democracy (even tyranny) is ultimately corrupted by its own stupidity.
David builds on this:
The ability to work with abstractions fluently and effectively is important — part of this ability should be understanding the limits of abstractions. In business, for example, there are many companies paying too much attention to computerized “business intelligence systems” mining vast databases of customer behavior, and far too little attention to taking advantage of the tacit knowledge possessed by their front-line employees.
Higher education should result in increased ability to deal well with abstractions — too often, it leads instead to the reification of abstractions, to treating them as more real than reality. I’ve met executive for whom the assumed position of a business on the BCG growth-share matrix (cows, dogs, stars question marks) was much realer than that actual characteristics of the actual business.