The Kardashians Killed the Kard

The Kardashian sisters have found some sense. After criticism from financial experts and Attorney General Blumenthal (CT) that the Kard was a trap for teens to enter financial ruin, the Kardashians killed the Kard. According to Blake Ellis (report here) from Cnnmoney.com:

"On Monday, the Kardashian family's attorney sent a notice of termination to the banks and licensing companies responsible for the card, saying the 'negative spotlight...threatens everything for which they have worked.'"

The good news is the Kardashians are done with the venture. The bad news : (1) The little reward for the risk may have been the reason; according to Ellis, only 250 Kards were purchased (2) the sisters were willing to risk their reputation to cash in on charging kids when they decided to back the venture a month ago. According to Ellis, the card could be and was marketed for teens as young as 13. It was almost $100 just to own, not including repetitive fees for transactions which are free under a bank issued debit card.

The worse part about the card was having the lavish and rich Kardashians backing it as if to say “here kids, here is the means to dress, spend like us and live our lifestyle, at the same time, having us charge you to do it so we can continue to spend lavishly”. I admit I’m coming down kind of hard on the sisters but charging adults is a little sly and doing so to kids is thievery. If the Kardashian sisters want to continue their brand, they have to think better about their decisions. I am glad they made the decision to pull the card instead of continuing to back it, defend it, and sell it. In the end, the sisters are not stupid but this serious business venture has left me thinking the sisters lack business savvy or at least business common sense. Unlike major corporations, they are in the public eye and known by name. They don't have a major entity to take the criticism the way a major bank does. 

The Definition of Anti-Salesmanship

Have you read New York Times article “A Bully Finds a Pulpit on the Web” by David Segel? Please read this article. PLEASE. I read a shocking 8-page exposé on negative customer service and the loopholes that allow incredibly appalling service to exist. That’s right, I said appalling. As in… disgusted, sickened, angry, hostile and so many other words that cannot be expressed.

Every person has at least one bad customer service experience. Some vary from small to incredible. I have never read customer service as bad as Segel reported. Vitaly Borker runs Decormyeyes.com. The company sells eyeglasses and, simply put, they provide horrible service. The service is followed by verbal and sexual harassment and physical threats against customers who dare to dispute charges or complain personally to the company. There is a whole lot more but it would take too much time to detail the article. According to the article, Decormyeyes.com is featured on plenty of message boards and customer service sites like getsatisfaction.com and has plenty of bad complaints splattered all over the web. So how do they get customers? For some time, according to Segel, a google search for an eyeglass brand would yield décormyeyes.com. Borker’s response to the negative reviews: negative or positive an online mention of the company’s name ranks them higher on the google search. Therefore, bringing them customers. For Borker, there is no need to halt the bad service or harassment.

I tested the theory. I searched for “eyeglasses” “designer eyeglasses” “Lafont eyeglasses” and “Chanel eyeglasses”; only “Lafont eyeglasses” gave me décormyeyes.com in the ads section. Theory wrong? Well, the article turned to Google asking the company why their search did not weed out rankings based on the negative reviews. Maybe the method was changed in response to the article.

Google was not the only company mentioned. While Google’s search rankings may not be able to weed out negative from positive mentions, Mastercard, Citibank, and Ebay did little despite knowing full well they were associated with a company that purposefully provided negative service and harassed customers. Their response in the article is that somehow, someway, and through some magical loophole, Borker was able to comeback any time. Only in the end did Segel reveal that after having been contacted by the New York Times, all companies kicked Borker out of their network. The only company with enough courage to not withstand bad service is Amazon. According to Borker, Amazon doesn’t play around with bad service and will kick bad sellers off their site; he is an angel on Amazon. So, great job Amazon for being dedicated to good service.

I am angry that Borker believes this is a good long term business strategy. I am angry that companies claimed ignorance about the so called loopholes of their system (or lack of care for customers) until a journalist came calling.  The good thing is the companies mentioned apparently realized the consequence of bad press and rectified the situation. Borker, as mentioned, doesn’t care.

This is not a stable strategy. It has worked for some time for Borker but unfortunately the integration of social media with the Internet will not allow his business to grow. Social media clearly gives more room for customers to find enough research about the company. As internet search engines further intertwine social media into the actual search, it should be about a year before bad service will either drop search rankings or leave rankings unaffected with customer service ratings attached to the search (google claims this will happen in the near future).

The other reason the business model is not stable: while bad ratings may be good for Borker, it is not good for other affiliated companies. With new legislation protecting consumer rights and disgusting stories of harassment, what company in their right mind would want to be associated with decormyeyes.com? Let’s not be naïve, some companies don't care about complaints but harassment is another thing. The more bad press Borker and decormyeyes.com receives, the more affiliated companies will not be willing to risk reputation and new customers. Borker will have to change his ways or risk abandonment.

Borker is the epitome of anti-salesmanship (as Segel put it) and his shamelessness and badge of pride associated with that is what left me appalled about this man and his deplorable business strategy. So is it worth it? Is a bad reputation and quick one-time customers better than good reputation and long term customers? I think not but I’m just someone who prefers to build relationships instead of burning them before they are created.

Beyoncé: I Am... World Tour

I watched "Beyoncé: I Am... World Tour" on Hulu. Again. The first time, I only caught a glimpse of it and this time around, I jumping to the non-performance parts.The first time around, I saw a scene of Beyoncé editing the footage of the tour. She had a clear vision of the way she wanted the special to look and became director so as to see this vision come to fruition. Therefore, I watched the second time paying extra attention to the direction of the special.
I don't watch or purchase tour performance dvds, so I am no critic. I will say that if her vision was to show almost every performance within that 1 hour, her connection to fans, her as human, and as a boss, she succeeded. Beyoncé's career is not a mystery to anyone. Even if one is not a fan, one knows she is a singer, actress, fashion designer, and endorser of multiple products. Beyoncé hasn't really opened up too much about the way she runs her career. On the tour special, there were small glimpses into her work ethic (by small, I mean about a handful of short scenes). I didn't know Beyoncé ran her tour. She clearly has tour managers and most likely a 100 person crew but the first scenes of the special were her going over a lot of the details of the tour. She was involved.  In the end, I read some of the credits to know she is labeled as director, executive producer, producer, stage direction, and I stopped reading credits after that. The point is Beyoncé is in control of her career.
Not every musician has control; evident by the successful artists that are not getting paid or are clueless to the ins and outs of their industry. In fact, not every person is clued in to their career. If one sets out for a clear career goal (the path doesn't have to be so clear as paths are mostly unpredictable), take control where one can. Control gives you the best possibility of reaping the rewards of the hard work you have sown. This is not to say we will all become millionaires or do world tours but whatever rewards come your way, you should catch it. If someone controls your career, leaving you left out, they most likely will control the reward. The lesson is to understand that control, involvement, and rewards are all related.

Blockbuster! Where Have You Been?

I live about five minutes from a Blockbuster and Redbox, both within the same shopping center. Blockbuster is only useful for my boyfriend who rents video games. Other than that, Redbox fulfills my need for movies. As proven by the popularity of Netflix and Redbox, blockbuster is not considered part of the movie rental market anymore. I’m only reminded of them when I pass the store on the way to Redbox or the grocery store. Then “Blockbuster to Launch first national ad campaign in three year” by Ben Fritz arrived in my LA Times Business Daily email. The gist of the article was about Blockbuster going through “Chapter 11 reorganization” and the almost $20 million federal court approved ad campaign the company launched.

I always root for the underdog and appreciate an amazing comeback but by the end of the article, I was left thinking “Blockbuster where have you been?”. I don’t know if there is some legal trap that prevented the company from putting out a campaign in three years but for three years, their competitors have gained a three year head start complete with upgraded movie rental methods. Though Blockbuster has been around longer than Redbox and Netflix, their comeback seems like a catch up. For those not familiar with Blockbuster (trust me, there are some), the company seems like the new kid on the block.

The only slight of hand for Blockbuster is getting new releases almost a month before Redbox and Netflix. Ben Fritz revealed this is only possible because “Blockbuster charges higher prices… generating more money for studios that share in the revenue.” Is it possible that a $20 million campaign, earlier releases, and higher charge will steal Netflix subscribers and Redbox consumers? Will it hand Blockbuster control of the company from bondholders? Will it keep stores open? I think not, although miracles can happen. Three years is a good head start for competitors and Blockbuster isn’t playing a good hand. For such miracles, Blockbuster is going to have to bet cautiously or hope that the river exposes some better cards.

Note: River refers to the extra two cards dealt in Texas hold ‘em poker which the player uses if it gives them a better hand

Tech Bubble of the 2000s

A few days ago, I read “As Technology Deal Booms, the Talk Turns to Bubbles” by Heidi N. Moore. Within the article, she reported that most within the tech industry consider the current era a bubble. This bubble has been crafted by the rise in social media integration, ad placement on such social media, and smart phone networks. Technology deals have peaked through the roof, and venture capitalists are seeking out companies that take advantage of this bubble. The article goes on to report that many including VC John Doerr consider this bubble “a third wave of innovation” whereby “ the previous two waves were the PC revolution…and the internet boom”.

Today, I read “A Business Creator Sees Big Returns from Social Media” by Darren Dahl. The article profiled Eric Lefkofsky, an entrepreneur with a worth of an estimated $750 million. He has made the bulk of his wealth from starting up businesses that take advantage of advanced accessible technology, such as Groupon. The most important point of the article is Lefkofsky just started Lightbank, an investment firm which “invests only in early stage technology companies that are built around social media”.  The rest of the article is a short interview whereby Lefkofsky states the belief that all businesses should be using social media and using it well.

Social media has crafted the flow of money. I agree with others in the tech industry that we are living in another bubble. Almost all new companies spawn their internet alter egos and clone themselves using social media. This has led to advertising doing the same thing. And now, investors are seeking social media focused companies. All the money is flowing down this river.

Its not too much to expect businesses to advance using social media. The other night, inspired by my boyfriend playing “Call of Duty: Black Ops”, I explored the game’s twitter page only to find the page to be subpar. I was disappointed. "Call of Duty: Black Ops" is an international multiplayer communal game and should be using social media frequently to advance that community. This is my point. Social Media should be used where it makes sense.

While Lightbank is a great idea capitalizing on the moment, it worries me that technology might be in a moment. A moment whereby any and everyone is creating apps to make money from ads and everyone is connecting their businesses to social media to keep up with theJones, Inc. Hopefully, (not to be sarcastic) this bubble will not burst.  Let’s not forget, the dot-com bubble and burst of the 90s. And if it does burst, most of the businesses that will survive are the ones who used social media as an aspect of their business but not as their entire business.

Note: clearly, a few social media focused businesses would survive a social media bubble burst, which is why I stated most and not all businesses.

Decoding Jay-Z

This week Decoded, biographical and lyrically focused book about Shawn "Jay-Z" Carter, released. The book is co-authored by renown Hip Hop journalist Dream Hampton, although not credited on the book. As a Jay-Z fan, I was well aware of the release but I am quite surprised by the business press he has been receiving. My surprise is not because he doesn't deserve the press; it's due to the way the business community has been surprised by his business savvy. Jay-Z did not just become a mogul or just open up his business in the 2000s. He has been a legitimate business man since the founding of Roc-A-Fella records in the 90s. All of this business press has been long overdue.
This is not a post to have everyone like Jay-Z or listen to his music. In fact, this is strictly about business. I don't know the reasons that Jay-Z is only now or at least in the last couple of years beginning to gain business recognition, considering his many years of business experience. All I can say is if you or some one you know just found out that Jay-Z owns multiple businesses, is worth millions, and has done some notable business deals, I am afraid to say you are late. You don't have to read Decoded to understand the business mind of Jay-Z. But I would suggest taking some time to google him and decode his business mind for yourself.