Last weekend we had Ali Pincus, co-Founder at One Kings Lane, and Greg Fant, their Chief Marketing Officer, stop by our Strategic Brand Management class and speak about their brand and how they built it over time and where they plan to take it next. It was fascinating to hear about the origins of the company – how Susan Feldman met with Pincus and founded the company based on her own frustrations with purchasing home furnishings after moving to LA from New York. At the depths of the recession in early 2009, they raised money and went about building a brand around a flash sales site with a name that stood for a street address that people could identify with. They rode the wave of flash sales growth for the next couple of years. With over $100MM in sales in 2011 , they are now a name to reckon with in the curated home-decor space, and are rapidly growing.
It was interesting to hear from Greg how they surveyed their customer base, followed around some of their key customers and held focus groups with a difference (at art museums around candle-lit get-togethers) to understand what motivates their core base. We also got an exclusive look into their new national branding and awareness campaign that got launched last month with a cool ad campaign along with Wieden+Kennedy. Greg has the perfect mix of branding background from the mother of all brands (Coca Cola) and digital marketing (eBay) and walked us through their customer life cycle as they tracked them from teenage years to old age, and showed us how their new brand campaign will try to appeal to each of these customer segments. It was also pretty cool to see how despite a huge bounce rate on their home page thanks to a sign-in requirement, they are still able to generate such impressive growth fueled by repurchase rates among existing customers. The key would be to see how they can open up the site to folks without the sign-in requirement to generate one-off purchases from less loyal customers, but increase their customer base to a much larger number. Not surprisingly, we had a few classmates who raved about their experiences with the site and how loyal they were as customers :).
With the growth of sites like Pinterest, the expectations for traditional e-tailer sites to have a visually enriching shopping experience is only going to increase. At the same time, designer brands that offer selective inventory to sites like OKL might want to offer these from their own portals as well, not to mention launching showrooms to experience more lucrative products such as furniture, which is still a less-than-perfect shopping experience online. Add to that the travails of adding free-returns to these bulky items like the other popular sites such as Zappos and Warby Parker who sell lighter items, OKL has its work cut out for itself for 2013 as they try to grow towards profitability. What they have going for them is a strong brand that their core base strongly identifies with, a unique curated shopping experience, and a hope based on customer surveys that the brand is elastic enough to grow into several adjacent customer segments and attract newer customers.
Here’s wishing them the very best as they launch this new branding campaign and scale new heights!
One of the fascinating sideshows during the elections was the attack on Nate Silver and his predictions, and the subsequent validation of his model (and that of others who predicted with the same accuracy as well). Needless to say, his book, is now on the top of most bestseller lists as people try to figure out whether Nate was really a witch or not.
Hidden beneath the excitement of validation is also an underlying dichotomy in statistics – that between frequentists and Bayesians. While the details of this might be a bit too technical for a blog post (the earlier reference and this one can do a much better job than I ever can, if you are interested), it essentially boils down to whether you estimate the probability of a parameter given data, or whether you estimate the probability of the data given a parameter. Also if I remember my statistics correctly, a frequentist interpretation of the world requires an assumption of ergodicity, which is hard to arrive at without carefully choosing your sample populations for surveys. This article might explain the difference in easier terms.
Interestingly enough, recent research with toddlers shows that our early years comprise of Bayesian techniques of learning about the world. No wonder academics that have followed this fork in the road are gloating over the Silver lining to their cloud.
Where else is this a big deal? Take a look at the discussions about whether the God particle was indeed detected at the Large Hadron Collider or not as the two techniques collide.
I wrote about similar issues in a different context in an earlier post.
Today, the second largest democracy in the world went through the motions to elect their next leader. Like the largest democracy in the world, this process wasn’t all “free and fair” either. Several creative methods continue to be used here as well to reduce turnout and influence outcomes. The only variation seems to be that this system has had over 200 years to bake its methods to have them be more sophisticated. As opposed to outright voter fraud in the more nascent democracy in South Asia.
Another disturbing trend is the lack of choices on this side of the world, and the fragmentation of choices on the other. Here this results in third party candidates being wiped out of any debates, national media coverage, or even conversations at the national level. There the “third party” candidates are all that count, and the larger parties court them aggressively to slap together a coalition of regional parties to meet the majority requirement to form a government.
As envisioned by the human civilization that thought-up democracy and refined it over the years, this process was supposed to be much different from what it is today. The price to pay to get in the game at these levels is so high that most mortals cannot meet that without raising money aggressively from vested interests to whom they remain indebted, thereby making it harder to be objective. Lobbying, favoritism and looting all that one can while in power seem to be natural extensions of the process, to recover the investments made in the candidate.
Answers are not easy to come by. Federal funding of all campaign expenses would be a start. Uniform rules for voter ID, voter registration and polling booth requirements would help safeguard voting rights for all, that we have achieved after decades of struggle by millions of people who wanted the right to a representative democracy. Having more options on the ballot, and giving other options more airtime would benefit as well and force the popular two voices to face tougher questions and keep them honest rather than this dance of well rehearsed moves that we see every two years between the two Goliaths.
All said and done, today is the day that the common man wins. His vote sent a man back to the big white mansion and the other to one of his big mansions. What remains to be seen is if any of the hopes and aspirations of this common man will materialize over the next four years, or if we will again see a recurrence of politics as usual, as it happens in the other democracy across the world as well. How do we ensure that we have not only a representative democracy where we get to choose who represents us, but also have an accountable democracy where we hold them accountable for wasting our dollars or disrespecting our mandate?
Now that I’m in school again at a stage in life where it is not deemed by anyone to be critical to my future or career or any such thing, I get to enjoy school more and ponder over the larger issues of how and why what I’m learning came about.
One such subject where there are fascinating back-stories is finance. If you look at the progress the theory of finance has made in just the past sixty years, it is incredible. So there it was that I decided that as part of general awareness reading for my investment management course this term with Prof. Geczy, I’d spend time understanding the history of modern finance. And there could be no finer source to learn it from than Peter Bernstein’s book Capital Ideas: The Improbable Origins of Modern Wall Street. Written to read like a page-turner thriller (as much as a book on finance can be a page-turner), this book starts in 1900 with the work of a French mathematician, Louis Bachelier, and his doctoral work that showed that under ideal conditions the mathematical expectation of the speculator is zero. This work stayed long forgotten for a long time, until economists in the US discovered it and started buiding upon this foundation. Unfortunately for Bachelier, the financial markets were far from the focus at Sorbonne, and he had a tough time finding a good academic position. Even his teacher Poincaré could not grasp its significance.
Markowitz faced similar trouble 52 years later, with his thesis on portfolio selection that transformed the world of modern finance by relating risk and reward through mean-variance analysis. And even more curiously, his work was almost matched across the big pond by A. D. Roy at Cambridge, without the full insights and depth of analysis. I wouldn’t want to summarize the entire book here, but the anecdotes from the lives of these academics and practitioners is fascinating. The book runs through the familiar cast of characters – names, many of which fill the ranks of Nobel laureates in economics – Tobin, Samuelson, Sharpe, Black, Scholes, Fama, Miller, Merton and Modigliani. It also paints a fascinating picture of characters who were not as well known to an outsider like myself – John McQuown, James Vertin, Barr Rosenberg, and others who were early pioneers in the portfolio management world. It retells the story of Leland, O’Brien and Rubenstein and how portfolio insurance was invented and its role in the stock market crash in 1987.
All in all, it makes for a fascinating read if you are interested in knowing how these methods were invented and how serendipity, perseverance and sheer luck helped make them happen. It shows how computers played such a vital role in accelerating research in returns on financial securities, and measuring and characterizing risk more accurately. Bernstein followed this up with a sequel in mid-2000s, but more about that in another post.