Thoughts on Entrepreneurship & Life by Sam Huleatt

Saying Goodbye to Old (Retail) Friends

 

It was sad to walk into Dean & DeLuca this past week, seeing the empty shelves and signs indicating an impending shutdown. As pondered why in the world I felt an acute sense of loss over a random retail brand shutting down, I started to think about neighborhood retail as a sort of secondary social circle.

We all likely have places we associate with specific habits, friends, situations or emotions. After having worked in Soho for well over a decade, Dean & DeLuca became a friend I relied on in many situations. During the Holidays I loved the vibe of tourists and locals searching out that perfect gift for a loved one. In the summers I loved a basil chicken salad they made and which I have tried in vein to replicate numerous times. More often than I’d care to admit, I’d reward myself after some small success with one of their dangerously good ginger cookies. Walking through the largely empty store brought back many of those memories. Dean & DeLuca was a hub of activity in Soho and I will miss it, insanely overpriced produce and all.

Last year I had found myself feeling a similar “loss” over the Brooks Brothers in Batter Park closing. That Brooks Brothers store played a small but meaningful role in my life. The first suit I was able to afford on my own was purchased there and I still remember how the staff made me feel like a rockstar as I made what was a huge purchase for me at that time. That particular store also played an amazing role (and here) during 9/11. It was a downtown shopping staple for many of my friends as well as generations of bankers, lawyers and other suit wearing workers below 14th street. I could go on with a list of brands and places that play a regular role in my life: from the card store I count on for the perfect birthday or wedding cards, to my gym (I have had three CrossFit locations close on me), to several local (non-chain) coffee shops where the baristas know my name.

Clearly many will read this and laugh at some New Yorker’s ‘sadness’ over a luxury grocery store and men’s clothing store shuttering. But in New York City —- and probably most other cities and towns — physical place and brand play a significant and perhaps under-appreciated role in our lives. Progress insures the only true constant is change, but I personally hope that the death of retail doesn’t lead to many more of my friends suffering similar fates.

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Amazon Credit As Global Currency

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I’ve worked with a developer based in Ukraine for close to 10 years on both personal and business projects. I used to send him payments via PayPal, but PayPal no longer works in Ukraine. Two years ago we moved to Western Union. I’m pretty sure Western Union is about the worst service out there – I have never had a payment go through without some issue. However, this last payment took five calls and 25 days before they told me my payment was canceled. I’d had enough. The developer (also completely frustrated) suggested I send him an Amazon “e” gift card. It had never occurred to me that even in Ukraine Amazon is ubiquitous.

The transfer went through in about 30 seconds.

Hats off Amazon, and perhaps a new global currency.

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Building a Virtual Hotel Brand

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I prefer hotels over Airbnb, especially when traveling for business — but this could change…

I posit that I (and many other mid to high-end business travelers) could be swayed to choose an Airbnb over a hotel with the advent of a “virtual hotel brand” built on top of the Airbnb platform.

Several recent trips to San Francisco and Austin have left me sticker shocked by hotel prices. A nice hotel in either city, can be $400+ mid-week. It seems sort of crazy and yet I have still paid the hotel rates. Why? I prefer hotels because: I know what I’m going to get, logistic simplicity and amenities. For me, Airbnb also still has a bit of an image problem: I tend to think of it as a “budget option” where I need to sacrifice all the aforementioned. This is where a virtual hotel comes into play — provide curation/standardization, logistics and amenities surpassing old-school hotels while leveraging Airbnb.

When you’re on a tight travel schedule, knowing what you will get is super important. People will pay sky high prices at say, the Four Seasons, because they know the property, experience and service will consistently be first-class. To help standardize business travel on Airbnb, I could see someone effectively curating a number of properties in different cities with great locations, near areas people typically conduct business. I’d come to trust this new hotel brand to book me a property sight unseen, without my needing to look at maps and read reviews and go back and fourth with the owner. This new hotel would make getting the key a breeze — perhaps they would have an Uber pick me up at the airport, and the driver would hand me the key prior to dropping me off at the front door.

Next, the virtual hotel would layer on value added services mimicking (or exceeding) a hotel. Rather than the host’s potentially crappy towels, the virtual hotel would have arrived in advance, checked out the apartment and equipped it with high-end towels, soaps, etc, and maybe added a few local beers to the fridge. It would also provide a daily maid service (optional) and contract with great neighborhood gyms and / or yoga studios, baking these amenities into the price or charging me on demand through an app. The virtual chain might even move beyond typical hotel perks to offer say booking meeting spaces (WeWork or Breather), or potentially providing a curated dinning experience I’d otherwise not be able to find on my own. Some of these demand amenities, I can obviously already book on my own, but making the experience simple, curated and frictionless on the payment side would be great.

A virtual hotel chain like this could easily win my business travel loyalty. I think at scale, the margins would still back out with lower price points than a typical higher-end hotel.

Thoughts?

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Seeking Whitespace in Technology

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As an early adopter of new technologies, now and again I discover some “whitespace”; a web or app that seems to provide a disproportionate ROI for my use. Tripit is a great example: I travel frequently and rely on my calendar to stay on schedule. With virtually no additional overhead, Tripit grabs all my travel bookings from Gmail, aggregates it in one place, with all the details, and allows me to easily share with family or co-workers. That’s a huge ROI in the form of time savings for only $40 a year. Since Tripit mines Gmail and knows my preferences, I also don’t have what Sam Lessin recently referred to as “hidden costs” in terms of mental overhead, i.e., manual setup and needing to make corrections all the time.

Software solutions that save me time, like Tripit, are awesome but an even more interesting whitespace dynamic is with “network” models. A network model is that where the software or community benefits from each new user added. In these types of models the earliest adopters can reap huge rewards in terms of ROI. While saving time is extremely valuable, ROI from network models could also be in the form of monetary compensation, career advancement or other.

Quora is a great example of huge ROI from early adoption of a network model. In the early days Quora was a small group of silicon valley insiders. It was not uncommon for anyone on the network to be able to ask a question and receive an answer from a well know startup executive or venture capitalist. Further, early on you could message anyone directly, creating an amazing networking opportunity. Answering many “80/20” type questions early led several of my answers to become “Quora Top Answers” giving me at least the appearance of subject matter expertise. It wasn’t so much that my answers were amazing, but rather, I benefited from being early, and then rose the social proof and compounding effects of others up-voting responses.

Another great example of finding whitespace was an app called Ohours. Ohours provided a way to offer “office hours,” essentially opening yourself up to 20-minute coffee sessions with anyone who wanted to sign-up to chat with you. Since it was originally a small group of like-minded NYC techies who knew of it, the early meetings were phenomenal. I’ve stayed in touch with many great entrepreneurs and investors I met through it including @werdelin. Unfortunately, over time and arguably as it grew “more popular”, the quality of folks dwindled and ultimately the project was tabled.

Finding ROI Today.

It’s been a while since I’ve found a great network whitespace opportunity. Angellist and cryptocurrenices are two I have been experimenting with. In terms of point solutions, especially those that allow you to leverage software to save time, I would highly recommend Clara. My company works extensively with folks overseas (Israel, Dubai, Brazil, etc) and thus daily I am scheduling meetings across time zones. Googling time zone conversions, waiting for responses, last minute reschedules, coordinating dial-ins/screen shares, talk about a pain in the ass. Enter Clara. For a little over $100 a month, Clara has completely automated this process for me (check it out for more details).

What software or services do use that offer whitespace opportunity?

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Low Friction and Invisible Spending

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Apple Pay will be a game changer. It was by far the most interesting thing IMO to emerge from the recent Apple announcement. Recall that great hardware is often simply a loss leader for the transactions it enables. Adoption may come slowly, but it will come.

I love removing friction from transactions. I bought a Coin (probably already extinct) and love using apps live Cover and Uber to ‘invisibly’ make payments. However — there is no doubt in my mind that the decreased friction increases the frequency (and possibly size) of my transactions. I’ve found myself on Amazon buying things I don’t really need simply because Amazon and Prime make it so easy. I’m extremely fortunate that I can afford to make some needless purchases here and there but I’m also lucky that I grew up understanding the value of money and thus have decent self-control as to how I spend my earnings.

My concern with new technologies like Apple Pay is that while the financially fortunate relish making their lives easier (often by spending more to save more time) — many folks can’t afford to spend more. Period. People love to say ‘time is our most precious resource’ – but I believe that’s only true to an extent before there are diminishing returns.

Impulsive purchasing is a real problem for many and there’s no question it is exacerbated by making spending fun, easy and invisible. Bored? A $2.99 game or new song is a click away. Hungry? Seamless web is so much easier than cooking. Just the ease with which we can evaluate and buy items on Amazon means we don’t need to wait for the annual shopping trip to the big city. Impulse buying and not bothering to return is like a new ‘breakage’ model. While many middle to lower income folks cannot currently afford an iPhone, frictionless, invisible payments will no doubt be eventually be pervasive across most phones. I think this could be a real issue for younger generations who begin to spend money that they never really see and who get sucked into the cool new app that provides some marginal benefit (slight time savings or slightly elevated level of service) for only a few dollars. Those dollars add up quickly.

It also all makes you wonder: who ultimately bears the responsibility?

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     © Copyright 2015-2018 Sam Huleatt