Wednesday, September 27, 2017

Crowdfunding Product Review: Globe

Browsing the interwebs, I came across this fun Kickstarter for an LED sphere, called Globe.

It's not a particularly flashy product, but I thought the campaign itself was interesting because it looks like a classic DIY project that Kickstarter was originally made for.

These days, many of the high-profile campaigns are just marketing and sales devices for larger companies. A lot of products are already developed and are just using crowd-funding for advanced sales.
While I can't object to the opportunism of using the platform for this purpose, I still lament what it has become and get excited when I see a true DIY project.
Also, I was pleasantly surprised to see that the development timeline is very reasonable for a new hardware product and expect the creator, Edward Catley, to be able to deliver on time.

With 5 days to go, the campaign has raised £20,427 of its £60,000 goal (at the time of publishing), so I don't think it'll make it, but I admire Catley's initiative to try and make some money off his hobby.

At its most basic, it's a spinning disk with blinking LEDs.
However, having a spherical display is pretty cool and isn't just limited to the Earth or other planets.

I mean... Nyan Cat

There are dozens of spinning LED kits out there, but the most prolific are the basic 2D displays.
I'm sure many of you have seen the LED clocks:

A 3D sphere is not something I've seen before, but apparently they're already commercialized.
Still, pretty cool that the creator made one himself.

£595 (about $770) is a pretty steep price, but on par with the others I saw.

Most vendors are positioning them as marketing devices. This makes sense as I can't imagine too many individuals paying for one to sit on their desk
But apparently at least 33 people have on this campaign (at the time of publishing).

So it's not very flashy or particularly original, but again, I admire Catley for trying to do something with what I'm guessing is a hobby.
$26,000 is nothing to sneeze at, but didn't reach his all-or-nothing goal. Because it's a pet project, I bet Catley could still sell one-offs to backers, so maybe he could contact backers to do so after.

Side Note: If you're interested in hearing about side projects that turned into significant sources of revenue for people, I recommend listening to the podcast: Side Hustle School.
While not every project is going to be successful or make money, its encouraging to hear about success stories to motivate you to continue hustling.

Monday, September 18, 2017

Amazon should buy Zara... or not, and put them out of business

At the suggestion of my friend Josh, who also publishes a great food newsletter, I gave this recent Recode Decode episode a listen.

I'm typically a fan of Kara Swisher, but not a huge podcast listener. There is a lot of  content out there and it's hard to find the nuggets among all the noise, so if you have any suggestions for good podcasts/episodes, send them along!

In this episode, Swisher speaks with Scott Galloway, a professor at NYU and futurist of the tech scene. Swisher noted his prediction of Amazon's purchase of Whole Foods just a few days before it happened.

They discuss a lot of fun stuff, at one point mocking Mark Zuckerberg and noting his oddities, but one of the things that caught my ear was Galloway taking out his crystal ball again and suggesting that Amazon should buy Nordstrom next. He noted the relatively low price and strong branding as reasoning, but both Galloway and Swisher agreed that Amazon is not likely to make another big purchase. Instead, it will probably digest the Whole Foods acquisition and see what they can learn from it first.

I agree that Amazon will likely make another retail purchase, but I don't think it'll be a department store like Nordstrom (if anything, maybe Sears). Instead, I think they're more interested in a business that more closely mirrors their own and has equally impressive logistics knowledge: Zara.

Zara has been case studied to death by business schools and drooled over by logistics professors for years. Their "fast fashion" expertise and time to market is unparalleled; often they beat designers to market with their own copycat pieces.

Zara's low inventory strategy would play well with Amazon's logistics management system. Using limited supply and exclusivity, Amazon could drive faster purchasing and delivery quickly to customers who want the latest designs. However, Inditex, Zara's parent company, has a market cap of over $100 billion; and Zara has been bucking the retail tailspin and is actually growing; so a buyout is unlikely.

Oddly enough, this article came out a couple days ago while I was contemplating this. Worth a quick read (only two paragraphs), but it highlights a new Amazon initiative where you can purchase clothing you see during a fashion show and get it via one-hour delivery.

This could hint at Amazon's actual strategy: not buying a brand, but developing their own reputation within the fashion community and become a go-to retailer for designers. This would also eliminate the retail middle-man, something it has done consistently across industries.

To become successful in fashion, I see Amazon needing to do three primary things:

1. Get product to customers quickly. Obviously, Amazon has this and can do it better than anyone in the world.
2. Get products in inventory quickly. In order to sell quickly, they'll need the inventory in stock almost instantaneously. They're not there yet, but it could acquire or partner with companies and manufacturers to streamline this. Possibly consider niche companies like Ministry of Supply for their IP.
3. Get access to designers. Amazon could follow Zara and hire their own designers to quickly replicate whatever's seen on the runway, however I suspect they will more closely replicate what Target has done and partner with designers to get designs before they're presented and get exclusives.

There are certainly barriers, but if Amazon is serious about fashion and clothing, they're not anything it can't overcome and quickly take over the market.