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Listen Local: A Pandora for Live Music

27 Jul

I’ve always been a huge fan of music, but never a big concert-goer. Personally, I prefer listening to music to watching it, but when I do make the occasional trip out to support my friend’s band or am convinced to buy tickets to a show, I always end up having a good time. I would love to be able to check out more local bands, but where do you even begin?

In DC and every other major metropolitan area in the country – and around the world, really – there are numerous music venues hosting dozens of bands of various quality and success every week. At some point, as I’m sure psychology professor Barry Schwarz would agree, the seemingly unlimited options for live music entertainment become overwhelming to the point where making decisions becomes an anxiety-inducing endeavor since you’re always left wondering, “Did I make the best possible choice given all other existing options? This band is good, but what’s the opportunity cost of staying here versus trying to catch the 9:30 show at the venue down the street?” This might explain why you won’t see too many economists crowd-surfing at music clubs, but it doesn’t address the issue of choosing which band to check out the coming weekend.

Sure, there are myriad “music discovery services” such as TagWorld and, not to mention the recommendations from friends’ Spotify and YouTube posts to Facebook, but these services are largely still designed for mainstream, studio-produced music. What about the local music scene? Gruvr helps users locate local concerts, and countless other websites profile and spotlight local musicians, but all of these options are largely aggregators of music. As in other digital media, I think it’s time to evolve from aggregation to recommendation.

What if there was a Pandora for live music?

Just as Amazon can leverage my purchasing and browsing behavior to make (often spot-on) recommendations, Pandora “learns” from users’ listening behavior and plays music that the user is likely to enjoy due to similar traits such as melody, harmony, form, composition and lyrics.

Pandora’s algorithm uses almost 400 attributes to classify each song in its library, and codifying each song required about 20-30 minutes of human analysis per four-minute song. Clearly, this level of granular analysis cannot be feasibly applied to a Pandora-like service for live music, but I think a combination of self-identification and crowdsourced voting would be sufficient to build a product that users, musicians and venues could all greatly benefit from.

A typical band interview always has a question along the lines of “So how do you define your sound?” Bands, tasked with the challenge of defining and labeling their art, usually respond with a reference to other bands that serve as reference points for the interviewee and readers. The Local/Live Pandora I’m imagining would allow bands (or their promoters and fans) to self-identify with genres, artists or songs catalogued in Pandora’s Music Genome Project. Users can weigh in regarding the degree of accuracy of bands’ self-identification, voting whether the sound is similar and making recommendations for a better match. Over time, enough data would be entered to produce a fairly accurate analysis.

Because the point of the service is to introduce users to bands to see live, the service would leverage smartphones’ geo-location features and the algorithm would only introduce users to bands that are playing within a certain radium and within a certain timeframe. You could also imagine being able to configure personal settings, so if you were visiting Chicago in a few months, you could get a sense of the local music scene and stumble upon a new band to check out.

Obviously the production quality would not be as high as it is on Pandora or similar services, but the point isn’t to use the service as a music player; instead, it’s a tool to identify bands to see live. This implies unique revenue streams that could be harnessed. For example, imagine you sign into your account and the service pushes you a band that you might be inclined to like, since the band or song has been identified as being similar to many other bands and songs that you have already liked (perhaps pulling data from users’ iTunes, Pandora and Spotify accounts). A notice would pop up, notifying you of an upcoming show. You could then click to purchase tickets, and the service would take a cut of the ticket sale; in effect, the service becomes outsourced marketing for local venues, who would be willing to trade a share of ticket sales for increased attendance (and therefore increased bar sales).

Is it just me or is this music to anyone else’s ears?


“To Done” Smartphone App

16 May

"To Do" list 2.0, but with room for improvement...
Everyday, we wake up with a list in our heads of things we need to do that day. There are groceries to buy, errands to run, work tasks to complete, and happy hour beers to drink – some things on our “to do” list are more of a chore than others, but they are all things that need to get done one way or another.

Some of us write reminder notes on our hands, scribble grocery lists on sheets of paper or use our smartphones to remind ourselves of what we need to do. Oftentimes any or all of these methods are sufficient to remind ourselves what we need to do , but just because we remember to do a task doesn’t mean it’s not a pain in the ass to do so. We’ve successfully leveraged technology to make our work more efficient (I agree, this is highly debatable), so why not use it to make our “to do” list easier, cheaper, and more fun?

The “To Done” smartphone app I envision does just that, and has a unique business model with multiple revenue streams to boot. Yes, there are literally dozens of “to do” apps and productivity-boosting apps out on the market, but none of them fully leverage the inherent capabilities of our wallet sized computers. What these apps lack, and what I’m jonesing for, is the ability for the items on my “to do” list to proactively reach out to me at the most opportune times and remind me that I need to buy X, do Y, or go to Z. Phone alarms and calendar-synced alerts are a step in the right direction, but what good is it for me to have my phone remind me at 2pm that I need to buy toothpaste when I’m in the middle of an afternoon of meetings? Not only will I forget by the time I’m actually out the door, but I’ll also be annoyed by the inefficacy of the system and abandon it.

What I propose is to leverage the geo-location services of smartphones and a database of product SKUs and conditional commands to build a better and more proactive “to do” list: the To Done app (because it makes your tasks so easy to check off that you might as well consider them done! Thanks but no thanks Mr. Draper, I have this one covered).

Take my list of tasks for example. What if I could choose from a host of SKUs for my favorite toothpaste brand, my laundry detergent of choice, or anything else I need to buy? To Done would partner with retailers like CVS, Target and Harris Teeter, among others, to create a vast database of all the SKUs carried by those retailers. I could then choose a specific product, and anytime I walked by a CVS, for example, my phone would ping me: “There are 6 items on your To Done list at the CVS 150 yards away at 888 Smith Street.” At that point, you could pop into the store to pick up your items, or even better, you could purchase the items on your phone and scoop them up. The latter would require a closer partnership with the retailer’s POS system, but this is clearly where the mobile payments industry is heading anyways, so perhaps a third party developer could be brought on board to add this functionality.

Retailers such as nation-wide pharmacy chains and grocery stores would be great partners for the development of this app, because it would give them incredibly valuable insights into the purchasing habits of local consumers. Over time, they could identify trends such as “Washingtonians love Crest more than Colgate, and they buy a ton of Cheerios in January but not so much in August,” trends that could allow them to make strategic decisions about their inventory management systems. Access to consumers within a close distance of their stores is very valuable to retailers, who would be willing to share a percent of sales – or perhaps pay to join a platform to access these consumers  – made through the To Done app. Additionally, retailers could provide targeted discounts or leverage their customer loyalty systems incentive app users to buy shaving cream at this CVS, rather than that Duane Reed across the street: “Hi there, it looks like we have 6 of your To Do items in stock; why don’t you buy them now and we’ll give you 15% off!?” Sounds good to me.

In addition to facilitating the purchase of products on your “to do” list, To Done could help you with other tasks based on your location and/or pre-defined parameters. For example, let’s say you need to water your house plant. Why not have that be a recurring To Done item and have the app ping you every other Tuesday when it detects that you are at your house? The applications of this type of proactive, location-based offering are endless, and with the right algorithms, the To Done app could get smarter over time by drawing insights around patterns in your purchase and task history, making recommendations where it sees fit.

Developing the app itself is not a significant investment itself, but landing the high-level retail partnerships that truly make the app a valuable tool would require a talented business developer. Additionally, partnerships with players such as Foursquare, Google and others would ensure the app is a truly innovative offering, and not an “also ran.”

What do you think – anything you’d love to see checked off your To Done list??

White Space Opportunities around Digital Textbooks

20 Jan

“Get NOOK Free!” reads the banner ad on the New York Times’ website. Barnes & Noble, creator of the NOOK e-reader, has partnered with the New York Times to give away its NOOK Simple Touch with a 1-year online subscription to the NYT. Why would Barnes & Noble give away a product that is already heavily discounted at $99? Simple: e-readers are not profitable products, they’re valuable service platforms.

As we’ve recently reported in Fast Company, incorporating services into traditionally product-centric “design, manufacture, market” models–or replacing the product entirely with services–allows companies to create value for their customers as well as their shareholders. In the instance of media, we’re seeing that by replacing physical products (books, CDs, DVDs) with digital equivalents, companies that create service platforms accessible via consumer electronics are able to capture revenues previously owned by retailers and publishers.

The closing of Borders and the declining sales at Barnes & Noble stores indicate that the digitzation of media isn’t a trend, but instead a shift towards a new model in which traditionally tech-centric firms (Apple) have entered the media business, and retailers (B&N) have entered the tech business.

Apple’s announcement on Wednesday that it would take on the $10 billion textbook market by turning its iTunes U app into a platform for digital textbooks further signals the attractiveness of the white space opportunities available around digital service platforms. In addition to low price points ($14.99 for textbooks), Apple plans to launch a self-publishing tool called iAuthor. E-textbooks are a palatable proposition for consumers – not only are they less expensive, but they’re also more portable, interactive and easily integrated with other products and software – and to those who sell them.

Digital textbooks are attractive to Apple, and its competitors who plan to enter the market, because of the revenue streams and unique business models that can be created around them. One can easily imagine that the $14.99 textbook sold on iTunes U could be supplemented with additional question banks, content updates, study guides and videos – high-margin add-ons that would no doubt add millions to Apple’s coffers. It will be interesting to see how these companies develop innovative partnerships with both schools and content providers, and how the role of the physical product used to access digital content will evolve.

Do you think we’ll see Apple pull a NOOK-like move, and give away iPads to university students in the near future? It does seem far-fetched, but there is no doubt that as price points for the increasingly commoditized products fall, the market will turn to the pasture where the new cash cow grazes: digital service platforms.

Fab Labs – Democratizing Manufacturing

15 Dec

While traveling through the states of Sao Paulo and Rio de Janeiro in Brazil last week, I often found myself dwelling on the challenges and intricacies of the supply chains of various goods and services in both the densely populated cities and the sparse, remote areas that I visited. As far as emerging markets are concerned, Brazil is one of the most developed, but its infrastructure—though rapidly developing—and its trade policies dictate that goods are often priced at a premium to their perceived fair market value. For years, multinationals have struggled with the challenges confronting distribution in markets such as Brazil, but what about the local entrepreneurs and manufacturers?

I spent two days on Ilha Grande, an island paradise a few kilometers away from the mainland, 45 minutes by high-speed water taxi. Everything anyone could need – tourists and locals alike – had to be brought in by boat. I watched from the pier as crates of food, souvenirs and various widgets were hauled in by hand, one load at a time. Not only are these goods more expensive because of the high costs incurred in transporting them to an island – as Manhattanites can testify – but they also dictate a larger environmental footprint.

“Downtown” Ilha Grande

I was reminded of a recent talk at Digital Capital Week where RTKL architect Kashuo Bennett discussed the concept of “fab labs”, small-scale fabrication laboratories that democratize manufacturing by providing local innovators with access to digital fabrication technology and rapid prototyping.  Fab Labs, which originated in MIT’s Center for Bits and Atoms, have opened in dozens of countries around the world, and their potential applications in developing countries and remote regions are particularly interesting. Instead of paying significant premiums to move goods around the world to places such as Ilha Grande, perhaps local entrepreneurs could harness local Fab Labs to design, develop, and manufacture products.

The application of Fab Labs in developing countries and elsewhere holds numerous benefits, as well as significant challenges that cannot be ignored. Firstly, fab labs allow local entrepreneurs to stimulate the local economy. When goods from large multinationals are sold in a given market, that money flows back to the corporations, rather than staying in the local economy; however, if products are designed, manufactured and marketed locally, the economic benefit created stays in that market. Additionally, one can argue the sustainability aspect of manufacturing locally, as well as the benefits of educating, training and hiring local workers needed to manufacture Fab Lab products.

Granted, it is a pipe dream to think that any community could just give up trade and manufacture everything locally – particularly given the various resources and inputs needed to manufacture anything designed in a Fab Lab in the first place – but it does seem that there is significant momentum behind such movements, and myriad markets in which the application of such “local” elements could produce innovative solutions.

Mytinerary – A Smarter Way to Travel

14 Nov

Is there anything more fun and rewarding than traveling to a new city or a new country? Not in my book. Everyone and their mom loves to travel, but there are definitely a few pain points along the way that don’t necessarily take away from the trip, but they do create an opportunity to improve the overall experience.

What does the average travel process look like for most people? There are several stages of each trip that can each be as frustrating as they are exciting, which is why I’ve been thinking about an idea for a travel website and app called “Mytinerary”. For most trips, there is a meaty research and planning phase. This can be especially difficult if you are arranging a trip with a group of friends. WHERE do we go? WHAT do we do? WHEN do we go? WHERE do we stay?  There are myriad travel planning books, websites and tools that assist in the process of research and planning, but they do not address many of the intricacies of traveling – especially traveling abroad. More on that later.

After planning, the real fun begins – the actual trip. I can only speak for myself, but arriving in a foreign airport spackled with advertisements from unknown companies in foreign languages, navigating a different public transport system and finding your way through unmarked neighborhood after neighborhood, and settling down in your temporary digs before taking off to explore, work, feast, drink, meet up with friends and party (or whatever else one might do on a trip) is better then Christmas morning, Thanksgiving dinner, and other analogy-worthy awesome events all rolled into one.

Finally, upon returning home, you share your experience. You upload your pictures to Facebook, email them to grandma, and tell everyone within earshot how crazy that one night was when you met a few locals, or how much better the gelato was in that small Italian village than in your boring American city. You’re so cultured and everyone knows it!

The thing is, these three phases are all addressed by different platforms. What I propose is a comprehensive website, largely integrated with existing platforms and networks such as Facebook, Foursquare and Yelp (no need to reinvent the wheel!) that goes beyond aggregation of resources to actually provide targeted recommendations for your travels.

What inspires you to travel, or to choose a particular destination over another? Increasingly, our travel decisions are influenced by our friends. How many times have your friends posted pictures of exotic locales, prompting you to ask “Where was that? What did you do there? Would you stay there again?” Sure, we can go to Lonely Planet and similar travel sites to research, but we are more inclined to value the opinions of our friends, because we can identify more closely with their experiences. A young college student looking to hostel jump and party until 6am will have a different agenda than a married couple looking to indulge in the local foodie scene, yet each is presented the same “top 10” lists for the cities in which they plan to travel. What I propose with Mytineray is a more targeted, recommendation-based travel planning and sharing application that understands your individual travel needs and preferences, and allows you to build a trip that will be more fun and interesting to you.

Recommendations can be based not only on your travel profile – which could be built by answering a series of questions, or reflecting on your previous trips – but also your location. For example, if you are planning a trip to Washington DC and staying in the Foggy Bottom area, it would be valuable to know the travel time required to get to a restaurant on Capitol Hill, or how long it might take to get out to Old Town Alexandria, Virginia. I envision Mytinerary having a “drag and drop” feature, where you add activities to you itinerary, and a schedule is created based on the average time it takes to commute from your current location to the venue, participate in whatever event you choose (a recommended 1 hour to tour the Phillips Collection, 1.5 hours to dine at the fancy French restaurant, etc.).

There is a significant “local” component inherent in Mytinerary as well. Just as millions of Foursquare users check in at sites as often as possible to achieve the coveted “mayor” status, I would imagine that those local gurus would be interested in sharing their favorite local spots with adventurous tourists. Personally, I love when friends and family come to visit me in DC, because I enjoy showing off our unique city, from the Mall to the many unique, vibrant neighborhoods. It doesn’t take a significant change in behavior to take that tour-guide approach to your Mytinerary profile; after all, you want to become known as the local travel guru, right?

I think that to have the best chance for success, Mytinerary would have to be very tightly integrated with Facebook. After all,  you are trolling through your friends’ photos to decide where to visit, then posting your own photos after your trips, so why not embrace where all the eyeballs – and wallets – are? The close integration of Facebook would also allow for tagging, not only of the people in the pictures but also for the location and time of the picture itself. After you get back from your surfing trip in Costa Rica, you would be able to post your Mytinerary photos and share exactly where and when each picture was taken; going a step further, if your Facebook friends were inspired by your photos, they could drag and drop that particular tagged location into their Mytineraries.

All of these behaviors are currently happening in some corner of the internet, in books, or by word of mouth, but Mytinerary presents an infinitely more comprehensive way to manage the entire travel experience, from planning to sharing. As far as revenue streams are concerned, there is clearly a significant opportunity for targeted advertising and referral fees from travel booking sites, but it doesn’t end there. Normally, you might not appreciate getting spammed with Rosetta Stone advertisements ad nauseam if you have no interest in learning Spanish, but you might not mind a weekly email with common phrases and valuable vocab words if you did just book a two-week tour of Argentina. The data gathered from millions of Mytinerary users is valuable not only to the website/application itself, but also to the myriad companies involved in the travel industry that desire a more robust understanding of their potential customers.

I think this is a great idea with a log of legs, and a lot of wings (travel reference, get it?). Travel books and guides are so 20th century, it’s time to sign up for Mytinerary!

Celebrity Venture Capitalists: A-Round Investments from the A-List

2 Nov


Leonardo DiCaprio at Mobli’s office (Image via Mashable)

A hallmark of American culture has been the extent to which we have been able to squeeze every dollar of celebrity out of our star athletes, musicians and entertainers. From the eponymous Air Jordans to Joe Namath’s 1974 advertisement for hosiery and Britney Spears’ perfume, merchandise and endorsements have been a great way for stars to supplement their (and their agents’) incomes, and expand their marketing reach.

A more interesting phenomenon as of late has been the foray of celebrities into the world of Venture Capital. Leonardo DiCaprio and Ashton Kutcher are some of the biggest names to handover cash to promising startups, but other notable stars such as MC Hammer and even tween heartthrob Justin Bieber are reported to be scratching their entrepreneurial itch by way of VC investments. Can you imagine the Silicon Valley headlines? “It’s not a bubble, it’s Bieber Fever!”

Are Kutcher and DiCaprio really as adept at identifying emerging technologies and talented entrepreneurs as the veterans at Kleiner Perkins and Andreesson Horowitz? I doubt they can model cash flows or advise on go-to-market strategies as well as the true VC players can, but apparently the Ven”star” Capitalists are doing fairly well for themselves. Kutcher, through his investment partnership called A Grade, was an early investor in such hot startups as Foursquare, Path and Flipboard, and was even part of a group that bought Skype in 2009 before selling it to Microsoft in April for more than three times the purchase amount. Yesterday, social video and photo platform Mobli announced that Leonardo DiCaprio was one of a handful of investors that had participated in its latest round of funding – a $4 million seed round – and in April, MC Hammer announced he was joining as an investor/mentor in a tech incubator in Silicon Valley called NewMe.

Is this phenomenon a brilliant move on behalf of prescient celebrities with an eye for “companies that solve problems in intelligent and friction-free ways and break boundaries,” as Kutcher replied in a May interview? Or are startups realizing that celebrities can increase the brand awareness many times over, seemingly overnight, as in the case of Justin Bieber earning more than 1,700 followers within an hour of posting his first picture on Instagram?

Whichever the case, I appreciate the entrepreneurism exhibited by these celebrities. I never thought I would be giving props to anyone appearing on Perez Hilton, but I can’t help but applaud the Kim Kardashians and the Olsen twins of the world who appear to be testing out the waters of the business world by using their brains – okay, their checkbooks might be more accurate – to diversify their careers. My question is, how long will it be until there is a fund we can invest in that only manages portfolios of star-backed startups? Or what about a VC training camp for the rich and famous? Now that’s innovation!

Google 3D Driving Directions Makes Trip Planning More Fun

26 Oct

Bem-vindo à Ipanema!

Ever since the first Model T rolled off Henry Ford’s assembly line, we have been driving around this earth of ours town wondering, “Am I lost? Which way do I go? I could’ve sworn that right turn was coming up…” Travel maps sure did help, as did the local gas station attendant, but now there is a navigation tool available that – in addition to suggesting efficient routes and providing step-by-step directions – allows you to not only determine your course of attack, but also preview the drive in an engaging, movie-like experience.

A few weeks ago, Google released a revolutionary mapping service that takes driving directions into the 3rd dimension. With the Google Earth plug-in, you can get a bird’s eye perspective of your proposed route.  Google’s 3D driving directions leverage data and images from a variety of sources to build real-time videos tracking your proposed route. The video can be paused at any point, so you can stop and explore the local landscape or familiarize yourself with an area from different angles.

I personally discovered this feature, released on September 30, while planning a vacation to Brazil. I used the tool to discover interesting towns and beaches on the drive between Sao Paulo and Rio de Janeiro, and was amazed at the extent to which every detail – from downtown skyscrapers to offshore coral reefs – were highlighted along the way.

Will Google’s new 3D driving directions guarantee that you’ll never be lost again? Probably not, but it will definitely provide an entertaining, post-recession alternative to the family vacation. Can’t make it out to California for that epic cruise down the Pacific Coast Highway? Here, let me help:

BRIC’s and Beer

20 Oct

As Germany’s infamous Oktoberfest winds down to a close, I find it appropriate to reflect on one of my favorite subjects: beer. After water and tea, beer is the third most popular beverage in the world, and one of the oldest prepared beverages – evidence of beer brewing, accidental or not, pre-dates written history by millennia. I find it particularly interesting to think about the challenges modern brewers face in marketing and distributing beer in such a competitive market, especially in some of the world’s largest populations and economies: the BRICs.   

A recent Businessweek article profiled the push by Budweiser, Anheuser-Busch InBev’s flagship brand, into Brazil. Interestingly enough, Brazil is the birthplace of the majority of the parent company’s board, and is the world’s fourth largest beer market by volume.  The annual per capita consumption of beer in South America’s largest country was 47.6 liters, according to Japanese brewer and holding company Kirin; seeing as how per capita consumption for the top 20 most fervent beer drinking markets is at least 59.6 liters, Budweiser and its competitors must be licking their chops at the opportunity to convert more Brasileiros from drinking caipirinhas to drinking cervejas.

In Russia, unsurprisingly, beer takes second place to vodka as the most popular alcoholic drink, and many consumers view beer not as an alcoholic beverage, but rather as a soft drink. Still, Russians consume on average 58.9 liters per capita.  Presently, the market is dominated by domestic brewer Baltika(now owned by Carlsberg), while AB-InBev’s Budweiser controls just 0.5% of the market. Though thirsty Russians may prefer vodka to beer, they still consume enough to make it the world’s third largest beer market, according to Kirin.

The Indian beer market dates back to the early days of the British Empire, when porters and the appropriately named India Pale Ales were exported to the subcontinent. According to the Institute of Alcohol Studies, the number of Indians consuming alcohol has increased from 1 in 300 to 1 in 20; even though alcohol consumption has grown rapidly, as marketers increase their efforts, beer accounts for only 10% of all alcohol consumed. What is the most popular beer in India? Kingfisher – roughly 1 out of every 3 bottles of beer sold in India is this lager, brewed by Bangalore-based United Breweries Group.

China, the world’s largest country by population, is unsurprisingly one of the fastest growing markets for beer in the world. China is already the world’s largest beer market by volume, yet per capita consumption – 22.1 liters – doesn’t even warrant the country a place in Kirin’s ranking of 35 beer-drinking countries.  As Madison Avenue advertisers and their international brethren refine their offerings for the Chinese market, one can imagine that it will only be a matter of time before the Chinese catch up to Western beer drinkers. Will foreign breweries be able to successfully infiltrate the notoriously difficult to navigate economy of China?  Yes, but not organically; CR Snow, a joint venture between SABMiller and China Resources, brews Snow, which eclipsed the domestic beer Tsingtao as the market leader for the first time in 2006.

Tastes vary among cultures and country to country, but there is no denying the investments that the world’s largest breweries are making to court those in the largest developing countries. The American image abroad hasn’t exactly been spotless in recent years, but what about American brands? According to Chris Buggraeve, AB InBev’s Chief Marketing Officer, American values resonate globally, even if American politics don’t. “It [Budweiser] doesn’t stand for America. It stands for deep American values that are extremely relevant worldwide,” he says. Cheers to that.

B2C Contract Brewing – Custom Craft Beers

18 Jul

Back in March I wrote about contract brewing, both as a tool for start up breweries to minimize costs early on in their development, and also as a way for businesses to provide a more branded experience (as in the Darden Group designing unique beers for each of its restaurants). I hadn’t yet fully fleshed out the idea of a B2C model, but a recent experience at the Shenandoah Brewing Company – which recently announced they found an 11th hour buyer after the brew-on-premise/brewpub/microbrewery had been shopping around for buyers – makes me think that a B2c model that allows consumers to brew their own beer has the potential to scale successfully.

The premise of on-site B2C  brewing is fairly simple: customers choose what type of beer that they want to create, and the brewery provides the necessary instructions, ingredients and tools required as part of the brewing process. Because there is an emotional attachment to a product the customer created himself, the brewery can charge a premium for the product and services rendered.  Additionally, there has been a burgeoning interest in craft beers, which will only grow as consumers trade up from Keystone Light to beers with taste. The Shenandoah Brewing Company had the general idea right, but fell short in its execution in terms of customer experience and pricing. Perhaps the new management will find ways to create more value by addressing the weaknesses of the operations and expanding its marketing efforts.

SBC had been open for years, but I had never heard about it until this May. After the 0.1 seconds it took to decide I had to check out the place, I called to arrange an appointment for myself and fellow beer aficionados  Carl Fudge and Daniel Lombardi.Not only is the SBC in a bleak shopping center in a unattractive corner of Alexandria, VA, but the brewery is also kind of a dump. I recognize that small businesses must be scrappy with their limited resources, and the challenges of operating as both a commercial brewery and a retail-like B2C operation force SBC to make certain trade-offs regarding investments, but I did not think that SBC created a customer experience that was rich enough to draw customers in and encourage repeat visits.

SBC has 8 personal kettles that each have the capacity to brew batches of 90-110 beers (our three batches came out to 99, 107, and 111) After sampling a few SBC beers, we each selected a a type of beer to brew. I opted for a Copper Pale Ale with a crisp, hoppiness that would be refreshing in the DC summer heat, and the 101.

For the casual beer lover, participating in the behind-the-scenes brewing experience was enlightening and really cemented not only my love for craft beer, but also my interest in learning more about the brewing process (especially after reading the story of the Brooklyn Brewery, as told by co-founders Tom Potter and Steve Hindy). My Copper Pale Ale was decent, but not great; I definitely wouldn’t pay the per bottle average cost of $2.25 for it at a convenience store, but the experience of reaping what I sowed –drinking what I brewed, I should say – definitely commands a premium.

The brew-on-premise concept struck me as having real potential for a new way to consume beer. I could imagine finding a particular recipe, and tweaking it ever so slightly to the point where I have a custom beer that is truly unique to me, with a killer label design to boot. At that point, the value conferred by the brewery isn’t as much the brewing experience as it is a replenishment service. My hypothesis is that a brewery could meet the needs of a customer who is replenishing his stock of custom brews every 3 months or so at a lower cost than going after a one-time customer. SBC clearly did not share my opinion, and had not put thought into a CRM tool that tracks the tastes of its patrons.

I love the concept of brew-on-premise, and if I were a company designing the experience from scratch, there are a few things I would keep in mind:

  • Brewing is a time-consuming process, so your patrons will have to spend a significant amount of time at your facilities. This is a good thing. With that in mind, create an atmosphere that is attractive, fun, and has entertaining activities for the downtime during the brewing process – music, darts, sports, merchandise and food are all prerequisites in my book
  • Focus on customer service. Amateurs and seasoned home-brewers alike will provide significant revenue streams, so treat them well. Ensure that anyone brewing at your venue leaves well educated in regards to the brewing process, and would recommend your venue to his or her friends.
  • Transparency in pricing. Your patrons are more than willing to pay a premium for the experience of creating a  unique beverage, but they should be well aware of all costs involved in the process from the start.

All in all, I loved the experience of creating my own beer, and only wish I had better graphic design skills for my logo. I look forward to tracking the progress of the new management of SBC, as well as seeking out other brew-on-premise operations in the area.  These businesses won’t put the AB InBev’s of the world out of business, that’s for sure, but they do have the opportunity to provide a unique customer experience capitalizing on the trend of growing interest in microbreweries.

The Entrepreneurial Traveler – See For Yourself

1 Jun

Every single day, we’re bombarded with mind-blowing facts about the developing world, notably China and India. These superlative statements attest to the ridiculous growth of everything – economies, size of middle class, anything related to consumerism- and if you read between the lines, the message is loud and clear: if you want to make a lot of money, the next (hundred) billion dollars are in China and India.

Ok, I get the point; China and India are waking giants. They are grumpy after their naps and want some milk, dammit! But how am I, humble wannabe serial entrepreneur, supposed to design a business around the unmet needs of hundreds of millions of Chinese and Indian peoples if I have no clue what those latent needs are?

The answer: ENTREPRENEURIAL TOURISM. You know what the Great Wall and the Taj Mahal look like (great, long,old and white, symmetrical, tall, respectively), so why not cut to the chase and find out how you can ‘double down on ’04 Google stock’, if you will?

Tourism is a significant contributor to GDP in both China and India, but for the most part, tourism in those countries is like going to the zoo, where you get up and close with a different culture, but only so close, and in a very limited capacity. There are myriad reports describing in detail the intricacies of Chinese and Indian culture, and discussing what business models work best in those countries and who the ideal consumers are, but really the best way for anyone to experience and learn from these cultures is to visit there himself.

What industry are you interested in? Hospitality, food and beverage, retail, apparel? Depending on your interest and budget, I could imagine a 2-6 week immersive trip that is both a macro cultural and social overview, as well as a micro ethnographic study of consumer behavior. If this service were available to me now, I would select an option that provides a multilingual tour guide, visits half a dozen Chinese or Indian cities, explores the complete supply chain and all its components: offices, factories, and stores.

This service would appeal to corporations who would rather send a strategist out in the field rather than rely on the secondhand information from research firms, as well as universities, students and wealthy explorers looking for the next big proverbial mountain to climb.  I think there is ample demand for such a service, but the challenge would be finding suitable local hires who are well-traveled in their homelands, knowledgeable and diplomatic.