Wednesday, January 26, 2011

Customer Economics

Had a pretty "utilitarian" chat with the boys today... I told about my visit to the optometrist yesterday. I am trying out some contact lenses and wasn't happy with the pair I had. Asked the optometrist if I could try a different brand. She suggested that I first tray a different cleaning solution with my existing contacts. I told her that she should give me both the new cleaning solution AND a new pair of contacts. Why? The contact sample don't cost much (if anything) yet her time (and mine) are pretty valuable. Why risk having to schedule a follow up visit in a few days? She agreed and gave them to me... My point to the boys: we sometimes save a little bit of money but then end up spending precious (more valuable) time as a result. Be it on ourselves or our customers.

This led us to a brief conversation about good customers vs. bad customers. The contact lens trial has a fixed cost and an unlimited number of visits and lenses that I can try to find the right ones. I'll probably end up costing money to the optometrist as I want to find the best possible lenses and I am willing to try different brands and types. Other customers probably give up after the first pair - or find some that are good enough for them. Those are great customers. Sometimes you need to factor this into the price because you can't afford the "bad" customers. Other times you are better off taking your losses with the bad customers as a trade off for more good customers. Sort of like an "all you can eat" buffet. Of course, you can try some middle ground, e.g., "one lobster per customer & no eating the sushi without the rice".

Thursday, January 20, 2011

Second Guessing Yourself

A couple of days after buying some airline tickets with miles I found myself re-checking how much it would have cost to purchase them outright, and second guessing my decision of using miles to buy them. I mentioned to the boys that it was important to establish some criteria for when it made sense to second guess yourself, and when it didn't. In my case I consider:

1) Can I do something about it if I change my mind? No point in revisiting a decision about which nothing can be done, e.g., should I have gone to see that movie yesterday? On the other hand, if there is still time to do something, then it might be worthwhile to think about it. For example, A concluded he shouldn't have bought an iPad. He was able to resell and thus undo most of the "damage".

2) How significant was the decision? A major decision, such as where to go to school or where to go to work might deserve additional "analysis". But we shouldn't rethink minor things such as whether we picked the best shaving cream at the store the day before.

3) Finally, I try to avoid things that stress me, while devoting time to those that I enjoy.

The day after this conversation N came to me and told me he was second guessing his decision to cancel his WOW subscription the previos week. His friends were very disappointed he was not playing with them anymore. That was an easy one: after a bit of analysis he decided to reactive it.

Tuesday, January 18, 2011

In an elevator with James Cameron

P can be pretty longwinded in his explanations - I know, I know, he is only 10... Still, this morning I played a "game" with them to help them practice being concise. I told them to imagine walking into an elevator and bumping into James Cameron (they all saw and loved Avatar). He might offer them a role in his next movie, but he has a test: during the elevator ride they must describe to him a movie. Any movie. The point is, can they skip superfluos details and get all the key points? I went first and did Iron Giant. P did Pirates of the Caribbean 3, A did i Robot and I forget the movie N did [note to self: fix this after I find out]. As expected, they struggled a bit. And N in particular was frustrated. I explained that being concise is something that even most adults can't do. It takes practice, as most other things. But it is an important and worthwhile skill to pursue.

How was that? Was this entry concise enough? Maybe I could have skipped the specific movies we each did :-)...

Wednesday, January 12, 2011

Moments of Leverage

A mentioned that he wished his school would add rock-climbing as PE elective. I told him that now was a good time to ask the school's administration for this because he had leverage. What leverage? He is in the process of deciding which high school to attend. His school is k-12 and encourages all students to stay there for high school. They know he is considering other high schools and will make an effort to retain him. I don't know if they will go as far as adding rock-climbing to the school's program, but now is certainly the best time to try.

I mentioned to the boys that when I am trying to hire people I sometimes get pretty extreme requests: "I am almost ready to accept this position but I have an issue. I booked a month long trip to Antartica next Winter". If this person was already working at my company and was full of responsibilities I might have a hard time agreeing to him taking a month off to go to Antartica. But when I am trying to hire him, he has a lot more leverage. If that is what it will take to get him, I'll probably accept. Besides, the person doesn't yet have responsibilities - and I can even rationalize that if I don't hire him, it might take me another month to hire someone else, so I wouldn't be any better off saying no.

It is similar to when you are negotiating to buy something: before you've paid (or agreed to pay) you might get a few extras from the seller (how about a set of mats for that new car?). After you paid? You are at the seller's mercy...

One final point: A hasn't yet heard back from the other high schools that he applied to. He might not get into any of them (other than his current one). But then he might. He shouldn't wait until he gets the answers because he risks losing his leverage if he doesn't get in. Moments of leverage can be ephemeral: take them when you have them!

Tuesday, January 11, 2011

Chinese Mothers

I recently read a fascinating article in the paper contrasting the stereotypical "Chinese mother" with the stereotypical "American mother". Wont rehash the piece here, but basically the Chinese mother forces her kids to do what she knows is best (Get straight As, practice 3 hours of violin per day, have no sleepovers, play no computer games, etc.), while the American mother gives her children more freedom and more fun.

I suggested to the kids that we try the "Chinese" approach for a month. N went ballistic. A just gave me a smile that meant "good luck trying". P thought it was a good idea. We had an interesting conversation about the trade-offs of extra effort and sacrifices today for benefits in the future. There is no question that practicing piano for 3 hours per day wouldn't be fun for them, or that studying a lot more to get straight As wouldn't either, but there is no denying that being a better piano player and having better grades would have benefits down the road.

But is the future more important than the present? Is going to a "better" college more important than having fun in high-school? The argument for focusing on the future is that it is, to a certain extent, "unlimited". At the very least longer than the present (for most people at least). But where do you draw the line? When do you transition from saving to spending? When does the son know better than the mother? To quote my favorite band:

You are young and life is long and there is time to kill today
And then one day you find that ten years have got behind you
No one told you when to run, you missed the starting gun

Thursday, January 6, 2011

BCC Etiquette and history

Nico saw me writing an email with someone in the BCC field. He asked me what BCC meant. Turned out none of the boys knew. They didn't know what the cc field was for either. I explained the CC field to them along with the origin of the term, at least what I think is the origin: "Carbon Copy" from the time when we used typewriters and carbon paper to make copies. I think the boys have a hard time relating to such ancient times and methods...

We then spoke about BCC. It is a somewhat delicate tool: blindly copying someone. I gave them examples of situations in which it was appropriate, such as BCC'ing someone from my own company in an external communication, or, maybe BCC'ing someone's boss/superior when you don't want them to feel like you are trying to make them look bad - but you do want their superior to be aware of the situation. I also mentioned to them the common BCC faux pais of replying to all when you are BCCed on an email. If someone BCCs you, they might not want the public recipients of the email to know about it. So don't reply to all unless you know it is OK. Just a few weeks ago someone did that to me. I found it frustrating and was incredulous that this person had been so careless.

Does Facebook have CC and BCC? If not, maybe all of this is irrelevant for my kids!

Tuesday, January 4, 2011

Be Careful with the Expectations that you Set

During our recent holiday we took a surfing course. The instructor agreed to pick us up the first day at 9am. Since we were in the Caribbean I assumed he would show up around 9:15am, but to my surprise he came at 9am sharp. The next day he came at 9am again. I figured it was his German origins and concluded he would be on time in the future. So when he hadn't showed up at 9:05am on the third day I got annoyed. He eventually arrived around 9:07am and was very apologetic for being so late. Truth is, seven minutes is nothing in the Caribbean - particularly for a surfing lesson! But by being on time the first two days Marcus had set up an expectation in us that he would be on time in the future? It reminded me of something that happened in the office a month ago: we have a new contractor to whom we agreed to pay Net-30, i.e., within 30 days of the end of the month. During the first week of the month one of my co-workers asked me to pay the contractor for the previous month. I said no. I said I didn't want to set the expectation in him we would pay him on the first week of the month. I suggested waiting until the 2nd or 3rd week of the month.

Sometimes it makes sense to "under-deliver" to set "appropriate" expectations and then be able to exceed them in the future.

Monday, January 3, 2011

Rip Currents

We took some surfing lessons during the holidays. The instructor explained to us what to do if we found ourselves in a rip current: don't fight it. Stay relaxed and swim sideways until there is no more current, then swim back to the beach. Last night our street reminded me of rip currents. It is a very steep street made out of bricks. When it rains some cars have a really hard time making it up. We hear their tires screeching as they try and try. They should pretend our street is a rip current and go up one of the parallel streets (which are not slippery because they are not made out of bricks). I discussed this with the boys and gave them a challenge: design a street sign that conveys the point that cars should go for a parallel street when ours is slippery. I also mentioned that many things in life are similar to rip currents. The key is to know when it is best to swim sideways for less current and when not to. We also talked about the fact that the current is not really what downs you, as it is simply moving you. People drown because they become exhausted from swimming against the current (until they can no longer thread water). Same as in many other things in life: it is often how we react to challenges that gets us in trouble, not the challenges themselves.