If you look at a given industry, say the restaurant business, you look around, you see expensive restaurants in nice locations, and you see low cost restaurants in convenient locations and you can pretty much assess how much a nice restaurant charges for a steak (maybe $35) and you can see how much a pizza costs at a neighborhood pizza place (maybe $12).  If you want to start a business, drawing up a business plan comparing how others in your industry charge is a pretty commonsense way to go about it. From there you figure out your costs, a nicer place will be more expensive, but you will be charging more.

But then come the big disruptions in industry where all bets are off in terms of defining a business operating model when someone comes up with a radically different approach.

Pizza by the slice was a hugely disruptive idea at the time, scoffed at by many people who couldn’t fathom why a person might buy one slice.  But obviously it was a great idea.

Then came fast food and take out.  The notion of being in a hurry and being able to eat on the go were introduced as possibilities in the restaurant business that really shook up some fundamental assumptions about what customers wanted and what they were willing to buy.

Buying an individual song from an album was also a hugely disruptive idea, and Napster tested the boundaries of intellectual property and how to make money in that industry.

Still in music, the band Radiohead  posted an album on the internet for people to download and pay whatever they thought it was worth.  A huge risk that paid off handsomely for them.

Alice.com sells packaged goods over the internet at cost with free shipping and makes their money through advertising in a unique model.  Costco is the only other business I can think of that doesn’t make any money from the goods they sell to their customers (their profits come from membership dues).

And now, Conde Nast takes a turn at it.  Conde Nast owns popular magazines like Vogue and Vanity Fair and they are ready to turn their industry on its ear as described in this article by Jeremy W. Peters.   In short, the model for the glossy magazine business has been to get lots of ad pages and then charge the customer as little as $12 a year for a subscription, and have a pretty high newsstand price for people like me who buy them at the airport.  It has gotten harder and harder to get ad page revenue, making the basic model riskier and riskier.  Ad revenue is declining because more people are getting their content online, so the solution Conde Nast is going to,which is pretty radical, is to charge customers a lot more and give them access to both print and online content for their fee.  Charging for online content is largely going against the trend in the world of content.  They seem confident that the customer will buy into this more expensive model with CEO Charles H. Townsend pointing out

“They pay $180 a month for a cable bill.”

Hmm.  Comparing cable to Vanity Fair doesn’t really work for me.

TV for most people is a viewed as a necessity, Vanity Fair is not.  For many people, the fee they pay is because there is only one cable operator at their location, so they have no choice but to pay this rate, and in addition to it being a necessity, a lot of people watch TV every single day – people don’t read Vanity Fair every day.  So comparing Vanity Fair to cable TV is a non starter.  Does that mean that I think they will be able to charge more than $12  a year for a subscription?  Probably.  And one place they might take a page out of the cable company play book is to charge a monthly fee.  $180 a month for cable is over two thousand dollars a year, but you don’t see that number in any of their marketing literature even though most operators require a minimum one year contract.  Do I think it’s smart for Conde Nast to get away from dependence on advertisers, sure.  Do I think they should do more experimentation with the direction of content and how people want to pay for it and who they compare themselves to?  Yep.

The bottom line is that we are seeing basic assumptions in industries being tested because of the way people are consuming information and entertainment these days.  Publishing is currently one of the most up-in-the-air industries and it’s still the wild wild west when it comes to figuring out business models.  The key is staying in touch with what your customer values and what they are willing to pay for it = and keeping a very open mind about where you may need to do some rethinking.

As Warren Buffet said “price is what you pay, value is what you get.”

-Ric

I still use the phrase often, for the simple reason that it is very frequently the case that where a company makes its money isn’t where we would expect.  The fact that McDonald’s is the largest landlord in the world (they buy the entire block their restaurants go on so they control who is next to them) is one of the simpler examples that I cover in the book Rethink.  Alice.com is another company I talk about a lot because they (like Costco, but in a very different way) don’t intend to make any money selling the goods that they sell – they make money by taking the age, gender, and ZIP code data of their customers and make that part of the transaction with the people who buy ads and give coupons on that site.

My friend Mike reminded me of another example that most of us have encountered – rental car company insurance and gas.  I will admit, the first time someone asked me if I wanted insurance and if I wanted to pre-pay the gas, I felt really dumb and figured that if they asked, most people probably did it, so I went ahead and paid for them.  As I get older and grayer, I now realize that in a lot of cases the rental car companies are simply preying on the fact that their customers don’t know if their own insurance covers them (or their company insurance if it’s a work trip) and correctly assume that we won’t want to risk it and pay the extra $15/day or whatever it is.  The gas up-sell is a slightly different trick (and I do mean trick), where they are making you wonder if you are going to be running late and won’t have time to stop for gas on the way back to the airport, or if you really know how much driving you will be doing on your visit (for a lot of cars, a full tank of gas is over 300 miles worth – I haven’t driven 300 miles in two years of rental cars).

Somewhat similar to this is the cartoonishly expensive items inside the hotel rooms (movies, local phone calls, internet, mini bar).  Especially when I am staying in a nice hotel, I am really offended that they want to gouge me when I am in my own roof.

But all of these cases make you wonder if all of these nickel and dime charges are really gravy on top of an already profitable business, or if the rental car or the hotel room are really where they cover their costs and they make their real money on what we think of as incidentals.

I don’t think there are simple universal truths to these questions, but I do think their are some basic guiding principles that organizations can follow.

1) If your brand is about being a bargain, then customers shouldn’t be surprised to have to pay extra for incidentals, especially if there is clear incremental cost for the product or service in question.

2) If your brand is luxury, people have already agreed to a price that’s very high, if there are actual costs in the incidentals, just bake that into the room rate or the car rate.  If I am at The Ritz paying $400/night on business travel, I really feel like I am being taken advantage of when I am asked to pay $15 a night for internet access when I know there’s no incremental cost to the hotel for that service.

So is Thrifty car rental an insurance company that uses rental cars as the way to get business, or is it really a rental car that happens to also sell insurance for its cars?  Great question, but an even better question to ask yourself if you are really clear about your brand promise and what your customers want from you.

-Ric

Reputationdefender

MyIDPal

Abine

Foursquare

. . .even Zillow

Not familiar with these companies?  You should be, because they are plotting the course for the future of internet privacy and how we interact with people and merchants.

Bynamite is just the latest and there is a very good article about them here.  In short, Bynamite has (correctly, in my opinion) seen that each time we conduct a search on the internet, the search itself is a transaction because it gives merchants and the search engines more information about our interests, tastes, and needs.  Bynamite also thinks that this sort of profile information will in short order play a very real role in the prices we pay for goods and the kinds of coupons we get.  I think they are right about that as well – and this by itself is one of the most fundamental changes in the world of commerce to come along in a very long time – a set of one, or many, micro transactions prior to the primary transaction(s) that then inform the price we pay for future transactions – in essence context-rich transactions.

This is already a reality in grocery stores, but that’s fairly two dimensional compared to what we are going to see in the future.  By that I mean that the grocery store knows about the food decisions of our household (and gives us GREAT discounts based on that) while merchants want to know everything about what we buy so that they have a sense of whether to flat out ignore us or whether to woo us, or something in between.

In the context of Zillow, the web site that aims to keep track of the value of every house, allows the owner of the house to correct information about the home, such as updating the number of bedrooms after a remodel, which has a direct impact on the value of the house.  Only the current owner of the house can make these changes, but it’s a very similar concept to Bynamite in the sense the people get to update information about “themselves” with Zillow being limited to our houses.

But there’s a big problem.

While on the one hand, we see people putting themselves out in public like never before, from blogs to YouTube, even Facebook, that is a side of “us” that has given us privacy. I will concede that it’s much more true of the younger generation than the older generations, with some crossover on both sides,  but the notion of “We Live In Public” depicted in Ondi Timoners film seems to be getter more true than ever.

But how do we balance this intense growth in the desire to be out there in public to have the 15 minutes of fame, not just once, but every single day as Josh Harris says in Timoner’s film, with this seemingly equally strong drive to be as private as possible?

Enter the modern day Madonna-Whore complex, which in the simplest terms is the case of the man who wants to be sleeping with the most sexual woman possible (whore), but publicly wants to be the woman who is so pure that you wouldn’t think if her in sexual terms (Lady Madonna, not the singer . . .).

That seems to be where we are with privacy today.

On the one hand we want to have total control over our privacy, but at the same time we want to be as public as possible.  While these notions seem to be in conflict, I think this is at the heart of who is going to be successful in this arena.  I think the way it will work is that we will have a “public” persona that will reflect whatever level of privacy we decide to have with the outside world and our friends, but on a transactional basis, that will be the “private” person that we keep to ourselves and whether that links to the book we buy on amazon or something more private, the “private” persona will not have our actual name attached to it, but instead will be an ID or a user name (much like a PayPal concept for our ID – which is what the highly secretive MyIDPal seems to be all about).

I expect this to be a moving target for some time, and the public/private line will be drawn very differently for different age groups in different cultures, but that’s where this is all going.  Despite their 2 million users, I still think foursquare has drawn the line in the wrong place, but time will tell.

-Ric

Testing credit card security starts before you think. And it can be done manually, without even a phone.  And this has always been true because of the use of the Luhn Formula

If you are like me, you hadn’t ever heard of the Luhn Formula, named after Hans Peter Luhn, who according to this article played a tangential role in the creation of the world wide web.

It turns out that just looking at the number of the credit card alone you can tell if it’s an actual credit card number.  Back in the days where there were those sliding mechanisms that used carbon paper (some taxis still use them) there was no good way to test if a card was active, but they did have a way to check if it was a valid number, and that test is still in use today.

It turns out that by going through four simple steps that end with some simple addition, if the number you arrive at ends in anything other than zero, it’s not a real credit card.  Here’s the test.

What a clever and simple way to check if a number is valid that requires no technology whatsoever.  A great “how” to check a number for validity.

As for the reference in the title to kanban,  I can’t help but think that in this day and age it’s time to add another simple level of security that would eliminate credit card fraud.

Kanban is a term that’s used a lot in business, but it’s literal translation from Japanese is “show card” and how it’s used is that the card is a signal that means it’s OK to proceed with the next step, and the work can’t start until the signal is given.  I learned this recently when I read the book Kanban, by David J. Anderson and I really enjoyed it – and I recommend it.

My rethinking on the credit card is that most people carry cell phones around with them, it would be so easy for the credit card company to shoot out a text message at the point the credit card transaction is taking place to ask you if you are making a purchase at Blue C Sushi (or whatever the place is called where you are shopping), and if you say “Yes” the transaction proceeds, and if you say “No” it stops (so the “Yes” is the kanban signal).  You would probably want to set up some preferences and threshold amounts, but that would be easy.  Even better, if the credit card company sent a second message, asking what per cent gratuity to apply, you could send that number back and there would be no need to even sign anything since you have validated and authenticated everything right then and there.  Don’t you think it’s time for something like that?

-Ric

Groupon was like that.  I heard about them the week before they closed a $150 million venture round.  You have to have accomplished a lot to land that kind of money in 2010.  I may have also been the last person to learn about Skype.

The latest is one I learned about called Techmeme, and there was a good article about them in the paper today (here).  Evidently, Techmeme is where a most people in Silicon Valley go to get their news.  It’s a news aggregation site so that we don’t have to all keep track of all of the various news sites that we like to go to, which is often more than 20 sites per day for some people.  As Claire Cain Miller points out in the article, the reason Techmeme is so popular is because they have done some rethinking in terms of how to get the best content that saves them the work of “crawling” all over the web to aggregate the best content.  Specifically she points out:

“Unlike RSS feeds, which gather everything on preselected sites or blogs, Techmeme groups stories according to importance, and clusters other reporters’ and bloggers’ perspectives on the same topic.”

The trick with all of this is that while some percentage of the content will be interesting to most readers, every reader is different and we are going to start to see more companies with smarter aggregation engines so that we get to a “MyTechmeme” notion for content that’s not so different from the way I track stocks on my “My Yahoo!”page. As organizations get smarter about collecting data about what we like and don’t like (Netflix remains the best at that – and then using that information to be much smarter about making recommendations).  It’s already starting to happen with location based services – now that FourSquare has two million users it’s hard to ignore, while I still think they have the wrong model, that space is really ripe right now.

Content aggregation will continue to be hard, but it’s exciting to see a company like Techmeme really approach the space from a different angle to get very different results.  As Miller’s article also points out, while some people worry that great journalism is going away because people want shorter snippets of news, the real art now is the orchestration and management of the content to the delight of their readers, whether they are brushing up for a meeting or a cocktail party.

-Ric

But that’s not what this post is about.

This post is about some thing that you can barely read on the cover and I can barely read when it is blown up to close to actual size (over on the right).  The person in the picture is evidently one of the actors in the new hit movie Twilight: Eclipse, and in this photo he’s wearing Calvin Klein Jeans.

Well this cover was the subject of this article by Joseph Plambeck talking about the fact that it’s unusual to give credit to clothing manufacturers on the cover of a magazine like that.  The clothing credit is usually mentioned on the inside, and Men’s Health has apparently been doing this for some time even though they say they don’t get anything back from the clothing manufacturer for this.  As the editor in chief of Men’s Health put it, it’s “an innovation” – a service to readers.

No it’s not.

The fact that Plambeck put the word innovation in quotes makes me think he feels the same way I do.

I think Roberta Garfinkle from TargetCast TCM (quoted in Plambeck’s piece) feels the same way – she said:

“They’re pushing the envelope here,” she said. “Are they tearing it? I don’t think so.”

This is a minor change, it’s not an innovation.  Whether you agree with my definition of innovation (which I will get to shortly), this is a very minor change, especially given how tiny the print is.  It seems like it’s every day I hear people throw the word innovation around and what they are talking about isn’t much more than a mild change, and there’s a good reason the word change is different from the word innovation.  The basic dictionary definition of innovate is “to introduce as or as if new.”  This is taking a piece of information and putting it in a different place.  There’s nothing new there.  The “what” they were doing was giving the credit (and “whats” tend to be pretty durable and not change a lot), “how” they did it changed a little bit in terms of the location of the giving of the credit.

Innovation to me means that a “how” you do something is so different that it doesn’t resemble “how” you did it before.  Some examples:

1) Get cash.  The ATM was an innovative way for us to get cash initially, but especially when they showed up in places that weren’t even banks

2) Watch movie.  Stores like Blockbuster were innovative ways for us to get movies by renting them, and then along came Redbox (like the ATM put the video rental in another store location at an incredibly low price), and Netflix which allowed people to rent movies using the internet and mail (and now streaming video).  Netflix also innovated in the areas of payment in the sense that people simply pay a flat monthly fee.

3) Buy goods.  Alice.com is a company I talk about a lot because they sell consumer packaged goods over the internet at cost with free shipping.  Their innovation is sharing age, gender, and ZIP code data with their advertisers (about who responds to ads and coupons) and that’s where they get all of their profits.

4) Send message.  Obviously e-mail was a very different way of sending a message.  No postage, but you still need an address (the e-mail address).  Facebook and LinkedIn have both created a situation where you don’t even need that – as long as you know the name of the person you can send them a message even if you don’t know their e-mail address, which is really powerful.

So those are some of my examples.

Having the conversation in an organization about where innovation is needed, or where it’s the necessary response to a particular problem or opportunity is something that needs to go on, but if you have a flimsy definition of innovation, the results you get may also be pretty flimsy.  So please define innovation before you start to use the word, and when you do, make sure you really are doing something new and also define it in the context of how you define other levels of change (minor change, medium change, major change, and innovation make up a good spectrum for describing the level of change). Once you have a spectrum like that, then you can get into more concrete cost/benefit discussions about what’s best for the organization.

Rethinking work is a lot easier and more successful if you have clear definitions like that.

I really couldn’t care less about the magazine or the credit (or the movie), but when I read about it in the paper, it turned out to be a decent example of an innovation that isn’t an innovation, so I decided to blow the whistle on them.

-Ric

Maybe.

But this particular commentary is about something they are doing wrong, or at least not doing as well as they could and part of this stems from how much their brand has evolved over the years.  When Netflix started out, they set out to keep you on the couch.  The only way you could get videos from Netflix was in the mail.  They didn’t want you to go to the theater.  But as they evolved, they started collecting feedback about movies we have seen irrespective of whether we saw them through Netflix and that then fed their recommendation engine so they would be better about letting us know how likely we would be to enjoy a film (which as users know is uncanny how good it is at using our feedback to predict what we will like).  So now that we can review any film we have seen anywhere, we can now stream videos directly from their site (amazing experience on an iPad, by the way), and we can reserve movies that aren’t yet available, their brand has really evolved.  The Netflix brand now extends to any film experience we have in large part because we can rate those films which leads to an even richer relationship with them.

So a quick recap – what is Netflix good at:

1) Having an incredible catalog of films

1) Listening to, and capturing what we want to see

2) Capturing our feedback and digesting it so they can recommend (or discourage) future viewings

3) Matchmaking between viewers and films

4) They also happen to have one of the best user experiences on their site.  Very click-efficient (alice.com should take note)

Last year I was on a panel with Deborah Person who runs the largest film festival in North America, the Seattle International Film Festival (better known as SIFF), and the discussion turned to alliances and I commented that Netflix would be a great partner for SIFF.  Initially Deborah’s reaction was that Netflix is competition for SIFF, but I pointed out that was the Netflix of old where they didn’t want us to leave our couch.  Things have changed.  That, by the way, is the lesson for all of us – companies do change and someone who was competition yesterday, may now be your best ally.

The films at SIFF are new films that are looking to get picked up by distributors, so Netflix hasn’t heard of any of these films yet but if they could get entered into the Netflix system, Netflix would be able to start recommending specific films for specific SIFF viewers.   That match-making between viewers and films is one of the toughest things that film festivals have to go through, by the way.  That’s already a big win-win for Netflix and SIFF, but now if the viewers actually go in and rate the films they have seen, Netflix now has visibility into that information and even if some of these films never get picked up, Netflix may want to add them to their catalog and add an even more detailed dimension to their catalog, especially with the increase in use of streaming video which I was recently told is already 55% of their viewership.

The other piece of this that may be more useful for SIFF than Netflix (but I could be wrong on this) is if they do a diligent job of capturing this information – without compromising any personal information, they can share the data of who liked, and didn’t like the films, by age, gender and ZIP code (which is how alice.com makes their money).  That would add a whole new dimension to movie marketing – if it’s already known which demographics like the film, there’s much lower risk to the distributors about where a movie will be a hit.

So that’s the kind of rethinking Netflix needs to do, not just with SIFF, but every movie festival.  It’s very much in line with their brand evolution and the film festivals and the distributors get a get boost as well.

-Ric

When it comes to testing and surveying for things, the use of animals is not new.  Dolphins can be trained to look for mines, pigs are used to sniff out truffles, and we regularly see dogs at airports sniffing our luggage for drugs.  I have been tempted to put some other smell on my luggage (like bacon) to get a reaction from the dog, but I don’t need that kind of attention, and then I am stuck with luggage that smells like bacon.

But a much more interesting king of testing has been devised.  I read this article in the paper today about the use of bees at a German airport to test air quality levels.  It’s really simple, they simply collect the honey from the bees and test it for toxins like certain hydrocarbons and heavy metals.  As we read about bees disappearing from our farmlands, this seems like a creative way to re-introduce them into some areas and not only re-grow the bee population, but also learn a lot about air quality.

Not only is that really smart and easy and cheap, it makes me think that there have to be lots of other creatures that we can use to “listen” to water and air quality.  It’s well known that some creatures are immune to various toxins, while others absorb them.  The use of honey from bees is great because you don’t have to kill anything and it’s highly repeatable.  My bet is that you could find several species of fish and birds that capture toxins and whether you collect feathers or droppings or whatever, I bet we could learn a lot more about the health and wellness of our environments, first as a snapshot, but then even more valuable would be the trend data so when you see a spike or just a shift, you know when it happened which makes diagnosing the cause a lot easier.

Great rethinking.  And I love that it’s so low tech.  I try to keep a repository of low tech examples of rethinking, and while I will add this to the group, my favorite is still why Morton Salt uses their trademark phrase “when it rains it pours” – the answer is magnesium carbonate, but the more interesting part is what problem it solved.  Any guesses?

-Ric

What a great brand.

Fashion, sports, science, politics, sports, business, arts, travel, the arts, etc, it’s all in there and extremely high quality reporting every day.  Incredible photography as well.  They made the shift to online as elegantly as any of the major paper publishers and I believe that they will survive the growing trend of people  not reading newspapers any more as shorter digital content becomes more prevalent.  Do I think my son will ever have a paper delivered to his house?  No.  And I think the expression “it was in the paper Wednesday” will fade because we don’t think of news as the daily chunk that a newspaper is, we get our information from many sources throughout the course of the day.

That’s just the way things are going.

But they have figured out a way to hedge their bets with The New York Times Store.  I have been aware of the store for a number of years (as far as I know it’s only an online store – I see the ads printed in the paper that is delivered to my house every day).  I have seen countless ads for the store with the timeless image of Y.A. Tittle, helmet-less after a crushing loss as a New York (football) Giant.  It sells for about $200 signed by Tittle.  The tittle photo is one of many in a standard ad that has run for the store for years.  That has always struck me as a simple but logical extension of the brand of the paper to sell copies of the photos it prints.  Probably not a gigantic business, but worth the effort.

Yawn.

But things have taken a turn for the far more interesting.  Now the store is selling things that have nothing to do with content – things that were never printed in the paper.  They have extended it to all things New York in a brand-consistent high quality way.  Now you can buy everything from “game used” ball cuff links made from balls actually used in New York Yankee games.  You can also buy an actual brick from the old Yankee stadium that was recently torn down, and I would trust the authenticity of these things entirely because of my trust of the brand.

And to top it all off, they included off-the-charts great customer service which is consistent with how the customer service at the paper has performed.

I actually got one of the bricks from Yankee stadium for my Dad for Father’s day this year (he grew up going to that park) and the order was delayed.  How did I know that?  They called to tell me.  I had also ordered something else, and they sent me the wrong thing, and they called me to apologize even before it arrived.  After I spoke to an improbably responsive “Ryan” twice in about five minutes, the items were overnighted to me (at their expense) well in time for father’s day.  When I asked about the logistics of returning the items they sent to me in error, they simply said “we will worry about that later.”

I haven’t had service like that in years.  It was one of those rare customer service experiences that was so great, I told several people about it.

This makes so much sense to me, that The New York Times rethinks their brand in a direction that has no dependency on how many papers they sell.  My prediction is that we have only begun to see what this store is going to offer – it’s not going to happen in a New York minute, but in the coming months and years this store will be a very common place for us to shop for presents and gifts.

-Ric

P.S.  I am not a big believer in events like Father’s day, and I know my Dad doesn’t care about it at all, but he sure thought that brick was cool.

As it stands, the 3GTV service that’s set to launch later in the year is a huge breakthrough because it’s really the first time consumers are TV-pitched at the very moment they are deciding which product to buy, the so-called “moment of truth” and the bottom of the sales funnel. So stores and manufacturers and advertisers will get real time data about the impact, which will probably be at least worth the trouble for the advertisers.  So that in and of itself is a big deal and that’s why Stuart Elliott wrote Showing TV, and Commercials, on the Shelves and in the Aisles in The New York Times today.

But I think this is a much bigger deal than that because I think 3GTV is going to end up being the gateway to some much cooler stuff, tapping into the great rethinking that alice.com has done, but also making social networking sites like Foursquare much more interesting as a business.  Currently Foursquare makes me want to utter something that’s more likely to come out of the mouth of Rahm Emanuel (and then offend Sarah Palin) because it really doesn’t let you do anything useful.

As Alice.com has figured out, most manufacturers don’t care to learn our names.  Just knowing our age, gender, and ZIP code is what they want to know so that they can get more targeted in their marketing and product R&D.  People using sites like Foursquare allow you to “check in” to a location and not that much else, but if you can now marry that information in real time with the 3GTV, then next step in the techno-evolutionary chain is that Kraft is going to know that (if it’s me) a 44 year-old male from the 98144 ZIP code just entered the store and they will know in my case that I don’t ever buy macaroni & cheese so I am not a very good target, but the next person to check in happens to buy it a lot, then Kraft (or the store) may want to flash a coupon on the screen that that consumer can “pick up” with an app on their iPhone (I could pick it up to if I saw it, but I would ignore it), or the coupon can be sent to their mobile phone (still all anonymous – PayPal figured that out).  Then at checkout all of that gets reconciled (that isn’t elegant today, but I am sure someone is already hard at work writing that software).

Personalized, location-based advertising and coupon-ing is coming soon, and every shop from Safeway to Shultzy’s Sausage stand will benefit.  Helping the big guys is interesting, but to be able to scale down to the mom and pop shops is where this starts to become gigantic.  For the big guys, it allows them to more actively manage their inventory.  If they know the ad or the coupon is going to lift sales of a given product, they know when to stock more of it.  Even bigger, when inventory is time-sensitive, Shultzy’s may have pre-cooked 2o hot dogs for lunch, and as the lunch hour winds down, they still have nine left, they can push out coupons for the last ones to people walking by (that gets beyond Foursquare’s store idea, but it should also be easy to check in to a neighborhood).  At the point if the alternative to not selling them is throwing them away due to spoilage, then Shultzy’s might send coupons for a free hot dog knowing that they will at least probably sell a soft drink and get some money.  The same spoilage issue works really well for grocery stores when produce and meats are getting to the end of their shelf life. Really powerful.

Now things are really cooking with connecting marketers with consumers once we get this rolling.  My guess is that Groupon, the ridiculously (their word, kind of) successful coupon company that just closed a $135 million round of financing will be in the mix.   Add them to the list of “I wish I had thought of that!”  Placebook and PointInside will also probably be in there.

Great innovation that will lead to even bigger ones.

-Ric