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Vintage Future VIII

42 years ago this past Friday, Martin Cooper of Motorola made the first ever cell phone call to Joel Engel of Bell Labs. Cooper was calling Engel to troll him about the fact that Motorola invented the thing first, although it was another 10 years before the company released the DynaTAC 8000X. So yeah…even the very first guy talking loudly on his cell was kind of a jerk about it.

That decade between trash talk and commercial introduction brought to mind our Vintage Future series in which we take a tongue-in-cheek look back at the failed predictions of past generations of investors and futurists, and the sometimes tortuous routes to success of unlikely ideas.

In our line of work it’s good to guard against the hubris inherent in projecting conventional wisdom too far out into the future, and to remind ourselves that today’s trend can be tomorrow’s punchline – and vice versa.

Back in 2010 in “Entrepreneurial silver lining in today’s economic clouds” we mentioned that the patents for the Television, Jukebox, and Nylon were all granted during The Great Depression, and although we can’t confirm any patent information on the chocolate chip cookie, it too was invented at the same time (1930 to be precise).  In this, our VIIIth installment of Vintage Future, we share some of the less successful ideas from the Great Depression.

 

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A Thread Across the Ocean

Cyrus W. Field may not have been the first entrepreneur in the modern mold, but he was without doubt one of the greatest.

So writes John Walker, about the laying of the world’s first trans-Atlantic telegraph cable.  He also has this to say about entrepreneurship in general:

There are inventions, and there are meta-inventions. Many things were invented in the 19th century which contributed to the wealth of the present-day developed world, but there were also concepts which emerged in that era of “anything is possible” ferment which cast even longer shadows. One of the most important is entrepreneurship—the ability of a visionary who sees beyond the horizon of the conventional wisdom to assemble the technical know-how, the financial capital, the managers and labourers to do the work, while keeping all of the balls in the air and fending off the horrific setbacks that any breakthrough technology will necessarily encounter as it matures.

When the first trans-Atlantic electronic message arrived – Queen Victoria telegraphed congratulations to President Buchanan – it was as if a new era had dawned, as if a new envisagement of the world were possible.  More than a century before the internet, Cyrus Field had taken the first steps towards wiring the world together.

The initial euphoria gave way to deferred dreams.  Stretched to the limit with un-perfected technology, the cable and the endeavor were soon both dead in the water and had to be rescued with follow-on rounds of financing and a new vocabulary of electrical engineering (Watt, Ohm, Ampere).  

This documentary tells of the setbacks and bouncebacks, both technical and commercial, from the earliest stages of Field’s start-up company through to the completion (13 years later) of his world-changing entrepreneurial success.

Field’s ability to coax ever more capital from investors in the face of so many failures (and accusations of fraud!) was remarkable, and likely made possible by (a) his confidence-inspiring optimism, “the eternal sunshine of the entrepreneur’s mind” and (b) the sterling reputation he had earned in his first business, during the turnaround of which he had “made good” on outstanding debts for which he had no legal obligation to pay.

The Top 10 (to us) highlights:

  1. The cable was a copper wire, covered with a foul-smelling tropical sap called Gutta Percha for insulation, with thick iron wires wound around it for protection.
  2. They found a flat area under the North Atlantic that was so perfect they termed it “The Telegraph Plateau.”
  3. The flip side of Field’s optimism: he badly underestimated the scope of the project and blew through the initial round just to get to Newfoundland.
  4. No single ship could carry the entire 2500-ton load.  Two ships met midway across the North Atlantic, spliced together the wire, then sailed very precisely and carefully in opposite directions.
  5. The first attempt failed utterly, the cable repeatedly broke.
  6. During the second attempt, the ship’s compass was affected by the amount of iron and created serious navigational errors.
  7. Pressed for time, because he was pressed for money, Fields forged ahead with insufficient testing of his chief scientist’s theories of the voltage required.  A month after the first successful message they burned through the insulation somewhere on the ocean floor.  Subsequently, the future Lord Kelvin invented the Mirror Galvanometer to amplify the weak signal at the end of the line.
  8. The scale of the debacle caused the first ever “Board of Inquiry” after a technical failure.  The board laid most of the blame on the chief scientist, but also faulted Field’s impulsiveness, calling him “a man obsessed by insanity.”  He drove the project forward and harnessed the people who needed to be involved, but was “a bit blinkered” and did not take in all the information available to him.
  9. For the third attempt a decade later, the largest ship in the world (The Great Eastern) was available for purchase at pennies on the dollar.  No longer would they have to worry about mid-ocean splicing.  In a cruel twist of fate, the circuit failed mid-project and miles of bad cable had to be spliced, mid-ocean!  The captain reversed course, dropped a grappling hook, snared the cable after multiple attempts, and winched it 3 miles (!) up to the surface for repair.
  10. Even today, most of the communication between North America and Europe is carried by trans-Atlantic cable.
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March Madness and the availability heurisitic

(Editor’s note:  This is a slightly modified re-print of a popular piece we published in April 2013.  Our readers enjoy the subject of how to improve their decision making skills, especially when sports can provide the context.)

Decision making and cognitive biases are common themes here at NVSE.  We’ve written about good board decisions, how the popularity of the Mona Lisa is based on circumstance rather than inherent artistic qualities, how the design of the decision-making process affects the decision, and how managers can undermine their decision making by over-relying on common sense, rationalizing instead of being rational, or making unconscious choices.

The availability heuristic refers to placing too much emphasis on data that is quick and easy to gather.  However in this particular instance – clutch performance during March Madness – it just might be more of a reliable bellwether than a problematic bias.

In Method to the Madness Peter Keating explains “why NBA GMs should go mad for the breakout stars of March.”

NBA teams scout hundreds of players across the country, tracking their every move for months on end, and put dozens of prospects through extensive workouts. Yet when it comes to draft night, clubs routinely rely on the same measure the rest of the country uses: NBA GMs, it turns out, favor players who had surprising success in the postseason. And the even bigger shocker? They’re right to do so.

Economists Casey Ichniowski of Columbia and Anne Preston of Haverford studied March Madness because they wanted to investigate whether employers often overweigh recent and vivid information when making decisions. Earlier research had shown that when we make judgments, we rely on data that’s accessible — the quickest and easiest stuff to gather — even when we know it’s important to be objective. Social scientists call this the “availability heuristic,” and it explains why Americans wrongly believe tornadoes kill more people than asthma: A spectacular catastrophe is easier to recall, so we overestimate its likelihood…

On average, a player who scores four points per game above expectations on a team that wins one more game than projected in the tournament will boost his draft position by 4.7 slots, according to Ichniowski and Preston. Now, here’s the thing: Players who get March Madness bumps deserve them. Ichniowski and Preston also examined what happened to players after their draft days… In every case, the group that got draft boosts from the NCAA tournament played better than those who didn’t. If anything, teams undervalue March Madness as a predictor of future success and stardom.

I usually repeat “sample size, sample size, sample size” about as often as and in the same tone that Jan Brady wailed “Marcia, Marcia, Marcia,” so I was shocked by these results. For most players, March Madness lasts only a game or two, yet it sends a signal powerful enough to last entire careers.

“I’m thinking of showing my sports class a clip of Michael Jordan beating the Cavaliers and asking if you could have ever predicted this, so that maybe you take MJ at No. 1 instead of No. 3,” Ichniowski says. “Then I’d like to show his NCAA shot [winning the national championship for North Carolina] and move to the question of how much to weight March Madness performance.” The answer: At least as much as NBA GMs do now. The NCAA tournament, with its pressure-packed contests featuring the best college players in the country in front of gigantic audiences, is truly a meaningful simulation of NBA conditions.

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From food cart to IPO in 10 years: innovation and “competitive capitalism”

In The only thing he ever made fly was government money, a post about the Wright Brothers’ government-backed competitor who failed badly, we wrote that:

The process of productive capital allocation is a critical ingredient of innovation and job growth. Entrepreneurs spending their own (and their partners’) money will create more jobs, more innovation, and a more vibrant economy than politicians picking winners and losers based on cronyism, campaign contributions, and constituent pork.

It is not an automatic process, of course. When $5,000 computers become $500 tablets, and conveniences ranging from steamships to Kodachrome to flip phones are supplanted by better ideas, the resulting surplus capital is not stuffed under plump mattresses – it’s used to fund the next round of businesses and innovations that enhance and enrich all our lives.  Including cheeseburgers.

shakeshack3Kevin D. Williamson points out that Shake Shack has gone from food cart to IPO over a period of time during which McDonald’s has struggled to tread water.  This might surprise some consumers but not likely anyone who’s worked for an archetypal big, faceless corporation (like McDonalds).  Start-ups may lack the economies of scale and R&D budgets of larger firms, but that’s the support venture capital can provide.  Those start-ups that do gain traction are able to raise capital, and, with hard work and a little luck, become large companies… who then face the next generation of start-ups.

Williamson goes on to make a broader defense of “competitive capitalism,” the aggregate effect of which is “indistinguishable from magic.”

(W)e are so used to its bounty that we never stop to notice that no king of old ever enjoyed quarters so comfortable as those found in a Holiday Inn Express, that Andrew Carnegie never had a car as good as a Honda Civic, that Akhenaten never enjoyed such wealth as is found in a Walmart Supercenter.

The irony is that capitalism has achieved through choice and cooperation what the old reds thought they were going to do with bayonets and gulags: It has recruited the most powerful and significant parts of the world’s capital structure into the service of ordinary people

For people who dislike and misunderstand capitalism (or free markets, or laissez-faire, or economic liberalism, or whatever you want to call it), the governing principle of market competition is the “Walmart effect.” According to this model of how the economy works — a model with very little basis in reality, but never mind that — big companies such as Walmart muscle into a market or a territory, use advantages of scale and predatory pricing (“predatory” here meaning “saving consumers money at the expense of relatively well-off business owners”) to drive out so-called mom-and-pop operations, lower workers’ wages, and then make like Scrooge McDuck doing his Greg Louganis impersonation into a mile-high stack of hundred-dollar bills.

Big businesses vs. small businesses, employers vs. employees, factory owners vs. consumers: Every relationship in the marketplace is in this view distorted by power imbalances that almost always work in favor of entrenched business interests that use their relative power to further heighten the advantages they enjoy.

The opposite of the “Walmart effect” understanding of how the economy operates, a view more prevalent among people who like or simply understand capitalism, is the “Bill Gates’s nightmare effect.” Back in 1998, when Microsoft was at the height of its power — it had just become the world’s most valuable company — and Gates was at the height of his prestige, he told Charlie Rose that what worried him wasn’t competition from IBM or Apple or Netscape: “I worry about someone in a garage inventing something that I haven’t thought of.” That was in March of 1998; in September, two guys in a garage in Menlo Park incorporated Google.

Or, as we put it in The dignity of innovation:
It seems paradoxical, but failure is what makes us rich. Well over half of the companies on the 2009 Fortune 500 list began during a recession or bear market. The patents for the Television, Jukebox, and Nylon were granted during The Great Depression. Also born at that time: the chocolate chip cookie, Scrabble and Fender Guitars (kinda). The decline of U.S. Steel was bad for the company’s shareholders and its employees, but it was good for people who use steel — meaning everybody else in the world. Without the pressure and opportunity created by the possibility of failure the entire U.S. economy would be (at best) stuck in the early 19th century.
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Untangling skill and luck in sports and business, redux

We’ve come across another good piece on decision-making and the limits of decision models.  

In The Great Analytics Rankings, ESPN “unleashed (its) experts and an army of researchers” to look across the four major sports and assess each of the 122 professional teams on how much of their approach is predicated on analytics.

They ranked teams both within each sport and across the entire field of 122, and then took a look at the sport with the most developed methodologies – baseball – to ask, “do clubs that prioritize analytics win more?

Their conclusion:  there’s just a slight correlation between more analytics and more success.  It remains tough to eliminate the usefulness of having more money than other clubs, and with technology and best practices so widely disseminated and articulated (in baseball, at least) the early Moneyball advantages may have been arbitraged away.

All this isn’t to say analytics are a nonfactor. Of course they’re important. For one thing, you have to keep up with the rest of the sport, even if the advantages to be gained are small. A lot of small advantages can add up. Look at the Astros’ signing of Collin McHugh, a nondescript pitcher waived by the pitching-poor Rockies. The Astros studied the PITCHF/x data on McHugh and saw a curveball with a good spin rate and took a chance on him. As Business Week reported:

The Astros’ analysts noticed that McHugh had a world-class curveball. Most curves spin at about 1,500 times per minute; McHugh’s spins 2,000 times. The more spin, the more the ball moves during the pitch — and the more likely batters are to miss it. Houston snapped him up. “We identified him as someone whose surface statistics might not indicate his true value,” says David Stearns, the team’s 29-year-old assistant general manager.

Highest Corsi For% since 2009-2010.  All the Stanley Cups since then as well.

Highest Corsi For% since 2009. All the Stanley Cups since then as well.

It gets a little more interesting with sports earlier in the process than baseball; e.g., the NHL, in the midst of its own “analytical awakening,” with concepts such as “Corsi” and “Fenwick” bringing together schools old and new.  Only one NHL team cracked the Top 10 of ESPN’s rankings:  the Chicago Blackhawks.

While Joel Quenneville is an old-school coach, the Blackhawks use analytics to find players who might be undervalued elsewhere but fit exactly what Quenneville and the Blackhawks try to do on the ice systematically. It’s been a great combination, with Bowman and Quenneville teaming up to win two Stanley Cups.

“I don’t claim to have the answers — we have a formula that works for us,” Bowman said. “We’re always trying to expand and add a new component each year that we do a little more with.”

When it comes to untangling skill and luck in sports and businessbig data may help make accurate predictions or guide knotty optimization choices or help avoid common biases, but it doesn’t control events and can be undone by cluster luck.  Models are useful in predicting things we cannot control, but for those in the midst of the game – players or entrepreneurs – the results have to be achieved, not just predicted.

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The Luck Factor

the-luck-factorIn a bit of randomness courtesy of the interwebs this week, we stumbled upon a 12-year old article (and book) by Richard Wiseman, psychologist at the University of Hertfordshire, in which he argues that being lucky is an easy skill to learn and is based on four principles:  (1) creating or spotting chance opportunities, (2) listening to intuition, (3) creating self-fulfilling prophesies by expecting to be lucky, and (4) adopting a resilient attitude to bad luck.

As luck would have it, we’ve touched upon each of those four ideas here in our ongoing discussion of the role played by luck in sports and business.

(1) In Is there a process to introduce chocolate to peanut butter? we discussed the difference between luck and serendipity and how the right environment or attitude can foster the latter:

The term serendipity was coined in the 18th-century by novelist Horace Walpole, inspired by the Persian fairy tale about three princes traveling through the land of Serendip.  They “were always making discoveries, by accidents and sagacity, of things they were not in quest of.”  What distinguished their “abilities” from simple luck was that they could see meaningful combinations where others did not.

(2) We once wrote that good old-fashioned intuition has its place but it’s unwise to rely only on one’s instincts to decide when to rely on one’s instincts.

As we argued in Thinking consciously, unconsciously, and semi-consciously:  the best results often come from a combination of deliberation and intuition.  Too much deliberation can become analysis paralysis; and studies show that those who rely on intuition alone tend to overestimate its effectiveness.  (They recall the times it served them well and forget the times it didn’t.

(3) In A new envisagement of the world we quoted Samuel Eliot Morison’s 1943 Pulitzer Prize biography of Columbus to illustrate how his expectations of good fortune were not only self-fulfilling but became contagious:

At the end of 1492 most men in Western Europe felt exceedingly gloomy about the future. Christian civilization appeared to be shrinking in area and dividing into hostile units as its sphere contracted. For over a century there had been no important advance in natural science and registration in the universities dwindled as the instruction they offered became increasingly jejune and lifeless. Institutions were decaying, well-meaning people were growing cynical or desperate, and many intelligent men, for want of something better to do, were endeavoring to escape the present through studying the pagan past. . . .

Yet, even as the chroniclers of Nuremberg were correcting their proofs from Koberger’s press, a Spanish caravel named Nina scudded before a winter gale into Lisbon with news of a discovery that was to give old Europe another chance. In a few years we find the mental picture completely changed. Strong monarchs are stamping out privy conspiracy and rebellion; the Church, purged and chastened by the Protestant Reformation, puts her house in order; new ideas flare up throughout Italy, France, Germany and the northern nations; faith in God revives and the human spirit is renewed. The change is complete and startling: “A new envisagement of the world has begun, and men are no longer sighing after the imaginary golden age that lay in the distant past, but speculating as to the golden age that might possibly lie in the oncoming future.”

(4) In Deadlines, decisions, and cluster luck we lamented that although our hometown club was bouncing back from some bad luck, they were running out of time:

This article in Grantland assessed the playoff chances of all 30 MLB teams.  Our Rays were playing well but digging out from the huge hole they’d surprisingly dug for themselves before the All-Star break.  The conclusion?  If the season lasted 262 games they’d have time for the bad “cluster luck” to turn around:

(T)he Rays can trace much of their heartache to cluster luck.  I’ve written about hit clustering a couple of times this year, but here’s a quick recap:  Over the course of a week, month, or even an entire season, certain teams’ hitters will bunch their hits together better than others, while certain teams’ pitchers will scatter their hits apart better than others. The Rays have been, by far, the least lucky team in baseball when it comes to hit clustering.  As of Friday’s FiveThirtyEight piece, the Rays had lost a staggering 54 runs simply through poor hit-clustering luck, a full 20 runs worse than the next-unluckiest team, the Astros.  As Peta noted on Twitter, the Rays have turned double plays on less than 5 percent of the baserunners they’ve allowed, an abnormally low number that’s also the worst in baseball.  Some of that is due to defensive slippage, as Ben Zobrist and especially Yunel Escobar are seeing their range start to tail off as they age.  But most of it is likely a giant fluke.

Cluster luck also very likely explains their torrid streak since that article was published.  One of the things baseball fans like to point out about their sport is that the length of the season tends to be a great leveler of performance.  In this case, there is just too little time for the reversion to mean to accomplish a miracle (for Ray’s fans, including some of us.)

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The NFL’s Best Coach*

bill-belichick-patriots-super-bowlTwo days before Super Bowl XLIX this article about Bill Belichick appeared in Grantland.  It starts with a terrific journey back in time to young 9-year Billy cutting a homework-for-game-reports deal with his father – a well-known college football scout – and then travels forward to how he first made his bones as a defensive coach and then grew into an offensive master by constantly learning from his fellow coaches.

The author sees Belichick “bombarding opponents with shrewd, coldly rational tactics” and thinks his greatness “has never stemmed from the Big Idea, unless the Big Idea is the relentless application of many Little Ideas.”

It’s hard to win in the NFL, where most games are decided by small, often overlooked moments.  The great coaches, however, are adept at finding and exploiting seemingly infinitesimal advantages.  There’s a reason Bill Walsh called his book Finding the Winning Edge [for more detail, see The imperfect perfectionist – ed] and Don Shula called his The Winning Edge:  Gaining an “edge” is often the difference between winning and losing.  One doesn’t steward his team to 12 consecutive 10-plus-win seasons, as Belichick has, without an uncanny ability to identify and exploit the on-field edges that add up to wins.

But what about edges off the field?  It’s impossible to write about Belichick this week without raising the question.  Like almost all of his peers, Belichick isn’t above a little gamesmanship if it might help him win:  According to Halberstam, in order to slow down Buffalo’s no-huddle offense in Super Bowl XXV, Belichick told his Giants players to “accidentally kick the ball” away from the officials after it had been set up for play.

Each of the Patriots’ six Super Bowls is a testament to just how small that winning edge can be, with margins of just +3 +3 +3 -3 -4 +4.  But for two unbelievable catches by Giants receivers we’d be talking about an unprecedented 6-0 dynasty that averaged a championship every other year.  But for an unbelievable goal-line INT by an undrafted rookie community college graduate, we’d be talking about two different Brady/Belichick eras:  the first resembling the Aikman-led Cowboys of the early 90s, the second resembling the can’t-win-the-Big-One Vikings of the mid 70s.

The Grantland article includes a bit of catnip for those of you who like the X’s and O’s:  a defensive play designed around which way the center slides after the snap.  Talk about your “callous detail freak” looking for any edge.

We suspect his efforts to gain those “edges off the field” will also be a permanent part of his legacy.  His team hasn’t been in 6 Super Bowls over 15 years because of deflated balls, or illicitly videotaped signals, or (pre-Belichick) a snowplow driven by a convict on work release.  But you earn the reputation and invite the asterisks when you proudly display that same snowplow in an exhibit at your stadium.

To paraphrase the old adage: reputations are built over the long-term, and can be forfeited in just a moment.  In our business failure can be counted on to make (at least) a cameo, so it’s critical to learn how to fail the right way and make a distinction between business failure and personal failure.  An entrepreneur (or coach?) can try too hard to avoid an enterprise failure and pressure himself into a career-damning ethical lapse.

BPV often backs the same entrepreneurs in more than one business, and we view honesty and consistency as critical to sustaining long term relationships for long term growth as opposed to trying to squeeze maximum value from a single transaction.  We also put a premium on transparency, as it’s easier to remember the importance of being honest when everyone involved in a business relationship can observe how decisions are being made.

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FVF’s “state of the industry” panel with Robert Faber

faber fvf

Robert Faber (L) discussing our state’s entrepreneurial ecosystem.

This past Friday BPV principal Robert Faber helped cap off the 24th annual Florida Venture Capital Conference as part of the “State of the Industry” panel discussion.

The panel covered several topics, including: new non-traditional sources of capital attracted to our state’s (and region’s) attractive business climate, start-up valuations, and how critical it is for an entrepreneur to do his or her homework on potential venture partners.

The Miami Herald reports that all of the panelists were “optimistic about opportunities in 2015″ and foresee “a strong year ahead.”  We look forward to seeing many of you next year at the Vinoy in St. Petersburg for the 2016 Florida Venture Forum conference.

 

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BPVIII exceeds target, closes at $164 million, makes first investment

Ballast Point Ventures announces the final closing of its third venture capital fund. Ballast Point Ventures III and affiliates closed with commitments of more than $164 million, exceeding its initial target of $140 million.

Founded in 2002, Ballast Point Ventures provides growth equity venture capital to rapidly growing private companies in the Southeast and Texas. BPV has partnered with over thirty companies in its first two funds within its target industries of health care, technology-enabled business services, communications and consumer. The new Fund’s investors include large institutional investors, family offices and over sixty successful entrepreneurs.

“The BPV team appreciates the strong support of both our previous investors who have partnered with us again and a select group of new partners who are joining us in BPV III,” said Partner Drew Graham. “We are excited to continue helping entrepreneurs build outstanding growth companies throughout Florida, the Southeast and Texas, and we are encouraged by the high level of entrepreneurial activity we continue to see in the region.”

Ballast Point Ventures has been the most active investor in Florida companies over the past ten years.* Ballast Point Ventures III recently made its first investment in PowerDMS, a technology-enabled business services company based in Orlando, Florida.  PowerDMS provides technology solutions utilizing a Software-as-a-Service model in the Governance and Risk Compliance and Enterprise Content Management sectors.

“We have been fortunate to partner with an impressive group of talented and driven entrepreneurs,” said Partner Paul Johan. “We cherish those relationships and look forward to partnering with more great entrepreneurs as we invest BPV III. Successful private growth companies not only create tremendous value and often reinvent industries, but they also provide the vast majority of new jobs in this country.”

 ~

 * Growth equity and venture capital investments of at least $2 million in private Florida companies, based on 2003-14 data from the Dow Jones VentureSource database.

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Moneyball moment for restaurants

Anthony Lye – President and CEO of portfolio company Red Book Connect – writes in Restaurant Hospitality magazine that widely available mobile and cloud technology have created a “Moneyball moment” for the restaurant industry.

The restaurant industry is having its Moneyball moment. Now that mobile and cloud technology are cheap and widely available, any restaurant can collect, analyze and act on huge swaths of data. Whether you have an Oakland A’s or New York Yankees budget, your restaurant has the ability to cut costs and increase profits by using big data that was invisible until recently.

When you collect in-store, near-store and above-store data, and then connect it all together in the cloud (i.e. on powerful computers located outside your restaurant), you see problems and opportunities that have gone unnoticed. You can begin to change conventional processes that have been killing your profit margins and losing you customers.

In-store data is all the information that comes from your restaurant. Your POS devices, fryers, refrigerators, temperature sensors and labor scheduling system can all communicate useful data. Combine them in the cloud, and you can detect patterns.

For example, one global restaurant brand learned that its fryers were a huge source of inefficiency. Five times per year, when they added new menu items, all 100,000 fryers had to be reconfigured and each required 30 minutes of labor. So, the company developed a way to push new instructions to fryers via the cloud. Now, an IT guy clicks one button, and all 100,000 fryers know how to cook the new menu item. It’s similar to the way Keanu Reeves learns Kung Fu in The Matrix.

matrixdojo6006ad

By comparison, near-store and above-store data is all the information that originates outside the restaurant and above the restaurants in the company hierarchies. Near-store data includes weather, Yelp reviews, sports calendars, school holidays, special events and any other external data that could affect revenue and therefore the inventory and labor.

Normally, a good manager keeps an eye on the near-store data and adjusts inventory and labor based on experience or gut feel. When you instead connect all this data in the cloud and compare it against sales, both real time and historical, you can build much more efficient labor and inventory models for your restaurant. Instead of guessing, your managers forecast inventory and labor needs with fewer errors, all on their smartphones.

Related stories:

 

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