business news in context, analysis with attitude

Published on: April 4, 2014

by Kevin Coupe

On Tuesday, MNB took note of how Mozilla's new president, Brendan Eich, was under fire because in 2008 he donated $1,000 to a campaign supporting a legal ban on gay marriage. We wrote that Eich had gone out of his way to separate his personal views from those of his employer, and has pledged to maintaining a supportive and inclusive workplace. But this has not stopped some employees from publicly complaining about his views via social media, and the company has lost three members of its board of directors (though it downplays the connection to Eich's views).

And, the New York Times reported that "OKCupid, an online dating site, made it difficult for people using Mozilla Firefox to access its service, stating unequivocally that this decision was a result of Mr. Eich being an 'opponent of equal rights for gay couples'."

Well, it took less than a week for this all to shake out. The Wall Street Journal reports this morning that Eich has stepped down from his job.

"I have decided to resign as CEO effective today, and leave Mozilla," he wrote. "Our mission is bigger than any one of us, and under the present circumstances, I cannot be an effective leader."

Mozilla's executive chairwoman, Mitchell Baker, wrote in a blog posting, "We have employees with a wide diversity of views. Our culture of openness extends to encouraging staff and community to share their beliefs and opinions in public. … But this time we failed to listen, to engage, and to be guided by our community."

Now, let me be clear (especially to new MNB readers who may not be aware of my views). I profoundly disagree with Eich's position of six years ago.

But I think it is important to point out that while the company's chairman says that his employees "have a diversity of views," there apparently is one view that is not tolerated.

In 2006, gay marriage was not legal in California, so he was not advocating any sort of violation of the law. He was expressing an opinion, as was his legal right. I could even argue that it was a moral and ethical imperative to express that opinion, even if I disagree with him and find the opinion to be intolerant.

The question I keep asking myself is, if I were an employee at Mozilla, could I work for Eich?

And the answer I keep coming to is yes - if he seemed to be a good leader with a strong vision, if he seemed to be inclusive and fair, and if he were committed to equality for gay employees (which he pledged to do, by the way).

Would I feel that way if I were gay? I don't know. Maybe not.

On the other hand, I might feel like the political, social and cultural tides are with gay marriage, and that there is some comfort to be found in that. And, as long as Eich were a good CEO, I could work with him.

But I'm not gay. So I can't really answer the question.

(Most of the people I've worked for in my life were people with whom I disagreed on a whole host of issues. It was fine. On the other hand, maybe there's a reason I've been doing my own thing for most of the past 20 years…)

I know there will be readers with strong opinions on both sides of this issue. And even as I write this, I'm trying to figure out whether my feelings are inconsistent with what I was writing back during the Chick-fil-A contretemps.

What I said then was that while company executives have a right to express their political/cultural opinions, they needed to understand that there could be collateral damage … that, for example, they risked alienating existing and potential customers who might decide never to eat at Chick-fil-A again.

Maybe that's what happened with Eich and Mozilla. Maybe the sense was that his political/cultural opinions would harm the brand in irreparable ways.

I'm not sure where the line is anymore. If I didn't have a job in which I'm essentially paid to state my opinions, I'd hate to think that I'd have to avoid expressing opinions if I wanted to keep my job.

I am troubled by the idea that a person's past opinions about an issue not related to business could derail his or her career, and by the speed with which it happened. There was so much momentum, it is hard to imagine that there was any sort of reasoned, rational discussion.

But maybe the real lesson is about how fast all this happened, and how transparent Eich's opinions were and are. That's something every business leader has to keep in mind … even if it means that they will have to restrain themselves from engaging in public discourse out of fear for their careers.

I also know this. I've expressed so many opinions here over the years that there is no way anyone would ever hire me. Not that I'm looking for a job, but it certainly highlights the fact that I'd better keep doing this until I get it right.

Published on: April 4, 2014

The New York Times this morning has a story about a joint survey conducted and released by Walmart's Sam's Club division and Gallup, analyzing "microbusinesses" that have five or fewer workers. As it happens, these microbusinesses represent 70 percent of of Sam's Club's small business customers.

According to the story, "The survey results released Thursday highlighted the rise in microbusinesses owned by women, which represent more than 45 percent of the newer businesses in this sector. Of these tiny businesses that are at least 20 years old, only about 28 percent are owned by women.

"Another main poll finding was that more than half of microbusiness owners relied on a second job as their main source of income during their first year in business. The longer the business was open, the lower was the percentage who relied mainly on outside income — declining from 54 percent during the first year of business, to 44 percent during the first two to five years in business, to 19 percent for businesses open at least 20 years.

"Nonetheless, nearly one-third of microbusiness owners over all said they depended more on a second job."

The dependence on another job was, the survey suggests, where the line was drawn when it comes to priorities and concerns: "Those whose businesses were a primary source of income were more concerned about taxes, regulations and finding qualified employees. But those who relied primarily on another job were more concerned about having effective marketing, the survey said, because when revenues are too small to support even the owner, maintaining cash flow is likely to be the most immediate concern."

Published on: April 4, 2014

The US House of Representatives voted 248-179 yesterday in favor of legislation that "would rewrite the health care law to redefine a full-time job as 40 hours per week, reversing the 30 hours per week definition prescribed by the Affordable Care Act out of concern the current rules give employers an incentive to slash workers’ hours."

The MarketWatch story notes that the bill "would change the threshold for full-time work from 30 hours to 40 hours, which would exempt more businesses from the provisions of the Affordable Care Act’s employer mandate.  That mandate requires that employers with 50 or more full-time workers provide health insurance or pay fines, but Congressional Republicans fear it gives companies an incentive to trim weekly hours to 29 or fewer to avoid penalties."

Democrats, on the other hand, suggest that the issue has been overstated and say that businesses will not retool their approach to labor in order to keep more workers under 29 hours per week and thus avoid penalties.

While the passage of the bill by the GOP-controlled House was lauded by associations such as the Food Marketing Institute (FMI), National Grocers Association (NGA) and the US Chamber of Commerce, it is generally believed that there is no way that the Democratic-controlled US Senate will pass the bill. And, even if it did, President Barack Obama has said that he would veto the legislation … which means that the House vote was largely procedural and posturing, since there is no way it will become law.

Published on: April 4, 2014

Internet Retailer has a story saying that Amazon is offering incentives to start-up online retailers to use its payment systems, telling them that if they enable "Login & Pay with Amazon" technology on their sites, they can have free payment processing up to $10,000 in one year.

Adopting the system means that shoppers on an enabled site could simply sign in with their Amazon user names and passwords and pay via Amazon; there currently are 215 million people with Amazon accounts.

Internet Retailer writes that "Amazon typically charges 2.9% plus $0.30 per transaction, for purchases of $10 or more, with volume discounts starting at $3,000 in transactions per month; for purchases of less than $10, it charges 5.0% + $0.05 per transaction."

Published on: April 4, 2014

The Los Angeles Times reports that Instacart, the personal shopping service, is launching operations in the Los Angeles market, serving the West Hollywood, Hollywood, Fairfax, Beverly Grove, Sawtelle, West L.A., Mid-Wilshire, Santa Monica, Venice and Marina del Rey neighborhoods.

The story notes that Instacart utilizes a "crowdsourced model of personal shoppers who provide their own transportation and smartphones to shop for and deliver groceries to customers." In LA, "customers can order groceries and other items from Whole Foods Market and have them delivered in as little as an hour. Additional stores will be added in the coming weeks; shoppers will be able to combine items from multiple stores into one order."

Among Instacart's other markets are San Francisco, Boston, Chicago, New York City, Philadelphia and Washington, DC. In those markets, it also provides shopping services at stores that include Costco, Safeway and BJ's Wholesale Club. The Times writes that "the vast majority of Instacart customers select two-hour delivery, which costs $3.99. One-hour delivery is available for $14.99. The minimum order is $10. Instacart also offers an Amazon Prime-like service called Instacart Express, a $99 annual membership that eliminates delivery fees for all orders of $35 or more."

Published on: April 4, 2014

MediaPost reports on a new study from the Pew Research Internet Center saying that "not only is there a gap between young and old in terms of Internet know-how, there is a division among older folks who get it and older folks who don't get it.:"

Basically, it works out like one would expect - that richer, better educated, healthier and not-quite-as-old people embrace the Internet and all it offers, while older old people with less money, less education, more health problems tend to be more disconnected.

The story goes on to say that "since 2012, more than half of older adults are Internet users. Today, 59% go online, a substantial six-percentage point jump in one year. Nearly half have a high speed connection, and 77% have cell phones, all per Pew. And 71% go online every day.

"But on the flip side, 41% don’t use the Internet at all. And 35% of older non-Internet users disagree with the statement that they are missing out on something important and 18% within that group 'strongly disagree'."

Published on: April 4, 2014

• The Los Angeles Times has a story about how there are a bunch of Los Angeles residents who are really "cheesed off" at Trader Joe's - because it has never opened a store in downtown Los Angeles.

According to the story, "Promoters of downtown such as the Central City Assn. have been pleading with Trader Joe’s for years to no avail and the spurned supplicants’ patience finally ran out, at least for one day. Trader Joe’s got the club’s 2014 lemon -- which would be a raspberry if it made a sound.

"The Monrovia chain known for its low-cost gourmet items does not publicly discuss its expansion plans, but the long wait for a downtown L.A. branch may be nearing an end. Real estate brokers who asked not to be identified to avoid irking Trader Joe’s said the grocery chain has dropped its long-standing resistance to downtown L.A. and is in discussions to find a suitable site there."


• The Seattle Times reports that Brookstone, the quirky gift store, which has been seeing sharp sales declines because of both the tough economy and online competition, is taking two steps to remain in business. As part of a $147 million sale of the company to Spencer Spirit Holdings, the company also is seeking Chapter 11 bankruptcy protection.

Brookstone's 240 stores will remain open through the process, the story says.


• The Des Moines Register reports that Casey's General Stores "plans to build a $30 million distribution center in Terre Haute, Ind., giving the Ankeny-based convenience store chain the ability to continue to grow … Casey’s now operates 1,783 convenience stores in 14 states, including 80 stores in Indiana. Its stores extend as far southeast as Kentucky and Tennessee."

Published on: April 4, 2014

Yesterday, in "FaceTime," I talked about how people who have signed up to be notified when their Amazon packages are being delivered are actually being told when their packages are being handed over to the US Postal Service.

That's right. It appears that Amazon is turning packages over to shipping companies like FedEx and UPS, which are then dropping those packages the the post office, where, after all, they have people driving postal routes every day.

MNB user Steven Ritchey wrote:

UPS or FedEx passing packages off to the USPS isn’t new, it’s been happening for some time.  I don’t order from Amazon as often as you do, so when I do purchase something from them or through them, I check to see if it’s been shipped and what the estimated delivery date is, and frequently, I see that it’s been delivered to my local post office, who then delivers to my home.  I’ve never had a problem with anything being lost or delivered late.

From another reader:

I'm not overly familiar with this but knowing people who are at Amazon in their supply chain, I don’t believe that Amazon that is contracting with USPS (Sunday delivery excluded), it is FedEx and UPS that have those deals especially in less populated location.

UPS has long used USPS in this fashion for more than just Amazon.

MNB reader Jim Wojewodzki wrote:

This is not a recent development and has been going on for some time - perhaps a year or more, especially with FedEx.  They call it FedEx Smart Post and UPS has a similar name for it, I believe.   I am not an Amazon Prime member, and I assume that Prime members didn't get this service because it adds a day or two to shipping.  I am annoyed by this service, not because the Post Office is incapable of delivering packages, but their tracking system leaves a lot to be desired.  With FedEx or UPS,  I can track the package every time it's touched, right up until it's delivered - in this case to the local post office . Then it seems to be a crap shoot when I'll get it.  Sometimes it goes out with the next delivery, sometimes it sits a day or two before I get the package.  I live in a small town, about 4 miles or so from our post office.  The last time I had a package shipped FedEx Smart Post, it was delivered in town one day, but not delivered to me for another 2 days.  I guess these packages may not be a priority for the USPS, or maybe the individual carrier has to decide what fits in the car that day and what can wait until tomorrow.  The last on-line purchase I made (not from Amazon) came from FedEx right to the house.  I ordered on-line Sunday morning, it shipped on Monday (the store is closed Sunday's), and was promised Tuesday by 8 PM.  I received it around noon on Tuesday.  And yes, it was free shipping.  Had I ordered it from Amazon (same price) and chose free shipping, it likely would not have arrived until the following week.

I always wondered if this was intentional, to get me to buy into the Prime club, or just a matter of economics.  I have yet to take the bait, but I can say that if I were to join, Amazon would get more of my business just to justify the expense.  Sorry, Jeff, but keep trying!

MNB user Katherine Poythress wrote:

I’m one of the people who has been a bit surprised by the UPS/USPS shipping partnership, but not when it comes to my Amazon packages. I ordered an item from a completely different company, paid for two-day shipping and it didn’t arrive until 10 days later… because it had been dropped off at the USPS distribution center here in San Diego, where it appeared to lounge for several days.

Why it took so long to get from there to me is a mystery, but I can attest that this certainly didn’t seem to be an efficient way to get my product from the warehouse to my door.

So it’s not just Amazon doing the circuitous shipping – maybe worth a closer look.

MNB reader Jeremy Survance wrote:

My experience certainly wasn’t as bad as a DMV+dentist combo, but not typical of the usual flawless execution on Amazon’s part.

On a recent weekend, I ordered a handful of random items with my Prime account: water filters for the fridge, solder and soldering iron, dog bowls…like I said, random.  When Tuesday evening rolled around and some of these items weren’t with the rest of the group, I checked my account.  Sure enough, the ones that hadn’t arrived had been “delivered” according to Amazon—but really to the USPS. 

When two more days passed and the missing items still weren’t delivered, the Customer Service rep who I called refunded this part of my order without any prompting.  He even offered to reorder the items for me with one-day shipping at no additional charge.  I asked the rep if this could be a result of the USPS relationship or if this sort of arrangement was coming up a lot who didn’t (and probably couldn’t) give me a direct answer.

In the end, I declined the rep’s offer to immediately reorder the items, as I actually realized during the call that none of those missing items were needed immediately.  And, when I decided I probably should have some water filters handy for the next time they expire, I only ordered one instead of the two I originally bought.   Net, they lost 60% of the original order in sales.

Personally, this new arrangement has me rethinking the value Amazon provides if continued.  If this a “patchwork” solution as you suggest, it’s already threadbare, IMHO.

MNB reader Tom Murphy wrote:

I actually came out of the transportation/delivery industry (FedEx and Sea-Land/Maersk) when I joined a large national retailer in 1993.  I can tell you that the biggest challenge for these companies has never been about moving goods over long distances, e.g., hub-to-hub in FedEx’s case or terminal-to-terminal in Sea-Land/Maersk’s case.  It has always been about the last mile.  Now, I am not a big fan of the USPS, using it only when whatever I am sending doesn’t matter (J).  However, one could argue that their problems have been primarily the inverse of the others, the USPS can’t get it right over the long-hauls.  I would also suggest that they have the best consumer local-delivery density model, which is where the last mile is won.  Who knows, maybe the right model is to let the USPS handle the last mile, build SLAs (service level agreements) that hold them accountable and leverage their route model?  This could help everyone, e.g., FedEx, Amazon and the USPS!

Published on: April 4, 2014

I was fascinated this week by all the mail I got when I made a brief Robin Sparkles reference - almost all of them expressing tremendous dissatisfaction with this week's "How I Met Your Mother" finale.

No question that people felt strongly about it. As well they should - after all, this is a program in which a lot of people invested an enormous amount of time. (More than 200 hours over the course of the series run.)

Now, I was never a big "HIMYM" watcher. I'd never turn it on, but if my kids were watching it (and they loved it) and I happened to be nearby, I'd sit down and catch an episode. I probably watched more if this this season than ever before, mostly because I was intrigued by the narrative conceit of having the entire season focus on one weekend.

(Note: SPOILERS AHEAD!)

Maybe because I was not as dedicated a viewer, I wasn't as offended by the finale as many people were. I did think it was sort of a cheat, and I felt bad that the death of The Mother was almost an afterthought … it was what they call deus ex machina, a contrived and arbitrary device used to get characters to where the writers wanted them. On the other hand, I loved moments throughout the finale; the idea that friends, as they get older, tend to drift away seemed very real, and I adored the moment Barney (Neil Patrick Harris) declared his love for the woman of his dreams.

Finales are hard. I hated "The Sopranos" finale for the first five minutes after it was over, but then loved it. There are still people carping about the finale of "The Fugitive," and "Seinfeld," though I think most people would say that the finales of "M*A*S*H," "Mary Tyler Moore" and especially "Cheers" were terrific. This never used to be a problem - there never was a finale for "I Love Lucy" or "The Dick an Dyke Show." Maybe television has become too self-referential. On the other hand, television is better than ever … so maybe the finale fixation is warranted.

I will say this. From the episodes I've seen of "HIMYM," I think the writing was generally first-rate, and the performances excellent. Most of all, I think they did a great job of defining the importance of friendships and the magic of both new and enduring love - within, of course, the context of a sitcom.

That's hard to do over more than 200 episodes, which can be equated to about 50 movies.

I admire the work ethic, and I admire the effort. And if they want a do-over, they can have one … if/when "How I Met Your Dad" makes it onto the airwaves.




That's it for this week. Have a great weekend, and I'll see you Monday.

Slàinte!