Among other things

As everyone should know by now, industries are networked and change spreads easily. Consider this; the single largest growth business in New York City this year was Dunkin' Donuts [ http://bit.ly/nychange ] followed by other chain stores. These are perishable retail establishments. During this same period New York has seen the closure of a significant number of retail stores along Madison Avenue and the complete disappearance of Fortunoffs, a cornerstone of the New York's retail history - [ http://bit.ly/fortunooffed ] . If, as the NYT article suggests, budget hotels replace garment industry production and storage houses it would have an impact on a broad spectrum of industries that consider NYC a center for business and its profile as a global culture magnet. This is not intended to be a doomsday premonition but an observation of simple fact - who will stay in these hotels and what is the future for a city with a creamy filling?

When large, long-term establishments are replaced by franchise purveyors of perishable goods, it is time to consider its future. This is not the first time the design industry in New York has been priced out of existence. I personally felt the impact of commercial rent defense in the late 80's and early 90's when large commercial spaces on Park Avenue (in my case our family's photography studio c. 1995) were priced out of their long-term leases. This coincided with the rise of the money-making-machine that has been the profile of New York in the past 20 years and suggests the cause and effect relationship of leasing policy in urban centers. In the case of the commercial photography industry high-prices came with a wave of other challenges that completely changed the business landscape for the worse. As the rents rose, so did chemical waste removal costs and a drive to invest in unproven and expensive technologies (like digital photography). The internal costs of the changing industry hurt many businesses and shuttered more but the real impact came from externalities due to the recession (...). The sharp consolidation of merchandise industries and the cost-cutting decisions by the survivors took business away from the commercial photography studios that served them.

Any of this sound familiar? It should because the very same issues are abound in a broad spectrum of design related industries - advertising and marketing, architecture, and retail industries such as garment production, product design, and luxury merchandise development. Of course, New York has not been a manufacturing center of the world for quite some time but it certainly has kept its deal-making aura and in the case of the garment industry it actually kept its manufacturing base. This base greatly helped the economy and the profile of New York as the aggressive dealmaking on Wall Street that was has long been its calling card complemented the edgy style-makers in midtown. The pairing established a clientele that consumed kobe steaks and bottles of Lafite to infalte the culinary profile of the city rose to new heights.

So I wonder therefore, if a significant consolidation of the garment district will impact the city in ways that we've yet to imagine. Could this be a sign of a sea-change or is this merely a sign of the times? What is New York? What will it be?

I think that they may be speaking to the wrong people. Let's strategize a bit more about this (after the jump)...

The footwork is great but you've got to remember that in any one store the highest on the corporate food chain that you're going to get is to a store manager... maybe an owner if you're lucky. These are some more reasons why I think the personal approach is a real challenge...

• Starbucks is NOT a franchise operation. This means that whomever you speak wth will almost certainly default to 'no'. The truth is they can't say yes even if they wanted to. "The Starbucks Experience" is central to their business model and they control it from a central group. BUT, they way might consider finding a voice with this group is to work smarter, not harder. The students are at Harvard and in that academic membership they may indeed find the bully pulpit they need. The students may may not get to Howard Shultz (CEO, Founder of Starbucks) but they might get to an executive who is affiliated with Harvard...
  
  • See this article about Shultz to get some insight into his MO... according to the article at least. http://www.myprimetime.com/work/ge/schultzbio/
    
  • Also check out the 'Ethos' water project. Personally I think it is pretty silly to try and protect the 'environment' by selling plastic bottled water... but that's just me, or is it? ;)


• Franchises are handcuffed... at best. Now Starbucks may be a white whale for a project of this scale to hook so participants have to be careful not to burn out on it. Places like cinnabon, au bon pain, and dunkin are a different kind of issue. These are franchises so the owners can run their own store but are often restricted in particular ways due to contract agreements. Sometimes these agreements make it hard for the own to make any money even though they do a ton of business. To convince these folks you've got to convince them that it will increase their margin. Remember that is why they pay franchise fees. MONEY. The same strategy may work as the above, again... you've got to do the research... bring something to the table if you want them to ante up.


• Smaller shop owners have a different problem in that they are constantly being threatened by the two big guys above. These are your most likely partners... and your least likely. They may really want to partner with you but they've got to think about the two gorillas above waiting to pummel their cute little shop into submission. Remember that even HU Catering uses 'Official Starbucks Coffee'.


• MOST importantly, you've got to keep in mind that asking ANY of these folks to make a commitment to the project means changing their process model. The first thing they think is... "NO WAY. This is going to screw up my inventory and make it harder for my already stressed employees to get anything done... and I might lose money!" Remember that they still have to buy the same amount of cups and they do so in bulk either monthly or annually via contract agreements. Harvard Catering may be compelled to change and engage your project because it is in their best interests and they probably have to work with a tighter budget... but they have a shelter for that (the U.). To change the minds of these other folks you may have to move upstream into their B2B network. The wholesalers and distributors... for a project of this scale you can really forget having that kind of an impact. Its not worth your (or their) while. Bottom line... If you are going to get the coffee shops to do this, you've got to prove to them that it will bring them more business... or find that special owner who really cares that much... even they may hedge unless you can prove the shift.

In order to get anything done today you MUST use the social networks you are connected to! THIS is what they are there for, and they are no longer isolated to the simplistic affiliations of the Ivy League or Fortune 500 set. A real network incorporates the ethics and values of its constituents. These kinds of systems harbor a complexity that belies simple conjecture. No social network can function on any one, individual node. Therefore the goal of infiltrating a social network with an idea can only be met through careful identification of the wide spectrum of value systems it embodies.

I hope this information is helpful to the project. I don't have much time at all these days to work on these things but I really appreciate their work and the perspective they are trying to give the GSD. This is the kind of project that makes me think that there is hope yet... I hope.

My 15 minutes worth of brain inventory...

1. The most interesting thing happening that I see is companies and individuals alike leveraging information in fascinating ways. I think that this is fundamentally possible because both companies and individuals can leverage the use of databases, the web, and dynamic - interactive content to create interfaces that can quickly aggregate huge amounts of raw data, and that massive amounts of people can access almost simultaneously. Combine this with ever-faster and cheaper equipment (a la 'moore's law') that can be linked via networks and you've got a never ending source of raw data that is always getting delivered in different ways, at faster speeds, and in higher resolutions. The results of which I see in some well documented phenomena (freakonomics, flat-world, long tail theory, etc.).

Some examples of this ...

a. "crowd sourcing" - using the contributions of MANY (100's, 1000's, +++) to develop or inform responses to specific, complex, or ill-defined problems. This is not demographic modeling nor a method for survey development. The key here is using the unique perspectives, interests, and applications that individuals have to better inform a designers decisions and to do so in a way that maintains the rich individuality that people bring. Fundamental to this idea, of course, are the widespread forums, bulletin boards, email lists, and websites that attract people from around the world almost constantly. This, in effect, provides many people with 24/7 'experts' for feedback and ideas. Something I find fascinating about this is that communities of professionals or even "affinity associates" can almost always find one another.
i. some good examples for crowdsourcing are sites that support coding applications such as macscripters.com codeproject.org actionscript.org ... there are MANY of these sites. I think that this works well with programming applications because the 'code' can easily be cut-and-pasted into a web-form. A few minutes in the forums on any site like this can show how easily people can find answers to vexing problems AND how many solutions there actually are to a single problem.
ii. large companies use similar tactics & strategies to develop their products. Again, this has occurred most often in 'developer communities' such as Apple's Developer Network and MSDN (Microsoft) where the company can actually 'seed' the community with buggy or incomplete products and elicit responses from people who are both experts AND zealots. More applicably, companies like Lego have actually leveraged the global community of users to re-shape their products and redirect their marketing efforts. Patricia Seybold's book "Outside Innovation" has a decent case study on how Lego and Texas Instruments were able to work together to create a new product for their market and a new market respectively.

b. The prior point brings to mind the value of 'hacking cultures' that have developed around a variety of interesting product lines and industries. Different from 'innovation', hacking is done by a single user or small group who found "an itch that they couldn't scratch" in dealing with a given product, tool, or system. The key here is that the 'hack' is often so particular that it only suits a VERY small group of people or a VERY specific goal. Often amateurs, hackers are experts but often in a non-traditional way or from a non-traditional background. These kinds of people have developed knowledge through intimate use and thus have a unique understanding of a product. In the past 10 years companies have begun to find the value of these types Again, techies have been doing this for years and are probably the most robust group, but the idea hacking has also been critical to a broad range of industries including:
i. agriculture
- wine making in soil selection, splicing, and x-pollination
- crop selection
ii. car & motorcycle design
- the origin of the term "chopper" comes from the culture of motorcycle enthusiasts who 'chopped' their bikes down to the bare essentials, making them original and faster. This resulted in an uncomfortable ride but also gave the bike a sense of personality that can be attributed to the rider. Think hell's angels and the so called 1%'ers.
- in car design this has, of course, been going on for a long time with the low-riders, buggys, jalopies, hot-rods, and even in the way that demolition derby enthusiasts modify the car's shell to strengthen the car and protect the driver.
- more recently, this kind of hacking or modding (a derivative kind of hacking) has hit the mainstream in the form of mass and moderate customization by companies such as:
... Mattel in association with FAO Schwartz (custom hot wheels)
... Cooper USA's Mini which allows slight modifications pre-sale
... BMW with so-called "open-source" design... I think that this might go better in the next point.
... can't remember the name but I know that there is a company that let's you choose from a wide variety of parts and paint jobs to make your own car.

c. Open Source Design & Development has also become a significant part of the common cultural lingo and, mainly in software development, has proven its worth in the design of interesting, useful, and well-functioning tools. Open-source design takes a very particular kind of leadership to be successful in that the problems that come with I.P. seem to often get in the way of the goal. I think that this is in direct conflict with our current understanding of product and business valuation where intellectual property is often more valued than physical property. IBM still makes a lot of money on what it calls defensive patents, and of course, the wealth of actual patents that it has. Companies are always wary of letting people in though and the licensing models are messy. That said, I think that some interesting approaches coming from start-ups. Bottom line, open source is an interesting idea but it is very difficult to leverage effectively without getting tangled in a licensing net.

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Some less (half?) baked thoughts....


2. A second direction that I find to be critical is an investment in thinking about the 'design process' which has elicited some very valuable methods for designers and a kind of standardization (or stabilization) of terms like user-centered design, 'wizard of oz' prototyping, persona development, narrative and use-case scenarios. These may seem like old hat but I think that it is becoming a much more acceptable rationale. I also think that the broader acceptance of these methods can be attributed, in part, to the wide range of "profiling" data that is available through the web and through data wholesalers.


3. Support industries... With so much activity now relying on data and 'uptime' (the time that your computer is not broken) a wide range of support industries have sprouted. These include call centers, tech support consultants, data warehouses, data wholesalers, and of course, web hosting operations. Many of these companies are service oriented