15 great business discoveries that changed entrepreneurship forever
Miscellaneous / / April 16, 2021
1. Distance selling couriers and platforms
Distance selling is associated with online shopping, but this “technology” has always existed in retail. Numerous water carriers, organ grinders, knife grinders, chimney sweeps and peddlers delivered products and services right to the consumer's door.
"Crying trade" - with a lively, cheery cry that eats into the ears from morning until dusk - from time immemorial has been a separate retail format with its own unique scripts and SEO.
Now, at the beginning of the third millennium, the user's server is jammed with cookies of all kinds of flavors. no more than the windows and doors of a 19th century user were filled with push notifications from the lottery men of all suits.
Until the 1960s, in the center of Leningrad one could see milkmaids - women of a rural type, wearing a scarf, a white apron, with a large can and scoop for milk - who walked around the courtyards.
From the book “Jamevue. How to build an organization that is not afraid of any virus ”.
And this practice of trade has become the prototype of courier delivery. Many of the shops were run by "errand boys" who delivered their heavy shopping baskets to customers. Today, all this has been replaced by various online services.
More interesting stories about businessmen of the past can be found in the book “Jamevue. How to build an organization that is not afraid of any virus ”. Its author Dmitry Kostygin is an entrepreneur and private investor who started with translation and publication books, and then engaged in a variety of products: from ketchup and tires to hypermarkets and online retail. Based on vivid business examples from the past, he described his own theory of entrepreneurship, which, in his opinion, will help create a stable and successful business for companies of various sizes and areas of work - from startups to large holdings.
“Jamevue. How to build an organization that is not afraid of any virus ”is published in the format of a book series: one chapter every week. The first episode is already available on Bookmate.
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2. Trade by catalogs
In the early 1870s, Aaron Montgomery, a traveling trader from the United States, pondered how to sell stale goods. No salespeople or sales solved the problem. Then he began mailing a paper list of goods with prices to customers by mail.
The addressees liked the innovation, and the previously unclaimed goods were quickly dismantled. Already in 1872, Aaron founded the Montgomery Ward Company and published a 2-kilogram catalog with a circulation of two million copies. This gave rise to a successful business - Montgomery became one of the largest retailers in the United States.
It wasn't until the early 1990s that the company ditched paper and went online. But she could not stand the competition with Target and Walmart, and in 1997 she filed for bankruptcy. But Montgomery's business model continues to live on now: any online store is essentially the same catalog that Aaron once invented.
3. Auction
This business model has a history of several millennia. At the auction, the goods go to the one who offers the highest price or is the first to pay the amount that the seller expects. This allows the entrepreneur to get maximum money for his product.
Today, auction houses are focused mainly on connoisseurs of masterpieces of art, antiques and jewelry. But on sites like eBay, they organize auctions for much more democratic things: sneakers, smartphones, books, and so on.
The recent trend is the auctions of NFT-tokens. These are unique digital twins of various objects. For example, Twitter creator Jack Dorsey sold first tweet for $ 2.9 million. And the smart Android robot Sofia received 688.8 thousand dollars for an NFT-token tied to his drawing.
4. Destruction of illiquid assets
What could not be sold and will definitely not bring profit is cheaper to throw away than to store. This method was practiced by the great jeweler Carl Faberge - he destroyed all items that did not find a buyer for a certain period. The Faberge approach is also used by modern luxury brands. For example, Burberry regularly burns out-of-season clothing, which infuriates eco-activists.
Some brands send leftover collection to stock stores and dispose of the item only if it hasn't sold there either.
The destruction of illiquid assets is more profitable for the company than its storage and new attempts to sell it. After all, trying to sell a product for which there is no demand, you still need to spend money on rent, advertising and employee salaries. For the same money, you can produce a new product.
5. Merch
Often times, companies do not derive a significant portion of their revenue from the main product, but from fan merchandise. For example, Hollywood franchises make money not only from movies, but also from T-shirts, mugs and toys with characters. This is best illustrated by the example of Disney.
Disney first sold the rights to Mickey [Mouse] for a fixed $ 300 for use on notebooks, then comics. In 1930, Carolyn Clarke came and asked for permission to make stuffed dolls. The studio then created a merchandising division, which made one of the first deals with an ice cream maker. And ten million Mickey Mouse waffle cones sold in just the first month.
Ingersoll Waterbury was on the brink of bankruptcy when it signed a contract with Disney to manufacture a mouse watch. As a result, they "bred" in the amount of 2.5 million pieces.
From the book “Jamevue. How to build an organization that is not afraid of any virus ”.
But Walt Disney went further. After the success of Snow White, he decided to tell the story again, but this time in the format of an amusement park - Disneyland. Attractions and hotels were erected here, actors were attracted, who walked around in costumes of Disney characters all day and entertained guests. So the ideas and cartoon characters found new incarnations. There are five Disneylands in the world today, and over 600 million people have visited them.
6. Conveyor
At the beginning of the twentieth century, Henry Ford divided the complex process of assembling a car into a chain of simple operations. The first assembly line at the Ford plant was launched in 1908. This made it possible to involve unskilled employees in production, increase the productivity of the enterprise and reduce the cost of the car.
But it was on the example of the assembly of cars that Ford showed all the possibilities and advantages of the conveyor. He made in-line production the industry standard, along with the spread of electricity and chemicals became one of the pillars of the Second Industrial Revolution, which ended just at the beginning of the twentieth century.
7. Machine tools
The first loom appeared at the end of the 16th century in the weaving industry. Back then, stockings were knitted by hand, so they were expensive. Engineer William Lee was not satisfied with the low speed of knitters. In 1589, he invented the first knitting machine and presented it to Queen Elizabeth I. Automation accelerated production and reduced human error.
The queen rejected the invention because the introduction of looms would leave knitters out of work. But time has put everything in its place. In 1656, the first knitting factory with looms was launched in France. Over time, the number of machine tools only grew and they completely changed all industries. Now, instead of machine tools, smart robots and fully automated production lines are being introduced.
8. Credit card
In 1950, the head of Hamilton Credit Corporation, Frank McNamara, issued the first Diners Club credit card. The idea of creating such a means of payment came to McNamara a year earlier, when he went with friends to a New York restaurant, but could not pay for lunch because he forgot his wallet at home.
Diners Club was the name of the restaurant patrons club that McNamara was a member of. Initially, cards of the same name were issued only to members of this organization. They allowed more money to be spent on food and drinks than the person had with him. Once a month, the management of the club sent out statements to the participants about the funds spent - and they had to pay off the debt within two weeks. And the commission for using the card (5-7% of the order amount) was paid by the restaurateurs - it was profitable for them, because the customers with the Diners Club card ordered more than they had planned.
9. Lock-In
This selling technology is also called "Razor and Blade". Its essence is to sell high-quality goods at a low price, and to receive the main profit from the sale of expensive consumables.
The first Lock-In technology was used by John Rockefeller's Standard Oil at the end of the 19th century. She sold cheap kerosene lamps. The business was still going uphill, because Rockefeller's main income came from the sale of expensive kerosene, necessary for using the lamp.
But this trade model became widely known after its application at Gillette: replacement razor blades were much more expensive than the machine itself. Now the PlayStation uses a similar sales practice. Their consoles are cheaper than computers of the same performance, but the company's main income comes from selling expensive games.
10. Barcode
In 1952, Joseph Woodland and Bernard Silver introduced a way to automate sales - the barcode. Woodland was inspired by Morse code. He admitted that he simply took the dots and dashes and "stretched them down" - the resulting lines were narrow and wide.
With the advent of barcodes, sellers no longer had to manually enter the product code and price into the cash register - it was enough to scan the label on the package. But from the moment of development to the mass introduction of the technology, it took 22 years: the first purchase made by a barcode was a package of Wrigley chewing gum. It was purchased on June 26, 1974 at 8:01 am from the Marsh supermarket in Troy, Ohio. Together with the check, it is kept in the Museum of American History at the Smithsonian Institution.
One-dimensional barcodes have become the basis for two-dimensional - QR codes and Data Matrix. Their possibilities are wider. For example, new codes allow more information to be encrypted, such as lines of text and links to sites.
11. POS terminal
The abbreviation POS stands for Point of Sale - "point of sale". In 1973, IBM introduced the first point-of-sale POS terminal for shops. It allowed registering the sale of goods, accepting card payments, and issuing checks. The terminal not only accelerated the trading process, but also protected against fraud on the part of employees: you cannot hide cashless payments in your pocket.
Modern POS accept cards with a magnetic stripe and a chip. They can also pay for a purchase or order in a cafe from a smartphone or smart watch. Since the POS terminal is connected to the cash register, the trading system immediately records the fact of payment and can deduct the sold goods from the warehouse balance.
A POS terminal is usually part of a cash register system, along with a touch screen for the cashier, a barcode scanner and a receipt printer. This solution helps business owners keep track of important data: for example, how much goods were sold and by whom, how many returns were made, at what time the trade was most active.
12. Decentralized management
General Motors was having a hard time in the 1920s. The corporation's CEO, Alfred Prichard Sloan, saved the corporation from collapse and laid the foundations for modern decentralized management. In 1923, he created an independent board of directors, administrative and finance committees. They coordinated the work of companies and divisions that were part of General Motors, developed the tactics and strategy of the corporation in various areas and in different markets.
But Sloan delegated some of the powers to the divisions and set clear financial targets for them - an analogue of modern KPIs (Key Performance Indicators). Thus, the management of the company became decentralized. Each committee made decisions within the framework of its tasks, and smaller practical issues were discussed within the divisions.
As a result, General Motors not only stayed afloat, but already in the 1930s became one of the key players in the industry. Sloan's management scheme has become a classic in business management.
13. Low-cost airlines
The first low-cost airline in the world is considered the American company Southwest Airlines. It launched low-cost flights in 1971 and today ranks first in the world in terms of the number of passengers carried.
When buying a ticket for a low-cost airline flight, you pay only for the basic service - a flight from point A to point B. But you will have to pay for all additional services separately: sometimes you have to pay more for the transportation of a suitcase in the luggage compartment than for a seat in the cabin. There are other disadvantages: for example, an inconvenient flight schedule, long connections, arrival at the airport a hundred kilometers from the city. But for many, it is still a comfortable and budget way to travel light.
14. Pay per click advertising
PPC (pay-per-click) is a format in which an advertiser pays not for views of banners on a page, but only for the number of clicks on a link. Of course, the number of ad views is always much higher than the number of conversions, which is why PPC is more expensive. Because in this format, the likelihood of turning a potential client into a real one is much higher.
It is believed that the PPC first appeared in 1996. This advertising format was included in their web catalog Planet Oasis, which collected links to information and commercial sites. The advertiser paid not for placing ads on the site or the number of views, but only for the number of clicks on his link.
15. Crowdfunding
As part of crowdfunding, people who want to support the project transfer certain amounts to it. For this, the organizers of the project can promise them various privileges: indicate the name of the donor in a special section of the site, send a souvenir, open access to a new album or video. Also, crowdfunding helps the organizer of the collection to assess the demand for their product even before the start of its production.
This is not to say that this method of financing a business appeared only yesterday. People often united to achieve common goals - building and repairing a road or public facilities. But in the modern format, crowdfunding began with music: in 2001, ArtistShare appeared in the United States, which raised money for recording albums, preparing concerts and shooting videos. By 2020, 10 projects launched on this site have become Grammy laureates.
In 2002, director Eric Bauman launched FilmVenture.com, the first crowdfunding platform for the film industry. And in 2009, Kickstarter.com launched. They raise funds for a variety of projects: from films and music to gadgets and social initiatives. The largest project on the platform of all time - smartwatches Pebble time. The organizers collected $ 20.3 million from 78 thousand participants. And the most talked about project right now is a washing machine for wireless headphones. Cardlax EarBuds Washer.
Jamevue is the opposite of déjà vu, where something familiar seems foreign. With this word Dmitry Kostygin called his business theory of a sharp increase in the efficiency of an enterprise. According to the author, it will help businessmen build loyalty programs, improve stores, and design a flexible and reliable company structure capable of adapting to any changes on market.
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