The Hub Cool News

Amelia’s Answers

ameliaA "stealthy newcomer" named Amelia "embodies a new approach to artificial intelligence," reports Christopher Mims in The Wall Street Journal (9/29/14). Similar to IBM’s Watson, Amelia "is the product of an attempt to understand how people think, rather than to copy the means by which they do it. Many traditional AI efforts try to map the human brain … But Amelia is all about turning what psychologists know about how thinking happens … rather than how it’s carried out by our neurons."

"We didn’t achieve powered flight by copying birds," says Chetan Dube of IP Soft, developers of Amelia. "First we had to understand the principles of flight." Amelia "learns from textbooks, transcriptions of conversations, email chains and just about any other text. As long as the answer appears in the data she gets, she can solve problems." She is now being tested in call centers, where the "goal is consistency — every time anyone calls, that person should get the same, correct answer," which is based on correct answers previously supplied by humans. (video)

The larger goal, of course, is to replace humans, "especially in a customer support type of situation." However, Amelia "remains, like all synthetic intelligences, merely a clever way to automate tasks" and "has no free will." She does have feelings, though. If you tell Amelia you hate her, "the three variables that define her emotional state — arousal, dominance and pleasure — are negatively affected." "Our goal here is not to just model emotions, but to use what we detect of those sentiments in decision making," says Ergun Ekici, Amelia’s lead architect.

Literate Sunday

pbrA dive bar in Brooklyn is doubling as a "short-story workshop" for unknown authors, reports Sheila McClear in The New York Times (9/28/14). Unknown — literally. Authors of submitted short stories remain anonymous. Some are famous writers but others are not. Each Sunday — known as Literate Sunday — Matthew D’Abate "puts out a new crop of five stories … during his bartending shift" at the Plank, in Williamsburg, from 2 pm to 10 pm. Patrons can enjoy the stories along with $3 cans of Pabst Blue Ribbon, and offer their critique.

"The point of Literate Sunday is to remove, if not subvert, the idea of fame, removing the ego and the names from the pieces so the stories can speak for themselves," says Matthew. The anonymity is important for another reason: "There is this real fear through social media and through the experience of growing up online of being very conscious of what’s linked to your name," says Kara Rota, who has submitted pieces. "I think there’s a real value to be found in doing something creative anonymously that gives you a freedom you don’t have a lot anymore."

Those in-the-know can access the stories anytime, as Matthew keeps a stash of about 100 pieces in a chest in the back of the bar. While he steadfastly refuses to name any of the writers, he does disclose that they include authors of bestselling books and contributors to Paris Review and McSweeney’s. Matthew also makes stories available to subscribers of an email list, currently numbering about 500 people in 12 countries. "It’s about the writer being free," says Matthew, adding: "All the greats have come from outside the system."

Slush Puppies

slush-puppieThe late Will Radcliff turned "brain-freezing super-sweet drinks" into a $25 billion business, reports Paul Vitello in The New York Times (9/22/14). Mr. Radcliff was a peanut salesman who had his million-dollar epiphany while "inspecting a slush-making machine" at a trade show. He calculated that he "could sell a drink for 10 cents and make 7 cents" each time. The Slurpee was already available, but he thought "they were not being marketed well enough to spread the word about the pleasures of flavored ice drinks."

He "began studying the aesthetics of flavored ice drinks. He reviewed the options on texture (shavings, granular mush), flavoring (supersweet? a dollop of tartness?) as well as drinking containers and certain intangibles." Among the insights, he told the Cincinnati Enquirer, was this: "Believe it or not … we have people who buy it because they say they love to hear that ice hit the cup." The name Slush Puppie arrived "over a six-pack of beer on the porch of his Cincinnati home," with the help of Mr. Radcliff’s wife and daughter.

They adopted "a floppy-eared cartoon dog as its symbol," and with just $970 — which was all they had — launched Slush Puppie Corporation in 1970. "The Slush Puppie is now sold around the world at convenience stores and gas stations from vending machines." The company was sold "in 2000 for $16.6 million to … Cadbury Schweppes. The J&J Snack Food Corporation of New Jersey bought Slush Puppie in 2006." "He could sell anything to anybody," said his daughter, DeeAnn. Will Radcliff was 74.

Ice Ice Baby

iceNoble W. Harris believes "the right ice … is the cornerstone of any mixed drink," reports Cheryl Lu-Lien Tan in The Wall Street Journal (9/25/14). Noble mixes drinks at The District Tap House in Manhattan, and believes ice is "opening up new doors" for mixologists, as different kinds of ice "chill things down at different speeds." The first consideration is the size of the ice: "The larger the ice, the less diluted a drink gets. This is especially important if you’re a slow sipper."

For "drinks that taste better after sitting a while" — such as Scotch, for instance — Noble favors "big spheres of ice that fit snugly in a squat lowball glass." This lets the drink breathe and is "also really nice to look at," he says. With highball glasses, Noble "likes to use long rectangular ‘spears’ of ice that are about 1 inch wide and 4 inches long." Shaved ice has its place for strong drinks like mint juleps that "need dilution from fast-melting ice." Meanwhile, square cubes "about an inch and a half high, work fine in most cocktails."

When using square cubes, Noble goes for "perfect clarity," often achieved using filtered water. He says you shouldn’t keep ice in the freezer too long, lest it begins to absorb aromas from neighboring items. If it’s an intentionally flavored cube, that’s another story: Noble "likes to add extra flavors to a cocktail via ice in flavors such as rosemary, lemonade, ginger or apple juice." The most common bartender mistake, says Noble, is "not using enough," ice, as there’s nothing worse than a drink "where after two minutes all the ice has melted."

Unverpackt

unverpacktA new grocery store in Germany "has dispensed entirely with disposable packaging," reports Feargus O’Sullivan in CityLab (9/16/14). Located in Berlin, Original Unverpackt (unverpackt means unpackaged) also sells no brand-name items. The store’s "dry goods — rice, cereal, spices — are stored in large dispenser bins, and customers fill containers they have either brought with them or purchased in the store. Liquid goods, such as juice or yogurt, are sold in jars or bottles with a deposit on them."

Most of the store’s "products are organic" with origins noted. The assortment is a little bit quirky: "As yet there’s no meat or cheese (problems working out a packaging-free system for these, perhaps?), but you can get chewable toothpaste tablets … On the plus side, the brand-free policy doesn’t seem to have led to only single, generic choices being offered; the store generally stocks several types of everything they sell. If customers shop regularly, then the potential to cut the amount of packaging they … throw in the trash … is vast."

The absence of brands and packaging also apparently helps "avoid the risk with projects of this type" — the associated cost reductions address the traditional high-cost of organic goods. Indeed, "many or most of Original Unverpackt’s products cost a little less than they would at the average German grocery store." In addition, "the bring-your-own-containers system is also likely to induce … customer loyalty," given that shoppers may be more likely to return once they’ve invested in "a set of appropriately sized Tupperware."

What If?

what-if"Trying to answer a stupid question thoroughly can take you to some pretty interesting places," writes Randall Munroe in What If?, reviewed by Steven Poole in The Wall Street Journal (9/20/14). His book was inspired "by apparently ridiculous questions sent by readers" of his website, xkcd. For example: "What would happen if you tried to fly an electrically powered airplane on Venus?" Answer: "Your plane would fly pretty well, except it would be on fire the whole time … Venus is a terrible place."

Or: How heavy would a mole ("a unit of measure in chemistry") weigh if it were made of up moles (the animal)? Answer: It would "be about as heavy as a planet." "The mole planet," Randall writes, "would be a giant sphere of meat." To the question of "what would happen if you tried to hit a baseball that was moving at 90% of the speed of light," Randall replies: "I sat down with some physics books, a Nolan Ryan action figure, and a bunch of videotapes of nuclear tests." In other words: Ka-Boom!

The point of such estimates is to help "get a handle on a problem" by "reasoning from first principles: work by analogy, perform very rough orders-of-magnitude calculations, or try to flip perspectives." This is often otherwise known as "blue-sky research … Yet even the most bizarre examples teach us something surprising about the fragility of human life, or the astounding variety of the intellectual tools that humanity has devised or just the sheer amazingness of the universe."

Credit Worthy

sharon-loveHow shoppers pay is the inflection point of a connected retail experience. A Hub White Paper by Sharon Love of TPN. The phrase ‘brick-and-mortar’ came into the lexicon in late 1999 and early 2000, duringthe first Internet bubble. In some camps, it came across as a bit of a put down. "Oh, they are just a brick-and-mortar play." There was an outcry from young businesspeople at the time — why did these companies need actual buildings or production facilities to drive commerce? They believed that the sustainable business model of the future was pure-play digital. We now know that the answer isn’t that black-and-white.

Clearly the brick-and-mortar model continues to have a significant role in driving sizable sales. It has not gone away. The term, however, has spawned many more iterations to account for different types of business models and trends — bricks-and-clicks, site-to-store, showrooming and now, webrooming. These models are built on the need to infuse traditional shopping with digital solutions that meet the expectations of today’s shopper, and also more recently evolved buying experiences. Those expectations have been shaped, in large part, by Amazon, the company that, at least until recently, never entertained the idea of having a brick-and-mortar presence. Drones, sure, but not a physical store. Read The Rest of The White Paper.

Panorama Surveys

A pair of young Yale graduates is taking an Uber-esque approach to the educational experience, reports Farhad Manjoo in The New York Times (9/3/14). Like Uber, Panorama is "using unconventional methods of tech start-ups to reinvent industries that have long been seen as tech backwaters." In this case, they are collecting and analyzing "large troves of data" to help "address problems in American education" — specifically teacher performance. Basically, Panorama has come up with a new way to capture student evaluations.

"Education is just starting to figure out what measurement actually means," says Panorama co-founder Aaron Feuer. "Five years ago we thought test scores were the answer to everything. We’re offering a way to focus on the right metrics." While conducting student surveys is not a new idea, Panorama has made "its surveys more widely accessible than older educational surveys" via "its own scanning system" and "says its surveys and analytics services are about half the price of older survey methods."

Panorama has also developed an analytics dashboard that makes it easy for teachers to access results. Leila Campbell, a young high-school teacher, says Panorama "has been transformational" for her. Even though her students’ test scores were good, students said she wasn’t connecting with them. So, she says she now opens up to them with stories about the vulnerabilities she felt as a college student, and explains why she’s working with them. "They start to get me as a human being," she says. "And they’re willing to follow me when I push them harder." Panorama currently runs its surveys in more than 5,000 schools.

Parchment Rankings

Students tend to prefer colleges with a specific mission or personality versus those without, reports Neil Irwin in The New York Times (9/4/14). A company called Parchment, which "processes transcripts for students applying to college," analyzed the choices "students made when they were admitted to more than one university." While well-known schools such as Stanford, MIT and Harvard topped the list, some relatively obscure schools outperformed traditional rankings based purely on "selectivity, test scores and so forth."

For example, Harvey Mudd College "is the No 10 ranked liberal arts college in Parchment’s latest rankings, compared to No. 16 in the US News rankings." It attracted students like David Tenorio, whose other choices included Harvard and Northwestern, because of its "mix of a demanding technical education" and "a less cutthroat feel than some bigger schools and a greater sense of fun." Thyra Briggs, Mudd’s vp of admissions, says because the school hammers home its mission, it has "an incredibly self-selecting applicant pool."

Mudd is kind of like one of the "funky boutiques that appeal to a particular type of customer" compared to national universities that "are essentially the department stores of higher education." Schools like Brigham Young, because of its "religious thrust" and those with a narrow focus, like Rhode Island School of Design, also tend to be top choices. Berea College, whose focus is on educating students from poverty, is also popular. Will Bowling, a freshman, says he was attracted to an atmosphere of "kindness" that he says is "hard to find."

Seuss Juice

A marketing machine keeps the Dr. Seuss brand alive and well 23 years after his death, reports Anna Russell in The Wall Street Journal (8/29/14). This is actually a fitting legacy for Theodor Seuss Geisel, who got his start in advertising but made his name writing "The Cat in the Hat" and 43 other children’s book classics. All told, Seuss has sold about 600 million books "in 17 languages and 95 countries." Last year alone, Seuss sales "climbed to 4.8 million units in the US … up from 3.2 million in 2010."

His 93-year-old widow, Audrey, as head of Seuss Enterprises, works with a licensing and marketing specialist to coordinate an annual calendar of promotions with Random House, publisher of the Seuss series. This begins on March 2nd, the author’s birth date, which the National Education Association (NEA) also celebrates as "Read Across America" day in his honor. "This year, the NEA purchased an estimated 36,000 discounted Seuss books" for distribution through First Book, which provides books and other resources to "kids in need."

Earth Day is pegged to Dr. Seuss’s environmentalist manifesto, The Lorax. In May and June — graduation time — the focus shifts to "Oh the Places You’ll Go!" and the year wraps up with "How The Grinch Stole Christmas!" Random House also looks for timely tie-ins, such as making Horton ("a person’s a person no matter how small") The Elephant a mascot for anti-bullying. Meanwhile, to keep the catalog fresh, the publisher is releasing a new book of some of Dr. Seuss’ earliest stories, originally written for magazines.

Graduate Hotels

graduate-hotelA new hotel chain offers "guests a chance to re-live the college experience," reports Craig Karmin in The Wall Street Journal (8/27/14). Graduate Hotels "is targeting college towns across the US." They "won’t resemble beer-soaked fraternity houses or impersonal dormitories" but they hope to "appeal to folks coming back to college to watch sporting events, attend reunions or show the campus to their children." The chain is believed to be the first "to target exclusively college areas."

Each hotel "will have a bar and restaurant, locally inspired art collections and 100 to 150 rooms with handcrafted items and rates slightly above the area’s limited-service hotels," which typically include Hilton and Marriott. "These towns are seeing a renaissance," says Christian Strobel of Graduate Hotels. "They are often state capitals or cultural hubs for a state, and they attract entrepreneurial companies by offering an alternative to big cities." Graduate also hopes to cater to "people doing business with the universities or with other firms in town."

In Athens, Georgia, the Graduate Hotel "will include vintage ceramic lamps in the shape of the University of Georgia’s bulldog mascot, while album covers from REM and the B-52s, bands that got their start in the southern town, will adorn the walls. So will photos of Italian fashion designer Emilio Pucci, who studied agriculture at the school. The Tempe, Arizona, hotel "will feature an ant farm behind the front desk, a nod to Arizona State’s popular social insects department." Plans are "to open 20 of these hotels over the next five years."

10 Songs

In his latest book, Greil Marcus distills the history of rock ‘n’ roll into just 10 songs, reports Wesley Stace in The Wall Street Journal (8/23/14). In part, Greil picks his list based on certain themes, like "escape," that are particular to rock ‘n’ roll. But the overarching idea "is how different artists cover, and re-discover, one another’s work." For example, In the Still of the Night, by the Five Satins, "has hit the Billboard charts in four different decades." Phil Spector’s To Know Him to Love Him was written for the Teddy Bears and covered by Amy Winehouse, among others.

In addition to those two songs, Greil’s ten songs are: Shake Some Action; Transmission; All I Could Do Was Cry; Crying, Waiting, Hoping; Money (That’s What I Want); Money Changes Everything; This Magic Moment; and Guitar Drag. Chances are you don’t know at least some of these works, and note that none was written by Bob Dylan or The Beatles. However, Greil circles "back to the big guns," noting, for example, that the Beatles don’t cover Buddy Holly so much as they conduct "a kind of séance with him."

Greil also connects Ben E. King’s rendition of This Magic Moment to "Rabbit Brown, serenading sweethearts on Lake Pontchartrain in 1927" and back again to Lou Reed‘s performance of the song in David Lynch’s Lost Highway. The connection between cinema and rock ‘n’ roll is also explored, suggesting that "the screen, silver or small, is where rock really happens." And he quotes Bob Dylan’s observation about Like A Rolling Stone: "a ghost is writing a song like that, it gives you the song and it goes away."

20 Cellos

Maya Beiser channels Janis Joplin, Kurt Cobain, Jimi Hendrix and others through her cello, reports Corinne Ramey in The Wall Street Journal (8/26/14). Her idea is to play their “voice.” With Kurt Kobain, for instance, Maya produces a “grimy, fuzzy howl.” “His voice is raspy and out of tune and not clean,” says Maya. Getting at that “is about … diving into that world.” Similarly, Jimi Hendrix’s solo on Little Wing is “so out of tune … You have to learn to bend and sort of be around the note.”

“All of this insane perfectionism that we’re taught, none of that exists in rock,” says Maya, who says her revelation came as a teenager, hearing Janis Joplin sing. “It was this revelation, that someone can be so raw and give it all,” she says. Her new record, Uncovered, layers “as many as 20 cello tracks on top of one another,” turning “one acoustic cello into a rock band.” Maya also detunes the cello and uses “certain kinds of plucking to create a rock-band palette of sounds.”

Arranged in collaboration with composer and professor Evan Ziporyn of MIT, the songs are reduced “down to their essence, to expose this really beautiful thing,” says Evan. “It’s too perfect if you just imitate,” he says. Maya says the result is not ‘pop,’ which she defines as “formulaic” and “makes lots and lots of money.” “Every artist on this album is anything but formulaic,” she says. “I think this music is just as valuable and important as Bach and Schubert.” She explains and demonstrates further here.

Zippo Marks

Zippo is doing better than ever even though the number of US smokers is half what it was in the 1950s, reports Abram Brown in Forbes (9/8/14). Last year’s sales topped $200 million, a record. Zippo’s claim to fame is, of course, its innovative and iconic cigarette lighter — developed "with a windproof chimney and a distinctive hinged lid" — in 1932. "After soldiers received the lighters in WWII, Zippo successfully marketed itself with a utilitarian, made-in-America image for the following half century."

Each lighter came with a lifetime guarantee, "meaning Zippo would continue to fix the lighter as long as its owner sent it to the factory." This apparently worked for Frank Sinatra, who "was buried with his trusty Zippo in 1998." It hasn’t worked so well for younger consumers "who were children when Sinatra died." The key to Zippo’s renewed success is largely its positioning "as a maker of talismans, lucky charms — or something akin to customized belt buckles" — and the "30,880 unique designs" it produced last year.

That’s "up from 8.900 a decade ago … partly owing to a new Zippo.com feature where you can design your own lighter from scratch." Zippo has also expanded into China, opening 14 retail stores there, "riding the idea of Zippo as an all-American lifestyle brand. The stores carry a Zippo-designed clothing line." Zippo has two stores in Las Vegas, as well, and has further line-extended into camping gear. "This is just a metal box," says George Duke, Zippo’s third-generation owner, adding: "There’s a lot you can do with a metal box."

Hi-Ho D’Addario

D’Addario succeeds "by experimenting with a commodity good and refining it through small, but significant, innovations," reports Karsten Strauss in Forbes (9/8/14). The commodity is musical instrument strings, which it turns out at a rate of "some 700,000 per day." This "netted an estimated $12 million on $169 million," including other accessories, and growth at a rate averaging "6.2% a year during the past decade." It is a long way from the company’s roots in "17th-century" Italy, and its US entry in 1905.

As recently as the 1950s, Charles D’Addario worked out of his basement in Queens, New York, "where sour-smelling animal intestines stretched on racks were twisted into strings bound for violins, cellos and harps." He’d then sell his wares "out of his car to luthiers and players from Boston to Washington DC … It was Charles’ son, John … who recognized the benefits of synthetic materials, like DuPont’s new creation, nylon, invented in 1935." After Elvis happened, John split off to manufacture steel strings, for the electric guitar.

John’s chief innovation was to make the "string’s steel cores hexagon-shaped instead of cylindrical, which gave the wires wrapped around them something to hold onto, creating a stable string that rang true." John’s son Jim, the current CEO, says automated equipment is critical: "Whenever a major innovation was developed, we would retrofit the entire fleet of machinery," he says. The inherently disposable nature of the strings is another key, because "they wear out and need to be replaced frequently."

Swash Machine

Procter & Gamble hopes consumers will find a place in their closets for a new kind of laundry machine, reports Elizabeth Holmes in The Wall Street Journal (8/13/14). Developed in collaboration with Whirlpool, the machine is called Swash. It stands "more than four feet tall" and "uses gel-filled pods to help neutralize odors, remove wrinkles and restore a garment’s fit." Swash is not intended "to replace laundering or dry cleaning … just delay them." It is aimed at "a new laundry consumer: the re-wearer."

"Today, it’s smart," says Mike Grieff, P&G’s research and development director for new business creation and innovation. "Why would I wash something and go through the process if it’s really, really not that dirty?" Procter & Gamble has been developing against this insight for several years now, initially creating "a line of consumable products, including odor- and wrinkle-removing sprays." These were meant for "college students who didn’t want to do laundry."

The target now is "a higher-spending group of fashion-conscious people" — both men and women. Swash does not come cheap, retailing at $499, plus another $6.99 for the gel pods, each good for one use. Basically, the user hangs a garment inside, which is then sprayed"with a gel-like solution, hydrating the fibers to remove wrinkles and restore fit. Thermal heating technology dries the garment in 10 minutes," which consumers said was about how long it takes to shower. "It’s like a microwave for your clothes," says Mike.

Fox News

nate-silver-foxFoxes are "more wily and flexible learners" than hedgehogs because of their childhoods, reports Alison Gopnik in The Wall Street Journal (8/20/14). The difference between the two animals — whose traits are often ascribed to people — was defined by the Greek poet Archilochus, who said: "The fox knows many things, but the hedgehog knows one big thing." (Archilochus apparently knew one thing but didn’t know how to make it rhyme.) The concept was later popularized by Isaiah Berlin, an Oxford philosopher.

Berlin ultimately decided his observation was oversimplified, but recently, psychologist Philip Tetlock "studied expert political predictions and found that foxy, flexible, pluralistic experts were much more accurate than experts with one big hedgehog idea … In tribute to this finding, the statistics whiz Nate Silver chose a fox as the logo for his website." Biologist David MacDonald, meanwhile, suggests the fox-hedgehog difference is, well, biological: "Hedgehogs develop their spines — that one big thing — almost as soon as they are born."

This makes them independent within six weeks, compared to fox cubs, who "are dependent for six months." Where hedgehog dads take off after mating, fox dads "help bring food to the babies." Not only that, they bring still-alive prey "and the babies play at hunting them." They "practice and develop the flexible hunting skills and wily intelligence that serve them so well later on." So, where hedgehogs quickly adapt to one environment, a combination of parental protection and play teaches them to "cope with a changing world."

Beane’s Genius

oakland-as-capContrary to popular belief, the Oakland A’s success is not because of homegrown players, reports Jared Diamond in The Wall Street Journal (8/20/14). In fact, the "A’s have used just four homegrown players in 2014, the fewest in baseball by a wide margin." By comparison, the languishing New York Mets "have used 21, the third-highest total." Interestingly, both teams have "similar payrolls" — the Mets actually spend a bit more ($85 million) than the A’s ($82.3 million). The difference may be explained by "two central tenets."

The first tenet is general manager Billy Beane‘s legendary "ability to identify (or luck into) cheap, productive players whom his competitors don’t want … No team does a better job of rummaging through everybody else’s attic and discovering gold." The other is Billy’s "commitment to financial flexibility," which enables him to "constantly tinker with his assets." Unlike the Mets, he doesn’t allocate 23.5% of his budget to a single player (David Wright), much less 49% to three players (David Wright, Curtis Granderson and Bartolo Colon).

The A’s highest-paid player at season’s start, Yoenis Cespedes, accounted for just 12.8% of the team’s budget, and its three highest-paid (Yoenis Cespedes, Jim Johnson and Scott Kazmir), "made up 35.8% of the payroll." Yoenis has since been traded. Granted, it may be easier for a smaller-market team like the A’s to avoid employing big stars, but the bottom line is "the A’s are within striking distance of their third consecutive American League West crown," and 8th since 2000, while the Mets haven’t made the playoffs in eight years.

Data Lakes

data-lakeGeneral Electric has added a "data lake" to its information ecosystem, reports Quentin Hardy in The New York Times (8/11/14). A data lake is a "method of analyzing sensor information from industrial machinery in places like railroads, airlines, hospitals and utilities. GE has been putting sensors on everything it could for a couple of years" and is now "working with an outfit called Pivotal" to look "at information from 3.4 million miles of flights by 24 airlines." As a result, "it figured out things like possible defects 2,000 times" faster than before.

GE’s William Ruh says this is only the beginning: "In 10 years, 17 billion pieces of equipment will have sensors," he says. "We’re only one-tenth of the way there." Meanwhile, "billions of humans are already augmenting that number with their own packages of sensors, called smartphones, fitness bands and wearable computers. Almost all of that information will be uploaded someplace, too," creating "a world-changing ecosystem of digital hardware and software spreading into every area of our lives."

The "relentless acquisition and analysis of digital information" might be compared to the advent of the automobile, which "succeeded through the widespread construction of highways and gas stations" and spawned "suburbs, fast food and drive-time talk radio," among other things. Already, the growing data ecosystem is enabling "businesses like Uber and Airbnb" to succeed "without assets like cars and rooms, instead coordinating data streams about the locations of people, cars and bedrooms."

Data Magic

stitch-fixThe magic of the emerging shopping experience — online or off — "comes from the data," reports Molly Wood in The New York Times (8/15/14). For e-commerce enterprises, the data enables a level of personal service that approximates — or potentially improves upon — that which can occur naturally in a store. "In traditional retail, they have the benefit in that they have real people who in theory could offer a very personalized experience," says Katrina Lake, founder of Stitch Fix, an online women’s clothing retailer.

Stitch Fix "sends its customers boxes of clothes picked by a combination of personal stylists and big data." The advantage over, say a mall or a traditional e-commerce play, says Katrina, is that it eliminates the often overwhelming array of choices. Bill Gurley, a Stitch Fix investor, says the data science involved in making this happen is significant. "There’s a 15-page profile, there are over 66 characteristics tracked and there’s a predictive heat score for every single item against every single user."

Birchbox uses a similar approach with beauty products. "We use curation and personalization as a way to make the internet have some of those fun and satisfying elements of shopping," says Birchbox co-founder Katia Beauchamp. "There is still this desire to work with somebody that you trust." Birchbox takes a similar approach at its sole physical store, where Birchbox’s online customers can provide their email address to an employee, who then directs them to relevant items, based on their profile.