Comparing just three different parts of the city — Chelsea/NoMad, Flatbush, and East New York — points to very different testing trends. These neighborhoods could be fairly described as high, medium, and low income, respectively. While Chelsea and NoMad (zip code 10001) saw the total number of tests per day rising from April 1 to May 20, Flatbush and East New York (zip codes 11203 and 11239) actually saw their daily testing rate *fall* during the same period. Although the number of positive cases dropped steadily over time in all three areas, the rate of change (indicated by the line graphs) for testing and positive test cases trend downward together in Flatbush and East New York. This suggests under-reporting of cases. The Chelsea and Nomad rates of change, by contrast, show an acceleration of testing and declining growth in positive diagnoses. With bigger sample sizes and more data points, we can confidently say Chelsea and Nomad had falling R0s.
Since Phase 1: More universal testing and better results
Today, looking back on the two weeks since Phase 1 began, there are sustained signs of improvement. Across our three sample zip codes, we saw total case levels flatten while total testing continued to increase, giving us confidence that our R0 was truly falling across the different locales.
The data indicate that targeted interventions in areas like East New York meaningfully boosted the rate of testing. Whereas testing rates hovered around 30 per day for all of April and May, for one day in June, shortly after Phase 1 reopening, testing jumped to about 150.
These signs bode well. So should we be encouraged? On balance, yes. Even in our biggest recent gatherings, the Black Lives Matter protests, protesters have had each other’s backs, wearing face masks and gloves and offering hand sanitizer. There may be pockets of regression as Gen Zers flock back to bars sans masks, but with new cleaning and hygiene norms everywhere, I remain cautiously optimistic that our city will heal.
Today: Still worth taking a different “PAUSE”
Despite the positive recent trends, the aftershock will be felt for a long time. Nearly as many New Yorkers have died from COVID-19 as live in the 10001 zip code. But very few of these deaths were in Chelsea and Nomad. Flatbush experienced hundreds of deaths, and East New York experienced seven times the number of deaths per 100,000 that Chelsea and Nomad did.
It is worth pausing to think through what exactly needs to change in order for the darkness of a pandemic case map to not reflect the darkness of neighborhood residents’ skin.
Five new realities and seven mindset shifts to get you work-ready
You have amassed incredible book smarts in the last four years. Now it is time for you to build professional smarts. For me, as a first-generation Jamaican American, I didn’t have many examples in my private life of how to navigate the professional settings I ended up in — finance and strategy consulting firms. I had to learn that hustle, diligence, and many other things that I thought I’d learned in school all look quite different in a workplace. Below are five key differences I observed, and seven mindset shifts I had to undergo to effectively adapt.
Five new realities of how school differs from the workplace
1. The role of analytical skills
In school I gained the impression that I could think, plan, or brute-force my way into almost any opportunity I wanted. In retrospect, these tactics worked well because I was either undertaking something entrepreneurial, like starting a student group, or operating within a well-defined system, like a class scoring rubric. Most workplaces, by contrast, are somewhere in between. Systems are loosely-defined, with unspoken rules and silent expectations. Consequently, communication skills and other “soft skills”, like people skills and team collaboration, are more “make or break” than the analytical skills you learn at school.
2. The belief in objectivity
In academic courses, every attempt is made to set an objective grading rubric, to pre-define standards of what “right” is and what “good” looks like. While some companies try to come up with a trajectory map that emulates this specificity of standards, I have never seen one that wasn’t wide open to interpretation. Phrases like “produces consistent, high-quality work” on qualitative rating systems where the highest score is “exceeds expectations” are typical. These are vagaries layered on moving targets. Thus, it becomes your responsibility to manage not only your own performance and development, but also how you are perceived.
3. The idea — and relevance — of a “right answer”
When a teacher poses a question to a class, more often than not there is a right answer ready to hand. Not so in business. More likely than not, the question is being asked *because* there is no ready answer. In strategy consulting (which is essentially project-based problem-solving for companies), I’ve found there can be multiple, equally valid answers to a question. Which answer you should lead with is context-dependent. The expansive number of unknowns also means you can expect to be wrong more often in the working world. In finance, peers often told me “as long as I’m right more than I’m wrong, I’m in good shape” — and these were peers putting other people’s money and, thus, livelihoods on the line with their decisions. Still, they were confident enough to take action and take responsibility for the consequences.
4. How you engage with authorities
Without a right answer at the ready, and with a lot of subconscious expectations, many managers struggle to give explicit guidance. Instead, most managers provide general guidance and are prone to make corrections after the fact. It is up to you to figure out what you don’t know you don’t know, so you have a comprehensive understanding of your development areas and how to meet or exceed expectations. This requires you to build rapport with and learn from peers and authorities alike. You build rapport by taking an interest in how they operate and what you should emulate. Figure out how you can make your boss’ life easier and also how to gracefully communicate your and your project’s needs.
5. How you define success
In school, there is a fairly narrow path to “success,” defined by grades and how advanced or complex the subjects you study are. By contrast, career success is deeply individual. Choosing your major in college may seem overwhelming but is finite compared to the unlimited number of career choices you will have. These choices will be multifaceted. You will need to balance your goals, financial needs, passions, and strengths. Rather than be overwhelmed, you simply need to be informed about the implications of each choice for your future opportunities, and to accept that you may not have the exact perfect job all the time. Indeed, a perfect job may be mythical, as no one likes their job all of the time.
Seven mindset shifts to get “work-ready”
The above differences may sound straightforward on the surface, but they require a number of mental shifts to psychologically prepare for the working world. Below are seven “From / To goals” that will set you on a strong footing for your foray into the working world.
1. Thinking of work tasks as “assignments” → Big-picture thinking about team objectives
Rather than thinking of your tasks as things to tick off a list, you need to think carefully about how your work will be used. Questions you might ask yourself include: Who is using what I am making? What will they expect to see? Are there examples or precedents I need to model my work after? How much of this is custom content vs. standard content? How can I simplify things to make this immediately usable or actionable?
2. Perfectionism → Growth mindset
Rather than investing an infinite amount of energy into a project, you need to learn to invest the right amount of efforts to get the job done. There is no time to examine every alternative or to leave no stone unturned. This means you have to let go of any fear of being imperfect or wrong, as you calibrate with and for your team or client.
3. Expecting a roadmap → Learning to navigate
While there may be a few examples to learn from that help you make a preliminary plan or guide for your work and career, some aspect of your work will include uncharted territory. You will have to develop the skill of navigating as you go, in a way that progresses your objective as new information becomes available.
4. “Big reveals” → Bringing people with you as you produce work
Just working hard won’t necessarily win you appreciation or reward. Hoping people notice your work without sharing your progress or involving others also leaves you at risk of going in the wrong direction. Rather than revealing all your hard work when it’s done, validate your approach with your boss and pick up tips from your peers along the way. Involve your team in your journey.
5. Assuming people think like you → Listening to and managing people
Eliminate the word “should” from your vocabulary when thinking about others. Empathy is your most powerful tool for understanding coworkers and managing your boss, your teammates, and other co-workers.
6. Thinking a role is too good or not good enough → Focusing on learning and strong execution
Knowing how to execute simpler tasks inside and out means you will be competent enough to teach others and to find efficiencies. Taking on “stretch roles” that are beyond your current experience or knowledge is equally important. Don’t be afraid to take informed risks. Be confident in your capacity to learn, adapt, and step up.
7. Always sticking it out → Recognizing if an environment is unhealthy or just a bad fit
Only you know your tolerance-level for unhealthy work environments, which, unfortunately, there is no shortage of. If staying is important to your next professional or financial goal, you may stick out a job with a terrible boss or insane hours for several years. But notice how it’s impacting your sense of confidence and sense of self, and consider if there are alternatives that get you to the same place. And make sure you find a mentor or peer to talk it out with.
With that, class of 2020, I welcome you to the “real world.” I wish you a strong start, many adventures, and the confidence that comes with knowing that all of my friends from school have pretty much found their happy places.
We’ve now seen two waves of high face-mask fashion: the early-responders and the marketing-minded. Early-responders were fast acting in response to our crisis. Many early-mover brands that retooled for face mask-making, like La Ligne and Clare V., prioritized relief efforts by donating to coronavirus charities. Others simply channeled their creative energies, adapted their couture style to make face masks beautiful accessories.
The freshest wave of fashion-mask makers took a little more time to think, and have figured out different “masks as marketing” strategies. High-end designers have introduced matching outfits, with spring patterns and luxurious materials. “Free mask with purchase” has become a hook to drive sales. And branded masks, both for sale and as give-aways, are providing free advertising for masstige and boutique brands alike.
This industry pivot feels uniquely American. In countries like Korea, where mask wearing was more of a prior norm and more quickly adopted, fashionistas have focused more on eye-makeup than the actual mask aesthetic. America, it seems, is more masterful at driving spending. And looking at our annual ad spend, it’s no wonder: American companies spend 2.7x more on advertising compared to the next biggest spender, China. As they say, it takes money to make money.
American companies are also exceptionally creative at inventing new market niches. I would have expected Victoria’s Secrets to come up with the provocative mask that looks like lingerie. But Katie May beat them to it.
All in all, I tip my protective visor to the fashion industry for getting creative. One of the joys of living in New York is witnessing everyone’s self expression, and right now, the most universal way to do that is through face masks. I’ve collected a few now, with different fabrics, cuts, and patterns. It started out as a search for more comfort, and now, it’s become a statement.
In the new normal of remote work, we are still adapting to the intense amount of screen time that has replaced our in-person interactions. Perhaps you don’t feel like happy hours are as happy when you’re sitting an extra hour at your computer. Or you miss the simple phone calls that have suddenly turned video. For those who empathize, I offer the Zoom serenity prayer:
God grant me the serenity to accept the Zoom calls I cannot change; courage to cancel the video calls I do not need; and wisdom to know the difference.
Boundaries are harder than ever to set in these crazy times, but also more important than ever for our mental health and productivity. Take CGP Grey’s word for it.
Have your own remote work serenity prayer? Please share on Twitter @mbainthecity!
Each day as I step outside, keeping at a social distance, I am reminded of how not normal New York City life is right now. Empty sidewalks, save for the homeless and a few runners. Wary looks behind masked faces. Empty roads and fresh air. Supply shortages and long grocery store lines, for those who brave them. A sudden interest in the movie Contagion. This is the new normal. And when this passes, I wonder, what will the new new normal look like? I offer five predictions about how society, government, and individuals will change — or not change, as the case may be:
Niche media will become more mainstream than mass media
Everyone will emerge with a new survival skill
Asthma cases will drop, as the air quality improves with less pollution
Both parties will take the crisis as evidence that their principles are the right ones
Social activism will see a significant jump
I predict these changes, because they are already underway. Here’s what I’ve observed in the last few weeks of quarantine:
1. Niche media will become more mainstream than mass media
In the early days of corona virus news, national “reporting” was a loose term — you could read article upon article and learn almost nothing. As the severity of the situation became clear, hand-wavy vagaries just weren’t enough to keep us informed about how to stay safe. My peers and neighbors quickly started relying on a narrower set of localized and trusted sources for the intel we needed on the pandemic. The Dailyby the New York Times became the most pervasive, providing a combo of expert advice and front-line reporting. As New York became the epicenter of the U.S. outbreak, and no national support emerged, Gothamist emerged as one of the best sources of informative and actionable coverage. They gave locals a source of food security by reporting on Baldor, a restaurant supplier turned direct-to-consumer, with higher quality and better prices than anything on Instacart. The TLDR from national news outlets, by contrast, was just ‘food is getting harder to buy… countries should do something about that.‘
The same-y-ness, shallowness, and sensationalism of mainstream news has spurred other niche counter-movements in media. Some Good News with John Krasinski has brought the local global, featuring positive COVID-19 stories of hope, solidarity, and recovery from around the country and the world. He’s married curated, hand-made content contributions with global icon pop-ins, notably Steve Carell and Lin Manuel Miranda. At 16 million views for Episode 1, SGN’s popularity has blown every prime time show out of the water. In effect, channels like SGN are making YouTube more mainstream than ABC or CBS.
2. Everyone will emerge with a new survival skill
All the twenty-somethings of New York have discovered their kitchens, perhaps for the first time, as take-out has become more of a luxury than a norm. “I’m confident we can survive the apocalypse now,” my husband smiled, with a sigh of relief, when our 50-pound flour order arrived from a Queens wholesaler. He made his first-ever homemade bread. I have picked up running and stair climbing in lieu of a gym, and could easily make it to any bridge of the island if needed. All we need now is to take some streaming karate lessons, and we will be ready to kick some zombie butt if a worse kind of outbreak happens.
3. Asthma cases will drop, as the air quality improves with less pollution
Few cars on the road and planes in the air doesn’t just mean we can wander the streets and tarmacs unfettered. It means we can breath deep and feel refreshing, mountaintop-quality air, even in the middle of New York City. This can only be positive for children as they develop. As an urban-dweller who developed chronic rhinitis at a young age, I can’t remember what normal breathing feels like. While some argue impaired smelling is a benefit in New York City, I still hope young New Yorkers today continue to reap the benefits of our reprieve from pollution. In a dream world, we would mandate the sunset of combustion engine vehicles and allow only electric vehicles within city limits. I won’t hold my breath for New York to be the vanguard of new clean air policies, but maybe California can pave the way.
4. Both parties will take the crisis as evidence that their principles are the right ones
In response to the coronavirus crisis, Republicans and Democrats alike have taken refuge in their respective ideologies. Conservative groups have mobilized to demand that the U.S. re-open the economy, while liberals have reminded us that people *are* the economy. The GOP’s economy-before-people stance has led to a temporary demand for big government, but no significant shift in their social safety net policy stances. Democrats, by contrast, consider this crisis as evidence that our safety net policies are already far too weak. While the 2020 election campaigns are essentially on hold for now, I expect to see renewed campaign efforts in the fall that will amount to a battle of ideologies for what we want post-COVID-19 America to look like.
5. Social activism will see a significant jump
This crisis has led to a number of spotlights on companies and institutions reaping concentrated benefits while trying to pass on the pandemic’s costs to the larger populations they serve. WeWork is still charging tenants in cities with shelter-in-place orders. Amazon fired a protesting employee who called out unsafe working conditions following a streak of in-warehouse COVID-19 cases. When the stakes are life and dealth, right and wrong become fairly black-and-white. It also gives people more to fight for. We’re seeing more masses of people taking action. Millions have signed petitions through Change.org, and many more are organizing and making their voices heard. I expect this momentum to continue as the aftershocks of the crisis continue to reverberate.
For better or for worse, this crisis will have a long tail, not just through the presence of the virus, but also in how our society is changed by the crisis. The five trends above are already under way, and will build as we adapt and reshape our social systems in the wake of COVID-19.
In the era of COVID-19, emotional, physical, and financial stress have become inescapable for the foreseeable future. And with every time of hardship, we have a choice about how to respond to it. At least that is the premise of The Upside of Stress: Why Stress is Good for You and How to Get Good at It by Kelly McGonigal, PhD. Her research-based advice can be summed up in 3 simple points:
There are three types of stress responses:
Fight or flight response
Tend and befriend response
You can influence which stress response you experience
Choosing a more helpful response is beneficial in virtually all circumstances
Below is a brief dive into the findings and advice behind each point above.
1. There are three types of stress responses
Stress responses come in three flavors: fight or flight, challenge response, and tend and befriend.
By contrast, the challenge response is a physiological reaction to stress that increases self-confidence, motivates action, and helps you learn from your experience. A challenge response makes you feel focused, not fearful, and creates a sense of flow that allows you to rise to the occasion.
And finally, the tend and befriend response releases stress hormones that increase courage, motivate care-giving, and enhance empathy, leading to strengthened social relationships.
While fight or flight is a self-protective response, the challenge response and tend and befriend response produce more pro-social outcomes.
2. You can influence which stress response you experience
How you think about stress can directly determine how your body processes it. If you perceive stress as a threat, you are more likely to have a fight or flight response, which negatively impacts both your psyche and physiology. Alternatively, if you have an optimistic framing of stress, invoking the challenge response or tend and befriend response, your body will release the types of stress hormones that help you recover and learn.
You can choose to think or act in ways that are known to trigger positive stress responses. Learning a new point of view has been shown to transform the stress response. For example, journalling for five minutes about the hardest experience of your life and what you learned from it that later improved your life can lead to a lasting improvement to life satisfaction and resilience. Specific actions, like volunteering for a charity, can invoke a positive stress response by shifting from self-focus to larger-than-self-focus.
3. Choosing a more helpful response is beneficial in virtually all circumstances
If you harness your stress response to help you engage and grow, over time you can experience “stress inoculation”: your brain will become conditioned to seeing stress as an opportunity to learn. McGonigal has found measurable benefits across social circumstances and psychological states. Adversity creates resilience and correlates with higher satisfaction.
What you can do today
Consider what your narrative about stress is, your behaviors around stress, and how those make you feel. What beliefs can you trade up for ones that give you hope, bravery, resilience, or a sense of connection? Such small shifts in mindset can lead to a cascade of effects. So rather than changing a million things in your life, change your mindset, and the rest will flow.
Can AI help foster cohesive community in an organization? LiiRN thinks so.
Creating a healthy work environment that scales is something of a holy grail for all growing companies. As internal networks become more dispersed and organizational structures grow more complex, it becomes easier for communication disconnects to occur. How can companies continue to cultivate a shared vision and culture, and give employees a chance to define and improve both? LiiRN CEO George Swisher thinks the answer is AI-driven.
Swisher founded LiiRN, a people-centric, AI-powered transformation software, in 2018. The AI platform has a two-fold purpose: to help leaders make decisions based on employee feedback, and then allow employees to participate in enacting those decisions. The LiiRN platform collects customized survey data on leadership performance and company priorities. The AI synthesizes upward feedback, converts it into leadership performance ratings, and identifies quantitative and qualitative trends and findings to inform decision-making. The platform also invites self-nominated change-agents to shape and drive forward company-wide initiatives.
In an interview with Swisher, he shared how AI can drive rather than reduce personal connection, and help business leaders to listen to and lean on their people.
What problem are you solving with LiiRN?
LiiRN aims to help companies drive change through people versus processes. Many leaders working to design strategy end up working with small populations of people, doing surveys or doing stakeholder interviews. But trying to drive a huge change with the input of a small group of people is a disservice to both the firm and the company. People are fearful of change when they don’t understand it. So a few years ago I thought, what if I had the ability as an individual consultant to work with all hundred thousand employees in real time? The impact would be tremendous.
And so the idea was to launch a software that could do that, that could physically touch people as if it was someone you knew and who understood the big program that was going on out there and help the employee relate. When you drive change from the bottom up instead of from the top down, you avoid the education and awareness gaps that come with large scale change.
Companies can use our technology as kind of a middleware between the leadership and staff, to find the gaps between what leadership thinks and what the people on the ground are actually seeing and thinking. Our voting feature makes people feel like they’re part of the decision-making process. If you can do that for a company, say, that’s 100,000 employees, you’re able to help 100,000 employees feel like they’re contributing to a decision that the leadership is making. You get people who are more empowered, and I think that’s a big emotional feature of how you activate people. It automates some of the change management processes and helps leadership make decisions and investments that their company believes in. With ongoing feedback collection, you can create a dynamic feedback loop, to continually shape the change journey.
What are some of the most common pain points the leaders you work with encounter?
New leadership teams are sometimes nervous to listen to data and to draw conclusions if it can be interpreted in multiple different ways. It’s one of the reasons that we have moved to partnering with consulting firms with expertise in software-based data analysis. We use the data to quantify how many people activate and why. Typically, we see north of 30% of the total population raising their hand to be on a work stream in a specific change management area.
If you have lower adoption, we use the data we collect to understand why. We track when people opt out or say “I don’t understand what you’re asking and talking about.” This feedback surfaces whether the real issue is understanding and awareness, versus the willingness of people to participate. Alternatively, the data can also show if people think the initiative is misguided or has implementation risk. Leaders gain transparency through the software’s data analysis.
It sounds like you’ve found ways for AI to create more human interactions. What are the limitations to leaning on AI? In what ways can AI tools be anti-social, and how do you mitigate those risks?
If you’re going to trust the output of our system, you have to know it’s based on the right input. Potential biases to data come in so many different forms. Ideally, if we look at, for example, who is in the sample population that you’re getting information from, we’d account for any skewing as we analyze it. We have limited control, of which population, the stakeholder at the enterprises chooses to invite into our software. So if they choose to only involve the US population and use that information to influence the way they make decisions for their Asia-based population, for example, that clearly creates a lot of challenges, given the cultural differences. We work to screen out and limit bias with some of our onboarding screens and some of the setup and training that we do. We promote as much as we possibly can an approach of widening the sample size, to make sure that you’re involving as large a population as possible that is as diverse as possible. But there’s definitely limitations to it. It’s hard to solve it when you’re collecting what others choose to input.
Also, if there is a high concentration of a certain demographic in a company, we can’t control for who they’ve hired. So if they’re only getting information from a specific group of people that’s the majority of their population, it clearly sways the input that we’re getting and the resulting outcomes. So for us, I think we’re trying to maintain a middle ground where we highlight who companies are asking for input from and how it impacts the output.
We’re focused on making our data inputs more comprehensive by integrating with more internal systems in our upcoming work. HR systems can provide added layers of data, like performance management data and learning data; systems like NetSuite provide more business performance data. The more that we can integrate, the more our machines can learn, and the more we can build better cases for the viability of the decision we’re recommending.
Change management in the context of technology often raises the specter of worker displacement. How can technology-based change management tools like yours help us prepare for an unknown future of work?
What I learned personally moving from a tech-enabled service businesses working with big enterprises to being a full software company is that technology isn’t replacing us. There is a fear of tech advancing too fast. But I think the bigger question is how do we reskill and retrain ourselves? And how will we hold the enterprises of the world responsible for managing change? Even if there are people who will be losing jobs, which is never a good thing, we have the opportunity to say, “Well how do we rethink what workers are doing and what new skills they need to adapt? And how can we help them do that?” Yes, we’ve introduced self checkout into the grocery store. But if we’re going to replace those people, what are the skills they have that we can still benefit from? They may be really great at customer service and customer success — can you retrain them to help people shopping inside the store, to create a personalized experience? Flipping the way that you look at it can help people understand the opportunity. Then we all advance. But a lot of companies don’t think that way when they’re developing or implementing automation technology.
It’s a large number within consumer retail and manufacturing — upwards of 70% of some of the largest companies and employers in the world — whose jobs will be automated away in the next 10 years. The magnitude of that is scary. Unless you retrain people to think about it as an opportunity and change the way that they’re actively pursuing alternatives, we’re going to have problems. Being a coder isn’t the answer for everyone.
There are few companies that manage to define a market, and even fewer that manage to re-define a market. Consider two companies that have turned necessities into luxury products with powerful brand equity: Starbucks and Tesla.
Starbucks developed a masstige product in a previously commoditized category. Morning commuters went from 50 cents Styrofoam cups to $5 shmancy coffees as part of their daily routines. Tesla is carving out a similar growth path by redefining the electric vehicle (EV) market and the automotive industry more broadly. Tesla introduced luxury to a product category previously seen as an R&D experiment. Over the last decade, EVs have gone from virtually non-existent to widespread, with roughly 1.2 million on the road in the U.S. — and a big chunk of those are Teslas. The two companies are on a similar trajectory, and for similar reasons.
The parallel paths of Starbucks and Tesla
Starbucks and Tesla are on track to achieving similar market share in the U.S. Tesla announced in their Q4 earnings call that they expect to sell over 500,000 vehicle in 2020. This 50% bump in year-on-year global fleet growth will position Tesla to gain market share of the U.S. EV market comparable to Starbucks’ share of the U.S. coffee market.
How are these two companies landing in such similar places? It has to do with the two key strategies they share:
Delivering superior user experience
Establishing strong economic moats
With these two cornerstones, both companies are not only leading their categories, but also positioning themselves for long-term success. But don’t take my word for it. Let’s look at the facts and figures that are proving out their strategies.
1. Superior user experience
Starbucks and Tesla have each created superior user experiences that are entwined with their brand identities — in large part because those experiences departed from what was seen as possible in their markets.
Starbucks has defined the category of quality coffee by created a seamless, pleasant customer journey. From app orders to friendly baristas calling your name, the familiarity of a Starbucks PSL has a tug that brings in customers in Hawaiian Septembers. (I speak from experience). Starbucks’ category-defining success has been proven out by their dominance in the premium coffee market. As artisanal “hipster coffee” shops have sprouted up, consumers can find a multi-sensory coffee experience within walking distance in any U.S. urban center. Now I can get oat milk flat whites with a dusting of cinnamon just about anywhere in the Big Apple. Yet even as boutique cafes have emerged across NYC, many people still go to Starbucks, because they are reliable. As an early mover in premium coffee, Starbucks effectively defined what people expect and want.
Similarly, Tesla has shaped what people want in an EV. The Model S was the first to prove that electric vehicles could offer speed and range, creating brand cache and infrastructure that other companies, like GM and Ford, are unlikely to catch up to. Tesla is also positioned to grow brand loyalty because they perform as well as leading sports cars and are easier to maintain, creating an overall better user experience. EVs have fewer moving parts, so less things can break. For example, an Audi A5 costs almost 7x as much to maintain as a Tesla Model 3.
Compelling user experiences for both companies have resulted in significant earned media. Tesla’s sports models have earned the EV spotlight, with the most media notoriety of any car company, despite having zero marketing spend. Starbucks, in a similar vein, has steadily decreased marketing spend over the last decade. They don’t need the marketing, because both brands have become synonymous with their categories.
But what is to stop either company from losing market share to “me too” competitors, I hear you ask? The answer is economic moats.
2. Strong economic moats
An economic moat refers to a business’ ability to maintain competitive advantages that protect its long-term profits and market share from competitors. The critical mass and vertical integration of both Starbucks and Tesla have created operating efficiencies and economies of scale — both significant economic moats.
Starbucks boasts vertical integration from bean to cup. They work directly with nearly 300,000 coffee growers around the world to ensure quality and flavor standards, as well as sustainability. Full vertical integration makes their supply chain less susceptible to disruptions. Its automated supply chain monitoring also enables responsiveness to operational changes — ensuring that their 31,000+ stores globally are never short on supply. With this scale and integration, Starbucks has even left Dunkin’ in the dust.
Tesla is also vertically integrated. They recently doubled down on a piece of the supply chain that will drive (pun intended) the most critical competitive edge an EV can have: battery life. Tesla’s bleeding edge in-house battery technology will soon halve the number of charging station trips needed. These swift advances are likely a result of their Maxwell Technologies and HiBar Systems acquisitions in 2019. In its latest battery patent, Tesla noted that some battery formulas “doubled the number of cycles (or recharges) the battery could take while keeping the same 95 percent capacity retention.”
Tesla customers are willing to pay for this quality guarantee. While other electric vehicle manufacturers worry about losing tax credits, Tesla unit sale remain largely unaffected. Tesla hit their max tax credit qualification of 200,000 vehicle sales in 2018 — but this did not dampen 2019 sales. Tesla remains as dominant in its category as Starbucks is.
What can we learn from Tesla and Starbucks?
Customer experience and quality are huge differentiators in consumer categories with historically low performance.
Raising the customer experience and quality bar for a common product (like transportation or caffeine) can create foundational brand equity and drive market dominance that is hard to displace.
Providing exceptional experience will drive your NPS, and you will have a highly defensible market position.
Economic moats cement the victories of customer loyalty and turn them into sustainable businesses.
Last Sunday, at Delancey and Norfolk in the Lower East Side, an SUV ran over a pedestrian, trapping her underneath the vehicle. A dozen men ran over, gathered around one side, lifted the two ton vehicle, and dragged the victim out. Psychologists would predict that in most instances bystanders would remain just that. Yet the opposite happened here. Why were New Yorkers’ behaviors so counter to predictions?
The Psychology of emergencies
Most emergencies that affect only a single person in a large crowd are subject to bystander effect and aversiveness. Bystander effect, or bystander apathy, is a social psychological claim that individuals are less likely to help a victim when other people are present. In fact, the greater the number of bystanders, the less likely it is that anyone will help. Think of the accident where you wondered if anyone had called 911. Aversiveness is how unpleasant a stimulus is. Psychologists predict that the worse the accident, the more distracting it will be. Think of all the rubbernecking that occurs near traffic accidents. Yet neither bystander effect nor aversiveness occurred in the scenario above. And this may be because of some particular countervailing psychological forces at play.
Why New Yorkers help
A cynic might say that all the good Samaritans in the video where fit young men who were excited that their diligent workout regimen had finally paid off – they had a moment to shine! But I think there was something deeper going on.
I think there is a group cohesiveness that comes with being a New Yorker. We have a silent agreement collectively that we want our city to be full people with hustle and who love the place we live in. If something breaks our flow, we step in to correct it. I’ve been a part of these moments. I watched someone’s moving boxes spill across a crosswalk in a busy downtown intersection. Feeling alarmed for the girl and mildly horrified that these belongings would block rush hour traffic, I rushed to move some to the sidewalk, and everyone around me did the same. The road was cleared before the light turned green, and we all went on our way. Daniel Odescalchi shared similar stories in “The accessibility of NYC hearts: The view from my wheelchair“.
It also isn’t surprising to me that everyone immediately disbursed from the SUV scene, without waiting around for an emergency responder. I suspect that New Yorkers experience less intense emotional arousal in emergencies. We see so much craziness on the streets and subways, that we are more accustomed to disengaging and moving on to what, for most people, is out of the ordinary.
Keep it a secret between you and me, New Yorkers are actually nice. And resilient. We as New Yorkers have a shared sense of what is right that we can all fluidly work towards for our people and our city.
The appeal of companies that have taken over the zeitgeist can sometimes feel like Duffy’s “Mercy” – you get sucked into their orbit, and suddenly find you *like* them, inexplicably, like a trusty companion. Looking back at a decade of big winners, winning product strategies that turn consumers into tribal advocates have common threads that fall into three categories. All can land a company on the map, but only some of have resilience in the face of change. The three strategies are:
1. Think in an ecosystem 2. Define the category 3. Make it more than the ordinary
Think in an ecosystem: Apple, Tesla, and Amazon
Having a good product is, well, good. Having many good products that complement each other with smooth interoperability is even better. That’s ecosystems-thinking: figuring out how to make synergistic products that seamlessly integrate, to drive market domination.
Seamless like Apple
Apple was among the earliest companies to develop a suite of products that talk to each other. From Mac to iPhone to iPad, each could airdrop files to each other and sync your favorite music. Now with Airpods and iWatches, it’s simply a pain for Apple users to add non-Apple devices to the mix. As a consequence, success in one category – the iPhone – begets success in other categories – iPads, Macs, and iWatches. As users become enmeshed, switching costs rise. And as Apple stays cutting-edge in their leading category, there is even less incentive to switch.
Synergistic like Tesla
Tesla takes ecosystems-thinking to the next level, because they are deploying complementary products at massive scale. It started with their electric vehicles (EVs) and Supercharger stations. Next were Powerwalls and solar panels, allowing people to charge their cars at home and also supply their own day-to-day electricity. Most recently Elon Musk broke ground with the Boring Company to start a high-speed underground, EV-only tunnel to circumvent Los Angeles traffic. Tesla’s products are so well integrated and high quality that it will be hard for any competitor to take a piece of Tesla’s pie anytime soon.
Ubiquitous like Amazon
Amazon is not just the “everything store” anymore – they’ve also become the everywhere store. With the acquisition of Whole Foods, Amazon gained 450 stores in 42 states to offer pick-up lockers for Prime Members. Whole Foods has also become an ever-present marketing channel. I am regularly asked at checkout if I’m a Prime Member, and flashed deals for consumer staples as bait. Further, with Prime Video, billboards and subway ads remind me that I can’t watch Season 3 of The Marvelous Mrs. Maisel without Prime. I have a strange sense of “missing out” without a membership. The reach of Amazon’s ecosystem makes me want to join the club!
Creating a full ecosystem is a highly defensible market strategy if you can pull it off. But most companies just have one thing they do very well. And a single concept can drive a winning strategy, as the following two examples show.
Define the category:Uber and Starbucks
One of the biggest signs of market domination is when a company becomes category-defining, providing standard-setting leadership that make it a reference point for any similar enterprise. Most big winners have done this by creating a new market where none existed before.
Ground-breaking like Uber
Uber has changed the way businesses think by creating a market-clearing platform where none had been conceived before. They achieved network effects that set the standard in their category — so much so that people say “let’s get an Uber” even when they mean Lyft here in NYC. Calling your startup the “Uber of X” is universally considered a selling-point. Startups are invoking Uber’s ability to capture first-mover advantage in a scalable, profitable way.
Benchmark-setting like Starbucks
Nowadays, “Let’s find a Starbucks,” is a common refrain in any airport around the world. Starbucks has defined a new minimum quality expected for a coffee, so much so that people are willing to spend $5 on what used to cost 50 cents. By carving out a masstige segment in a previously commoditized category, Starbucks opened the door for artisinal “hipster coffee,” shops, expanding the culture and experience surrounding coffee. Yet even as boutique cafes have emerged across NYC, many people still go to Starbucks! Because they have defined their category. Their first-mover advantage has allowed them to build a permanent association in consumer’s minds with consistent quality.
Of course very few companies can be a first-mover in their category. A few companies this decade have figured out how to be a great late-mover, as the final examples show.
Make it more than the ordinary:Allbirds and Away
Even a commoditized product can be a huge hit — by being more than just a product. Powerful brands can make everyday items feel extraordinary, as Allbirds and Away figured out how to do.
Sustainability with Allbirds
Allbirds came on the market with a message of sustainability at a time when the Paris Climate Agreement had been junked by the U.S. “Buy our comfy sneakers, and you can help save the planet,” was the implicit message. And it seemed to work! A quarter of my office had a pair at one point, and their brick-and-mortar store in the West Village is brimming with shoppers.
Wonder-lust with Away
Away quickly carpeted the NYC subways with images of chic travelers and a simple anecdote that many could identify with: arriving after a long journey with a dead cell phone. Their image of the tech-forward, boundless traveler struck a cord that has left them ahead of many “me-too” suitcases with battery slots.
Winning Big vs. Staying Big
When looking at the decade-defining brands above, they each represent something quintessential about the modern consumer economy and what works. Ecosystems of products are convenient to the point of become part of a lifestyle. Single products can also be powerful by carving out brand-new categories, or by digging down to a purpose beyond the product. My prediction is that the order of the categories above will reflect their. Making an ecosystem creates the stickiest customer relationship. Defining a category also guarantees a long company life, though with low switching-costs. And being more than ordinary will certainly give you a grand entrance to the consumer market, but perhaps not sustainably.