Category: Big Business

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Regulatory Overkill?

[Excerpted from this month’s From the Editor column at my magazine.]

In last June’s From the Editor page, I wrote about a scandal involving Chinese “innovation,” namely a rip-off that literally involved scraping a western company’s name off of cell-phone chips and painting a Chinese company’s name on them. I received some guff for that editorial, and have been told at numerous conferences in the past year that China will dominate the 21st century, because the world is bowl-shaped or flat or somesuch.

I maintain that the country’s poverty-level population (800 million), out-of-balance birthrates (in the 1990s, some provinces peaked at 32 male births to one female, thanks to advances in portable sonograms), and catastrophic environmental record are going to yield so much unrest as to counter its “economic miracle.” Those of you who’ve had the misfortune of listening to me expound on this subject know that I believe China’s one-party dictatorship makes it impossible for the nation to truly accommodate itself to the western world; instead, it does a passable impression of capitalism. But when it breaks down, it breaks down critically.

Let’s take China’s role in exporting chemicals, a major economic driver. Those exports have made plenty of news lately, after

  1. an ingredient (or two) used by Chinese livestock-food suppliers to falsify protein tests led to the deaths of a number of pets in the U.S., and
  2. a counterfeit ingredient in cough syrup supplied by a Chinese company poisoned at least 100 people n Panama.

These problems don’t only plague China’s exports; the same ingredients have led to deaths within China, too. Perhaps we should envision these as growing pains, a result of China’s crash course in modernizing the SFDA and bringing its drug supply under regulation. If anything, that would mark these events as symptoms of the country’s attempt to join the international community.

That reading might be a valid one, given that the toxic ingredient in the cough syrup happened to be diethylene glycol. After all, the Food, Drug and Cosmetic Act was passed in the U.S. in 1938 after the use of diethylene glycol in “Elixir Sulfanilimide” led to the deaths of more than 100 Americans.

Seventy years ago, there was no requirement for tox-tests for drug formulations. The manufacturer’s lab tested for flavor, appearance and smell, but not toxicity. So this elixir shipped, and the death followed. At the time, the agency was simply fortunate that the product was called an “elixir.” According to an FDA article, if it had been called a “solution” instead, “FDA would have had no legal authority to ensure the recovery of the drug and many more people probably would have died.” As it was, agents had to fan out across the country to help in the recall of the elixir. All told, 234 out of 240 gallons of the toxic product were recovered.

Following the diethylene glycol disaster, the FDA was given greater authority to regulate drugs, and evolved into the agency we know today, for better and worse.

Nowadays, we hold congressional hearings about tougher standards for Advisory Committees. Concerned about conflicts of interest, our representatives debate regulations stipulating that no one who is an expert enough about a subject to get paid for it should be responsible for evaluating it. (Hey, it’s my reductio and I’ll ad absurdam if I want to.)

As it turns out, China — and that one-party system of theirs — has also developed new regulations to deter conflicts of interest. In their case, a court recently ordered the execution of the former head of the SFDA.

In May, Zheng Xiaoyu was convicted of taking more than $832,000 in bribes in cash and gifts during his tenure. According to a state newspaper, “Under his watch, six types of medicine approved were fake and pharmaceutical companies got away with using false documents to apply for approvals.” Oh, and an antibiotic produced under not-so-aseptic conditions looks to have killed at least 10 Chinese patients.

The government has already taken the occasion of the sentencing to announce a new food-recall system; we’ll see how it overhauls the drug process. I’m all for creative destruction, but I’m hoping it won’t take too many more of these episodes before we see China adopt some semblance of global standards. I’m not optimistic about this, of course.

Fortunately for Mr. Xiaoyu, if the method of execution is lethal injection, then there’s always a chance he’ll come out of this experience just fine.

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Style and not

Over the weekend, I read a neat article about the differences between Apple stores and Sony Style stores. One of the funniest comments came after the writer noticed the huge disparity in foot traffic (a lot more people were in the Apple store) in the two stores in a Palo Alto mall:

Last week, I shared these impressions with Dennis Syracuse, senior vice president for Sony Retail, who assured me that Sony’s stores drew an average of 350,000 visitors annually per store. Mr. Syracuse rejected the idea that his store concept could be compared to Apple’s. His stores were conceived, he said, as a “fashion boutique for women and children” that incidentally happened to carry electronics instead of clothing.

We happen to have both stores (it’s actually a mini Apple store, a narrower version of the full-sized stores) in a nearby megamegamall, so I stopped in on both of them while running an errand after work (I took a half-day today; no need to dive right back into the pool, after a stressful couple of weeks and a nice long weekend). At 2:30 p.m. on a Tuesday, what did I find?

(Undersized) Apple store: 19 customers, and 7 or 8 floor staff

Sony Style store: 5 customers (3 of whom were under the age of 12), and 5 floor staff

Now, the Sony store is located among high-end stores, while the Apple store is flanked by Banana Republic and a Nine West, but it was difficult to understand Mr. Syracuse’s vision of a “fashion boutique”. This Sony store was just as overloaded with products and “stuff” as the one Mr. Stross describes in his article: laptops, ebooks, Playstation gear, TVs, stereos, home theaters, and more. According to its own site:

The stores feature several hands-on demonstration areas, including HDTV display walls equipped with high-definition TV sets and DVD players, and a digital imaging gallery with a selection of camcorders, photo printers and digital still cameras as well as VAIO PCs to exhibit connectivity.

As product mix goes, it was a mess: a very well-organized mess, but still a mess insofar as there was nothing linking the products but a Sony logo. Or, as Mr. Stross writes:

But Sony’s offerings have not impressed retail consultants with whom I spoke. Willard Ander, a senior partner at McMillan Doolittle in Chicago, was unsparing in his assessment: “Sony doesn’t get retail. The stores are not energized and not shop-able.” Apple stores extend an “emotional connection” to their customers that Sony’s do not, Mr. Ander said. The absence of such a connection, he said, was a common failing of manufacturers who venture into retail on their own.

In addition to this baffling array of electronics, I think another big problem with the Sony Style setup is that, while the Mac store sells hardware (and accessories), the Sony store splits its focus between hardware and software. That is, it featured numerous product displays and posters for Sony’s music and movies. So the Sony store shows off CDs and DVDs of Sony artists, but I don’t believe there’s brand/label/studio awareness when it comes to most music and movies (Pixar notwithstanding).

In contrast, the Apple store treats content (software) as something the user can go pursue: a poster for the iTunes movie store shows many different properties, but doesn’t limit itself to, say, Disney videos. The store is selling its users the opportunity to pick from a universe of movies and music, not those of one label/studio.

On top of that, there’s plenty to be said for the airy brightness of an Apple store. The floor design, even in a mini-version, is open and easy to navigate. It isn’t selling as much as a Sony store, and it doesn’t have to.

This afternoon, I came across another Apple retail article: this one’s about Dell’s attempts at recapturing market share, including a stab at retail, despite its roots in direct sales. Unfortunately, it sounds a lot like Catherine Keener’s character’s store, We Sell Your Stuff On Ebay, in The 40-Year-Old Virgin:

Earlier this year, Dell opened its first retail store in the NorthPark Center in Dallas, right across the mall from an Apple store. Inexplicably, the Dell store carries no inventory. Customers can check out the goods, but can’t actually buy them in the store. This is the main reason cited for the failure of Gateway’s chain of stores, which shuttered in 2004.

The article also explains that, since design is now important in the PC biz, Dell’s gonna get some designin’ on! It felt a lot like a “let’s buy some innovation!” initiative, and that trick (just about) never works. Usually, it involves overpaying for people who had One Good Idea, and telling them to “be creative.” I’ve seen it.

I don’t mean to blow sunshine up Steve Jobs’ ass, but it is pretty amazing that Apple has managed to make retail work in a field where a lot of other companies have tanked.

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Best Invasion of Privacy

Last week, my Sirius radio went kaput, the result of a frayed wire from the antenna. I was faced with two choices: buy a new antenna ($40) or get a new radio ($139-$149). (The third choice, listening to terrestrial radio, was no option at all.) Given that the existing radio was pretty old and clunky, and had no car-kit (it was sitting a mass of wires above the dashboard), I figured I’d get a new radio.

My first stop was the Radio Shack near my office. It had such misleading price labels that even the clerk who helped me couldn’t understand why the unit was ringing up at $149 instead of the $119 on the display. A manager explained that the tiny letters “MIR” on the wall display meant there was a $30 Mail-In-Rebate, which would get the price down to $119 eventually. I laughed at the manager and left the store.

That evening, I stopped at Best Buy and found the radio, which was listed at $139, with no rebate. The cashier asked me for my phone number. I said, “No, thanks.”

She repeated her question. I told her that I wasn’t going to give Best Buy my phone number. She said that she couldn’t process the transaction without it. “That’s too bad,” I said, and walked for the exit.

The security guard told me to have a good evening. I said, “It would’ve been better if I’d been allowed to buy something just now.” She looked puzzled, and I said, “Can you get me a manager, please?”

She called one over, and I explained what had transpired: “I tried to buy a Sirius unit, and your cashier refused to process it without my phone number.”

“That’s not our policy, sir. That’s policy from Sirius.”

“You are full of shit and your store just lost a $140 purchase,” I told her, before walking out.

That night, I looked up the unit on Circuit City’s website: $149 with a $30 rebate. I called a local store, and asked a rep if they had it in stock. He said they did. Then I asked, “If I come in there to buy it, and I don’t give you a phone number or zip code or anything, is that going to block my purchase?”

“Excuse me?”

“If I don’t want to give out my phone number, are you still able to process the transaction?”

“Sure! We ask for your phone number to help you out,” he said. “If you have a problem with the product and lose the receipt, we can look it up with your phone number.”

“But it’s not mandatory?”

“No.”

I described the episode at Best Buy, and he said, “Seriously? They wouldn’t let you buy it?”

“Nope. So if you’re being straight with me, your store just got my business.”

“Great!”

* * *

All of which leads to a couple of thoughts:

Radio Shack has not shaken my belief that it’s actually a massive cocaine-money-laundering front.

Best Buy’s marketing & data-mining policies are bad news.

Circuit City may be going out of business within a year, but I’ll give them a shot. Also, my laziness has paid off, since they just dropped the price for the unit to $129 today (in addition that $30 rebate).

I really should’ve just bought that Sirius unit on Amazon when mine first broke. It would’ve been a lot less stressful, with a transparent and low price ($118).

Sure, Amazon already has all my buying info, but I figure my purchases there are so chaotic that they’ll never assemble a useful marketing profile for me.

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Ten years down the road

This weekend marked my 10-year anniversary at my company. Our standard celebration calls for the anniversaree (?) to bring in bagels for the office, so I hit the Bagel Train this morning and treated my coworkers to some magic.

Since our lives consist of milestones, this anniversary led me to reflect on my workplace and The Workplace, and how this morning’s Montaigne post was about the inconsistency of our lives, but here I am, 10 years from being hired as an associate editor on a magazine called Happi. The irony, of course, being that I was a depressive at 26 years old. Oh, and that my editor and I were voted most likely to take a sniper rifle to the rooftop.

But that was 10 years ago. We’re both still here, much more at ease with who and where we are. I’ve grown up a ton in that span, but I remain pretty childish about some things.

In general, I don’t like to write about the goings-on at work. I find it interminable when people tell stories about their offices, because those tales are so wrapped up in an intimate knowledge of the people and processes in place. So, if I provide a pretty scant take on what goes on from day to day at work, that doesn’t mean there isn’t a lot to do; it just means that it can be esoteric and would likely bore you.

That doesn’t explain why I persist with those Montaigne posts, but hey.

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Just Half-Ass It

I was sitting in Boston’s South Station for an hour or so last week, and I found myself  transfixed by Reebok’s new ad Run Easy campaign. Huge banners hung above the doors of the train station, bearing slogans that I found a little perplexing:

Run to the beat of your own drummer. Run Easy.

Conversation is fuel. Run Easy.

Enjoy the ride. Run Easy.

Why Hit the Wall? It hurts. Run Easy.

Why run till you can’t walk? Run Easy.

What are you Just Doing? Run Easy.

Congratulations. You can’t stand up. Run Easy.

A 10-minute mile is just as far as a 6-minute mile. Run Easy.

Did you beat your best time or just yourself? Run Easy.

There were a couple of Boston-specific banners:

Big Dig has set the pace. Run Easy Boston.

The British aren’t coming. The British aren’t coming. Run Easy Boston.

As I said, I was transfixed. Isn’t there a reason all sports-related marketing is aspirational? I can understand trying to subvert standard advertising tropes — those Sublymonal ads can be pretty funny — but this just goes beyond the pale. Sure, you don’t want to tell people that they’ll win the Boston Marathon if they buy your sneakers, but telling them that it’s okay to slack off?

In addition to these “Run Easy”s, each banner featured Reebok’s tagline beneath its logo: I Am What I Am. Now, I appreciate coming up with a slogan that puts us all in mind of the Torah and/or the greatest performance-enhancing-substance-abuser next to Barry Bonds, but in tandem with this campaign, it comes off as “Eh. Why bother? Running isn’t going to make me any better.”

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Cause? Effect?

According to ESPN.com, Ricky Williams tested positive for pot again. Obviously, that’s not news. The only reason I’m posting about it is because of this unintentionally funny paragraph from the story:

“Falling off the wagon is part of rehab,” a source said. “Based on the medical evidence in Ricky’s case, the doctors say it’s too early to come back. He had the positive test last month. Remember, he’s been diagnosed with social anxiety disorder — that’s a real disease and a good percentage of those folks self-medicate with substances like marijuana, often at the moment they are about to have a high level of social interaction.”

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The Epically Boring Boston/BIO Post

The trip to Boston for the BIO show was productive; I made some good editorial contacts, was praised for the quality of our magazine, ate at some fine restaurants, and saw a bartender mix a drink with liquid nitrogen. Here’s a slideshow of my BIO pix, and another of my non-BIO Boston pix (including the aforementioned drink).

For the first time, the conference organizers forgot to put me on the press list (we exhibit at the show but, since we’re there as a magazine, I usually end up on the press list), which meant that I didn’t have 10,000 appointments lined up. At least half of these tend to be for

  1. economic development regions that don’t have any industries that overlap with what we cover, and
  2. companies that provide services or components that don’t overlap with what we cover.

So the exhibit hours were less stressful than usual. Sometimes it’s tough for me to keep the “that’s VERY interesting!” vibe going when someone’s discussing an innovative chromatography column. (I’m sure these columns are VERY interesting, but I’m not a scientist, so hey.) Similarly, when a region hits me up for editorial coverage, and I discover that it has zero pharma-manufacturing business, I have to break out the “I really wish we had more coverage of, um, translational genomics, but that’s not really our bailiwick” stuff.

Anyway, the night before the BIO began, my friends Paul & Deb came up from Providence. We meandered along the Liberty Trail for a bit, checked out some Brutarian architecture, then headed over to our restaurant in Quincy Market / Faneuil Hall. Unfortunately, the BIO reception was taking place in the area, so the whole place was under lockdown. We had to wait at a checkpoint, then got handed off to 4 different security guards as we closed in on Wagamama. But the meal was worth it. And our attempt at circumnavigating the security cordon gave us the opportunity to see an Elvis-on-stilts handing out giant sunglasses and plastic Elvis toupees.

As I noted in my Montaigne post on Monday, I got a terrible night’s sleep Sunday, due to a 3-second “bzz!” that occurred every 4 or 5 minutes. All night. I got it taken care of on Monday night, when an engineer came up to the room. He fiddled with the AC for a few minutes, even though I told him it hadn’t been on the night before. Then he heard the “bzz!”, realized it was something in the restaurant upstairs, and ran out to take care of it. No more noise = full night’s sleep.

I knew I would need plenty of caffeine to make it through the exhibit hours Monday, and this sort of conference always has plenty of exhibitors who have baristas making all sorts of coffee. I got by on that during the morning, but true salvation arrived when I began to venture out through the exhibit hall.

See, I may not be a detective, but certain details leap out at me. When I passed an empty booth-space and noticed a Tim Hortons cup sitting on a table, my sleep-dulled mind leapt into action! I knew it could only mean one of two things:

  1. an exhibitor or attendee picked up some Timmy’s from one of the New England outlets, brought it into the show, and discarded it here, or
  2. the Canada pavilion was serving up the best coffee around.

I looked above for the Canada banner, spotted it near the front of the hall, and headed over to the pavilion. I was expecting to find an exhibitor with a little Tim Horton coffee urn or somesuch, but found a full-service coffee-stand, replete with donuts and other insanely good pastries! Not wanting to spoil the client dinner ahead, I only grabbed a coffee. I went back to our booth and told my publisher about the place. He ran out with our dinner guests, and they all returned with donuts, pastries and coffee at 3 in the afternoon.

I was happy, knowing that my breakfast plans for Tuesday were now solidified: blow off the hotel fare and score some of that Timmy’s.

After the first day of the show ended, we took those clients to a great restaurant in the Eliot Hotel in Back Bay: Clio. My publisher & I arrived first and sat at the bar. I was cheered to see a bottle of Hendrick’s (even though I was hoping for Miller’s), and ordered a G&T. Gary ordered a mojito and then asked the bartender what the signature drink was. The bartender proceeded to open up a local magazine and pointed to an inset in a Q&A. It described the Screaming Ginger, which is made with an exotic vodka, green tea, ginger . . . and liquid nitrogen.

Now, I don’t know that it was really liquid nitrogen in the container, but I do know that it froze everything else in the glass instantly (he poured it in first, before adding the other mixed parts), and emitted so much steam that it looked like one of Grandpa Munster’s experiments. How do we know? Because Gary ordered one after his mojito:

IMG_0749.JPG

The bartender, Theo Ford (we asked him for his name in case I decide to include that pic in the BIO wrap-up in the June issue), took out a toothpick to poke the ice at the top of the glass and keep it all from freezing over. The result was a sort of slush/sorbet texture, with a little kick and a nice, subtle green tea taste.

Well, I had to try it! It’s the BIO show! You’ve gotta play with chemistry!

Dinner was fantastic: tuna & salmon appetizer, and two lobster tails for the main course. Gary suffered his usual fate of receiving the smallest portion of anyone at the table who had that order. We’re convinced that waiters think he’s a fat load and do this to him out of the goodness of their hearts. My dessert was a melting chocolate dish, but my neighbor’s was funnier. He & I were bonding over music and The 40-Year-Old Virgin all evening, so we did plenty of goofing on/with his dessert:

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And that was pretty much the night. I got back to my room, fell asleep by 10, and was all bright-eyed and bushy-tailed for the second day of the conference. There’s little to say about that day, except that I subsisted entirely on coffee, apple fritters and maple & pecan danishes from Tim Horton, which I would come to regret. Oh, and the Nebraska pavilion, directly across from our booth, started grilling steaks at 10 a.m., which is a kinda weird time to start smelling steak. That lasted till 5 p.m.

Tuesday night’s dinner was at a fantastic restaurant, Number 9 Park, but was marred because our clients canceled on us at the last minute. Like, “when we were heading there in a cab we got the call from them” last minute. Still, we do as needs must when the devil drives.

(Speaking of which, Boston has the most talkative cab-drivers I’ve ever encountered, hands down. Except for my Wednesday ride to the convention center, every cab ride involved non-stop chatter from the driver. And it’s one thing when the passenger can just grunt to hold up his end of the conversation, but when the driver starts asking essay questions? Please: Get back on your cell phone and complain in a foreign language. And it turns out I wasn’t the only one to notice this; my coworkers and other attendees all made comments about the gabby cabbies.)

Once again, Gary & I reached the site early and parked ourselves at the bar. This time, I was got my Miller’s G&T, which made me a happy boy. Appetizer (no pix in a joint this classy) was Seared La Belle Farms Foie Gras (muscat grape salad, yogurt, candied walnuts), and entree was . . . Slow Cooked Pork Belly (consomme, radishes, braised leeks), because I’m bold like that. And I don’t keep kosher.

My coworkers were scared of my dinner choice, although two of them gave it a shot and admitted that it beat their duck pretty handily. For my part, I said, “How could I look my wife in the eye and tell her that I didn’t try pork belly in a restaurant as fine as this one?”

What followed dinner was a surefire sign of the apocalypse: I was able to find my way back to our hotel on foot. Now, this isn’t a joke about being drunk during a business trip. No, it’s about how Boston is the least sensical city I’ve ever visited. I have never failed to get lost during my trips there, and even when I knew the general direction back to Faneuil Hall, I was convinced that I’d turn a corner at some point and see a sign that read, “Welcome to New Hampshire.”

So it was pretty scary that I was able to manage that walk back from Boston Common. I’m sure the Bostonians in the audience are sneering over my pride at negotiating this short distance, but the absence of a grid is totally disorienting to someone whose idea of a city is Manhattan.

Once again, that was pretty much the night. I got back to my room, fell asleep by 10:30, and was all bright-eyed and bushy-tailed for the last day of the conference.

It was beyond uneventful, except for really esoteric stuff about my magazine. No good anecdotes to share from the show floor, and the Nebraska pavilion was out of steaks (they sent 3 days’ worth to the show, but only 2 days’ worth arrived, so someone was having a tremendous barbecue on Nebraska’s dime). My only imperative was to get out of the show early enough to catch the 3:15 Acela. I was booked on the 4:30, but the exhibit hall closed at 3:00 and I thought I might be able to make it.

Unfortunately, there was a massive line for cabs, so I walked down Summer St. with my suitcase and briefcase. I got to South Station just as the 3:15 Acela was about to leave. I wasn’t able to get my 4:30 ticket exchanged in time (I’ve seen them kick a passenger off), so I killed 75 minutes in South Station, getting a late lunch and sneaking into the Acela Club to goof around on the internet for a while, before boarding the quiet car for the ride home.

I was hoping to get some reading or writing done, but I was unable to focus on anything (it was probably allergy-related). I surrendered, popped in my headphones, and set my iPod to shuffle for 3+ hours. I haven’t done that in a long time, just listening to music and watching the landscape, but that’s where I was.

Near the outset, the train picked up great speed (around 150 mph, I think), which made a blur of the scenery. When we zoomed past parking lots, and the afternoon sun gleamed off the windshields with sharp contrast, I felt like I was watching Trainspotting, or the beginning of Shallow Grave, pounding through the landscape at high speed. It didn’t feel the same in the open areas and fields, but the combination of our velocity and human surroundings somehow tripped me out.

It didn’t last long. Much of the trip was through those empty fields, and most of the civilized areas required that we slow down. Fortunately, the trip had an entertaining conclusion.

See, the Acela stops in Penn Station in NYC for about 10 minutes, before heading out for the second half of its trip. It’s the stop where the most passenger-flux occurs, what with NYC being the center of the world and all.

Anyway, one of the passengers who boarded the quiet car at that stop bore a strong resemblance to Christopher Hitchens. I wasn’t sure it was him, until he walked down the aisle a minute or so later and passed by my seat. I thought, “He’s probably looking for a seat in a less crowded car,” and went back to listening to my music.

A minute later, I thought, “You moron! He’s heading down to the cafe car to buy as much alcohol as possible to last through the trip down to Washington, DC!”

Five minutes later, I was proved correct. He came walking back up the aisle with a cardboard tray containing a couple of drinks. He was stuck by my seat for a moment, because a passenger was restowing a bag. I said, “Excuse me: Mr. Hitchens?”

“Yes?”

“I just wanted to let you know that my wife and I really enjoy your books and essays.”

“Why, thank you,” he said, trying to balance the tray as he headed back to his seat.

Shortly, he headed back down the aisle to another car, carrying some trash. The train would shortly pull into Newark, so I got my bags and waited by the door. He came back up the aisle and re-greeted me, shaking my hand and thanking me for the kind words.

I said, “Actually, it turns out that we have a mutual friend in Elayne Tobin.”

He perked up. “You know Elayne? You’re from Pittsburgh, then?” It was a good guess, since she got her Ph.D. there.

I said, “New Jersey. A mutual friend introduced us. He met her when they were teaching at Temple: Samuel Delany.”

“I think she introduced us once. Science fiction writer?”

“Yes. With a huge white beard.”

“That would definitely be him.”

We talked for a few moments more, until the train pulled in. I wished him a a safe trip, and he told me to give Elayne a pinch on the cheek from him.

“She’d probably take a swing at me if I did that, but I’ll try.”

He smiled, and headed back to his seat.

So that was Boston/BIO, dear readers. Epically boring, as I warned.

(Go check out the slideshows of BIO pix and Boston pix , if’n yer interested.)

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Quote of the Day

From a BusinessWeek interview with Nobel Prize-winning economist Robert Mundell:

Q: Why are the Chinese such huge savers?

A: The large savings comes about through population policy. Historically, Chinese had children as durable goods to provide for retirement. When the one-child policy was introduced, it cut off this form of social security so the Chinese turned to high savings — instead of investing in children, they invested in savings for their old age.