Archive for January, 2011
Every October, the United States celebrates Columbus Day (well, maybe “celebrate” in the sense of “ignore”). Though now a controversial figure, the journey of Columbus has much in common with the journey of many innovators. It began with a vision, a dream that he could sail west and reach India to change the world of international trade. Like many inventors and entrepreneurs, his initial dream was wrong, but it did lead him in the right direction for one of the most important discoveries in our history. What many people don’t realize is how long it took him to turn his vision into reality. In 1484, after extensive study and development of his vision, he was determined to sail west and had (incorrect) calculations to back up his plan. But he needed funding for the project. He would spend nearly 8 years pitching his proposal to one European court after another, encountering delays and bureaucrats who slowly evaluated and then repeatedly rejected his proposal.
It’s not clear what kept him going and how he provided for himself during this time, but he persisted. Everything seemed to stand in his way, though. After having pursued all options and having received an absolute and final rejection from the Court of Spain, he was heading away to give France a try again, when he was called back and told that Queen Isabella of Spain, for reasons not known, had decided to support his proposal after all. A lucky break from a powerful ally–the kind of luck that often only comes through years of hard work and persistent evangelizing. The rest of the story, including many risks to be faced and conquered, is well known. Columbus would discover the New World and dramatically change the world.
As an entrepreneur, your initial vision is almost certainly wrong. There may be entire continents between your neatly drafted business plan and your intended destination, but the journey of discovery must begin. You will need funding and perhaps years of persistence. Endurance and vision is needed to get through the early years. Hopefully, you will find success–and may it be success free of controversy.
When I eat at Taco Bell, I usually get chicken, steak, or even just a filling bean burrito, but I have tried the seasoned beef and can confirm that it is beef. I love to cook and naturally prefer my own cooking (and tend toward vegetarian fare these days), but being familiar with ground beef, I suggest that you can look at it, feel it, and taste it to recognize that it’s mostly ground beef. The popular chain, though, faces an expensive class action lawsuit because one woman (actually a team of lawyers in the name of one woman) claims that Taco Bell’s “seasoned beef” does not meet US legal standards. This story is making international headlines and generating a lot of buzz–see, for example, the story at CNN and the Washington Post. In some of the news stories I see, I wonder if anyone has actually read the legal complaint to see where the beef really is in this complaint, available in PDF form at http://www.beasleyallen.com/webfiles/Taco-Bell-Complaint.pdf.
News stories typically state that the suit is about Taco Bell’s seasoned beef having just 35% beef, less than the 40% standard for beef filling. (Some stories even put the 35% claim in their headline.) If so, Taco Bell will have no problem because anyone familiar with ground beef can recognize that Taco Bell’s beef filling is obviously mostly beef, and Taco Bell claims that it is manufactured with 88% beef. (What’s the other 12%? A little water, some oat products, spices, etc., as you can read in the lawsuit or hear explained by Taco Bell’s CEO on YouTube.) But the complaint as filed is not about 35% vs. 40% for beef filling, but over the alleged misuse of the term “seasoned beef” instead of more proper terms such as “beef filling” or “taco filling.” A beef “filling” has to be at least 40% beef, but to call something “seasoned beef” or “seasoned ground beef,” so argues the plaintiff, one has to meet the USDA standard for “ground beef” which means that it cannot have added water, binders, or extenders. So the basis for the suit is not whether lab tests show 35% or 40% beef (it’s obviously well over 50%, in my opinion, unless some rogue Taco Bell shop is watering everything down), but whether Taco Bell is incorrectly marketing their product as “seasoned beef” when it should be “beef filling,” “taco meat filling,” or some other less beefy term.
Some news stories even talk about lab results showing that the filling is only 35% beef. Perhaps this is an additional line being pursued by the law firm, but it’s not in the original complaint.
“Beef filling” vs. “seasoned beef”: that is the basis for claiming that Taco Bell is “immoral, unethical, oppressive, and unscrupulous” and “injurious to consumers.” Even if Taco Bell needs to tweak their marketing lingo, the allegations in the lawsuit seem a bit much.
A larger issue here is the inequity of class action lawsuits which enable the fiction of allowing a team of lawyers to claim to represent millions of people in suing companies for minute offenses. Yes, companies need to comply with the law, but when every successful company suddenly must face numerous shakedowns, each of which can cost millions to defend, it adds to the unnecessary burdens of being in business and creating jobs and real products. If Taco Bell needs to improve their terminology, call the USDA and let them issue penalties and corrective orders. Problem solved. But this is going to be a shakedown for millions. It’s hard for me to see how this is worth millions of dollars of penalties to see that justice is done–defining justice, of course, as paying large amounts of money to lawyers.
The complaint, by the way, is signed by attorney Timothy G. Blood. Interesting surname for a class action lawyer.
Update, Jan. 29, 2011: CNBC has an article about Taco Bell’s forceful response. Turns out that the USDA regulation cited in the lawsuit doesn’t even apply to restaurants. “The USDA’s rules apply to meat processors — the companies Taco Bell buys its meat from. Tyson Foods Inc., the company’s largest meat supplier, said it mixes and cooks the meat at three USDA-inspected plants and that the meat is tested daily to make sure it meets requirements.” That makes the lawsuit all the more ridicuous–and one more example of the many costly fatigue factors that businesses face these days.
During the CoDev 2011 conference in Scottsdale, Arizona, I was impressed with a speech given by a local CEO, John (“Jay”) Rogers of Local Motors in Chandler, Arizona. This small company designs exciting new vehicles using design contests that are open to the public. Their rapidly growing community (12,000 participants so far) contributes designs and feedback to help in the selection of potentially successful concepts that Local Motors will then build locally in a microfactory, with final customization of the appearance being achieved with an environmentally friendly and durable vinyl wrap that eliminates the need for paint and gives the owner freedom to have a unique look. The final assembly is done with hands-on help from the new owner, who becomes intimately familiar with the vehicle and with its maintenance.
I was impressed enough with what I heard that I changed my evening plans to drive down to Chandler and attend an open house at Local Motors hosted by Jay himself. He allowed photography, so below you can see some views of Jay speaking and some shots of his vehicles in various stages of construction. The Rally Fighter that I am standing by sells for $59,000. It’s an incredible rugged, safe, and fun car that is legal on the road but a load of fun off road as well. It’s able to do very nice jumps.
These cars weigh much less than other cars their size, offering a huge bonus in mileage. Great engineering and innovation at many levels makes this possible.
The microfactory concept involves assembly of a small number of vehicles at a time in sustainable, efficient processes.
Do you recognize how much innovation is behind the simple pleasures of life like a carbonated beverage? A great deal of clever physics and science has gone into the subtle innovations that allow us to enjoy these beverages without, say, risking blindness every time we open a bottle of Sprite. In the early days of soda innovation, there was some risk in opening a screw-top container because the pressure was locked in by the interconnected threads until the screw cap came off: then the high pressure in the container could propel the up and away. Packaging engineers tacked the problem, leading to the first big breakthrough described in a 1961 patent, “Gas Escape Closure Cap” by Leo Garvey, US Patent No. 2,990,079. There were other earlier solutions proposed, including more complex venting caps, but the solution of grooves in the threads is elegant. Part of the patent is shown below, where in the lower right-hand corner you can see a drawing showing grooves in the ridges of the threads of a cap that help allow pressurized gas to escape while the bottle is being opened. A variety of later patents build on that theme, with 21 different patent families citing the Garvey patent. Today grooves in the threads of the bottle are also used, as shown, for example, in US Pat. No. 4392055 of Owens Illinois, providing the same kind of safe venting that Garvey sought. (That also reminds us of the need to consider alternative solutions in pursuing patent coverage.)
Gas venting threads are a tiny tweak of the bottle design that many people overlook, but they play an important role. There are numerous subtle innovations in almost every aspect of the soda bottle, from the design of the flange, the materials use to make it, the shape of the foot of the bottle allowing it to stand without the need for a separate stand or ring, the attachment of labels, the design of the cap, and the basic bottle manufacturing process itself. It’s all worth a toast the next time you have a sip. Innovation adds fizz to our daily lives–and safety.
One of the highlights of the past few years for me has been the annual CoDev conference on open innovation sponsored by the Management Roundtable. Top-notch speakers on open innovation and collaboration will speak, sharing their experiences and insights. Speakers from companies like Procter and Gamble, Colgate, Pepsico, General Mills and ConocoPhilips (one of the new companies speaking this year) have much to share. It’s a great venue for networking with many thought leaders and experts. Many of the participants are executives, directors, or managers responsible for collaborative innovation and are the kind of people you ought to know if you or your company care about advancing your approach to innovation.
This year Innovationedge will be conducting a pre-conference workshop on innovation and IP strategy. I hope you’ll be there with us!
The setting is Scottsdale, Arizona, which is the place to be in January. Beautiful region! The conference runs from Jan. 24-26, 2011.
This year I’m especially excited about one of the key-note speakers, my friend Adriano Amaral from Brazil. He was one of the visionary leaders of the government in Brasilia in the past decade who transformed the economy of that state into the strongest economic engine of Brazil. He is a tremendously successful CEO of a for-profit business, POSEAD, and of a non-profit educational organization, CETEB, both of which have transformed education for speakers of Portuguese and Spanish with a remarkably successful business model. He will share some of his story, a tiny part of which I’ve shared previously on this blog. Connecting with this influential leader from Brazil could easily be worth the price of the conference for some of you.