11 Jun 12 People are rational; no they aren’t
What makes (or forces/allows, depending on the situation) a person or a group of people to take an action? What impels (or propels/liberates, again depending on the situation) someone to act a certain way? It’s not always clear. I am fascinated by these questions because often the answer is the right set of incentives.
Two articles crossed my desk* and they show how complex incentives for people really are.
On the one hand, there is a really cool initiative happening over at my alma mater. A piece in the today’s New York Times highlights the work of Balaji Prabhakar, a professor in EE and CS. Essentially Prof. Prabhakar realized that rush hour on Stanford campus was bad. He also realized that “congestion pricing” — that is, charges for driving to peak places during peak hours — is unpopular with drivers, though is a common tactic to fight congestion. So rather than a disincentive from driving at busy times, he developed an incentive structure. You enter a lottery when you drive or park off-peak and can win up to $50. Simple.
It’s brilliant since it cuts down on wasted time, creates less rush hour pollution and is also flexible in how it scales. It’s a brilliant move and from an incentive standpoint, totally logical: people are willing to change their behavior in order to receive a benefit, in this case, money.
On the other hand, an even loftier goal is afoot to help improve obesity and public health in Philadelphia. Context: the US spends $147B treating obesity each year. That’s more than the GDP of New Zealand. Of America’s big cities, Philadelphia has the highest obesity rate and poorest population.
Unfortunately, access to healthy food in a neighborhood has no causal link to improved health outcomes wapo.st/JS4caz
— Christian L. Tom (@cltom) June 12, 2012
The new program to combat this is to turn the local corner grocery into a greengrocery. The city is working with 900+ stores to stock healthy items. To me, this sounds great since it stands to reason that greater access to healthy food (particularly in poorer neighborhoods where it’s not otherwise available) will increase selection of healthy food and increase healthy outcomes. Making it easier to buy healthy food should be a huge incentive to making one and one’s family healthier.
Except not. Emphasis mine:
“In the U.K., we’d started making policy about this before there was any empirical evidence,” says Neil Wrigley, a professor of geography at Southampton University in England, who works on urban planning research. “Time to time, this happens, where you get policies that outstrip the evidence. Then the evidence needs to catch up.”
Wrigley conducted one of the first studies of a food desert intervention, looking at what happened when a grocery store was brought into an underserved part of Leeds, an industrial city in northern England. Of shoppers surveyed, 45 percent switched to the new store. Their habits, however, barely changed: Consumption of fruits and vegetables increased by one-third of a cup per day — about six grapes or two broccoli florets.
“The results came out quite small, a very modest increase in consumption of nutritious foods,” Wrigley says. “It seemed an almost nonexistent improvement.”
Similar research in the United States shows much the same.
There are some good explanations for this. For example, access to food is not also only dependent on proximity to home but also about distance from public transit.
Still, when presented with two options — healthy food and not (selling apples is not mutually exclusive with selling candy) — people often choose the candy, simply because they want the candy.
Maybe the problem is this program in Philadelphia really only removes a barrier without providing a kick. And with the Stanford driving experiment, there is a good catalyst in cash rewards. Still, I look at these articles and I see two behaviors that are trying to be changed. It seems like both could be successful (and both are, after all, just starting so success is not predetermined). I read these excited about them both. And while initial trials at Stanford have gone well, the skepticism by experts regarding the Philadelphia work worries me since it’s rational, it’s too logical.
Note: Also check out the awesome Dan Pink TED talk from a few years ago about extrinsic and intrinsic motivators which I posted to this blog last year.
*proverbially
Tags: apples, Balaji Prabhakar, candy, catalyst, cs, driving, food, food desert, greengrocery, grocery, incentives, obesity, parking, philadelphia, public health, Stanford
09 Jun 12 Some Local Restaurant Favorites
I have lived in the Gramercy/Flatiron/Union Square neighborhood for the past 3 years and I love it. It’s convenient and lively and the nexus of a lot of fun places to eat.
View RT/PS – Gramercy/Flatiron/Union Square in a larger map
I’ve evaluated the top restaurants within a 5-minute walk from my place. How did I decide upon them? They fit in a matrix which I’m calling the RT/PS Matrix™.
It’s a 3×3 grid, thus 9 slots where I’ve managed to fit in 11 restaurants. The RT/PS stands for Rich & Trendy/Poor & Simple since the matrix spans that range (from top-left to bottom-right). Here are all possible combinations:
Sufficiently complex? Here’s the chart for my neighborhood:
The Rich/Poor scale is my inelegant way of denoting how much you should expect to pay. The Trendy/Simple scale is meant to denote how cool the place is and evaluate newness vs. incumbent status, not sophistication of the food (I like all of these places, so it’s not about good/bad restaurants — rather, it’s about price range and mood and your personality). Want to learn more? Excellent, away we go!
- Casa Mono - Grab some small plates, try a bottle of wine and keep them both flowing. This is a great spot and the fresh, creative tidbits from your waiter and sommelier will keep you at a small table in the corner for hours. Or sit at the bar and be enthralled as you watch your food cooked up to order in front of you.
- Craft - The dining room and food are beautiful in their simplicity. Execution defines the dining experience, too. For example, try the sea scallops and be deceived by the sea salt crystals lingering on the top of the perfectly seared pieces.
- Gramercy Tavern - It’s a boringly obvious choice but that’s because it’s the right answer. Do it. If you are feeling Rich & A Bit Less Trendy (and in for an amazing meal), Danny Meyer and friends will take care of you. The crowd skews a bit older (so A Bit Less Trendy) but the restaurant and food are anything but simple.
- Pipa - Pipa is built into ABC on 19th Street and has fun tapas and sangria. Patatas bravas are always good, here they do not fail to please. Mood lighting is provided by ABC Home’s inventory which means everything is, I think, technically purchasable. Regardless, the setting is #romantic and is a great start to a night.
- Eataly - Eataly is a market with 12 different restaurants and counters to choose from. Manzo is a formal dinner while Il Pesce and Le Verdure are more casual (they don’t take reservations) and specialize in fish and vegetarian options, respectively. Walk around the expansive floor and if nothing suits your fancy, head up to the roof to the Birreria, a year-round open air beer garden (with a roof for the winter) with food and drink.
- The House - Another #romantic spot, The House is in a free standing building on 17th Street and has plenty of charm (see picture below).
- Tarallucci E Vino – You’ll find a pretty decor (one friend kept saying she envisioned it as the ideal place for a wedding party) and with fresh pastries and warm drinks, it’s the place to go for a dependable Italian meal with flair. Of the pastas, I’m a big fan of the $16 paccheri with duck sauce and parmigiano reggiano.
- Coffee Shop – This is a coffee shop on Union Square West. It is what is sounds like. That’s what makes it in the “Poor” line. Why the “Trendy” column? It’s well-known that many cute models/actors (male and female) work here as waiters. Get a table outside and do some people watching. Try during the weekend during the boozy brunch hour and you will have fun.
- The Soft Serve Fruit Co. – Fruit, water, cane sugar. It’s like sorbet and it’s really refreshing, with strong and genuine fruit flavors. Plus, it’s vegan and gluten-free. For something more substantial, try one of their smoothies, with flavors such as PPJC: banana soft serve, hot natural peanut butter, chocolate or carob chips, fresh banana & strawberries.
- Dos Toros - Craving some Bay Area taqueria? Grab a chicken plato or burrito made to order, add on all the fixins and take it to Union Square to eat outside in the park. Can’t go wrong with some sour cream and guacamole on there, too.
- Maoz – This is not on the list simply because I needed to fill this box in the matrix. I love all of these places and Maoz is no different. Apparently part of a European chain, Maoz is really more about value than simply “cheap.” Pro Tip: get a falafel sandwich and then take advantage of the free self-serve salad bar with carrots, beets, greens and all the tahini and garlic sauce you could ask for.
- Maialino (RT)
- Shake Shack (PT)
- ABC Kitchen (RT)
Tags: abc home, birreria, burrito, casa mono, coffee shop, craft, danny meyer, dos toros, eataly, falafel, flat iron, food, gramercy, gramercy tavern, il pesce, le verdure, manzo, maoz, models, paccheri, patatas bravas, pipa, poor, restaurants, rich, simple, small plates, soft serve fruit co, tahini, taqueria, Tarallucci E Vino, trendy, union square, wine
12 Dec 11 How SeamlessWeb shows you which neighbors are stingy
Want to know what areas in NYC are Scrooges this Christmas? Visual.ly analyzed more than 3.5M orders on Seamless.com and looked at three things: 1) cuisine ordered 2) tip size 3) neighborhood.
From this, they were able to determine popularity of cuisines and average tip percentages by region of NYC (data includes Manhattan districts plus Brooklyn and Queens).
For example, below is popularity of Chinese food. It’s most popular (on a relative basis) in UWS, Midtown West and Murray Hill — where it makes up 7% of all orders.
But it’s in Queens where people are most generous with Chinese food (again, on a relative basis). The average tip on Chinese food there is 16.28% of the bill compared 11.56% for all cuisines in that borough.
You can dissect this data in a number of fun ways; the Visual.ly team did a great job making this user-friendly). You can also, I’m sure, poke some holes in the findings and talk about variables unaccounted for, etc.
Even so, it’s fun to play with. Amanda Erickson of Atlantic Cities pulled out a fun tidbit:
Wall Street, it turns out, has the worst tippers in Manhattan, averaging just 12.31 percent per meal. Their neighbors in the West Village pay the most – an average of 14.24 percent.
Tags: brooklyn, chinese food, delivery, food, infographic, manhattan, nyc, order, queens, seamless, tipping, tips, visual.ly
18 Mar 11 Missed Opportunity for OpenTable
Last Friday night, I used OpenTable for Android. It’s so easy and very helpful, especially when you’re in an area you don’t know well. Later in the weekend, at #SXSW in Austin (which, sadly, I did not attend), senior folks from StumbleUpon, YouTube and Pandora got on stage for a panel called, “Recommendation Engines: Going Beyond the Social Graph.”
What a missed opportunity for OpenTable.
I don’t mean the event itself. I mean to build out a robust and trustworthy recommendation algorithm of their own.
OpenTable should have one of the best recommendation engines out there. They have insight into not only search and browse behaviors for restaurants but more importantly, they know when you’ve actually eaten there.
Amazon’s reviews are so powerful not just because of their numbers, but because you can verify which reviewers have actually bought the product. We know it because Amazon can verify the purchase and the shipment.
Likewise, OpenTable can verify that someone sat down for their meal. (Note: Yelp tries to do this, too, by incorporating its check-ins. But all that really proves is that I was close by. OpenTable can say for sure that I ate there). It would be really cool if they could reconcile table orders with their reservations to verify even further that I did in fact try the lamb chop, but it’s not that OpenTable suffers from a reputation problem. They suffer simply from a lack-of-effort problem. Perhaps the problem is the incomplete feedback loop with the post-dining experience. OpenTable doesn’t need specific reviews of the restaurant by me, they have all the data that they need.
Moreover, OpenTable knows all about my habits: my price sensitivity, my proclivity to certain neighborhoods or preference of dining time. They can guess what genres of food I like and they can predict even things like where to eat based on where I might be at the time I’m booking for — maybe when booking last minute I prefer one type of restaurant, while planned meals a week out are different to me. There are all sorts of things.
I hope that all these things are on the team’s roadmap — perhaps they are. Think Foursquare but with data you don’t have any reason to question. I think OpenTable is sitting on a lot of really interesting data and they can do a lot in the future with it.
But for now, it’s a big missed opportunity for them.
Tags: algorithms, Android, opentable, recommendation engine, tuscan milk
15 Mar 11 How much is your time worth? NBC gives you a price.
Quick: how much is an hour of your time worth?
NBC thinks you’re about $240 an hour.
To promote their upcoming show “America’s Next Great Restaurant” (which, incidentally, sounded like a cool concept to me), NBC recently ran a very interesting video campaign. NBC partnered with LivingSocial — the Amazon-invested Groupon clone.
After consumers completed their order they were given an option: ”Take 30 seconds to watch the trailer for NBC’s newest show and receive $2 off right now on the deal just purchased!”
Thus, NBC values your time at $2/:30seconds –> $4/minute –> $240/hour. That’s pretty good.
What’s interesting to me is not only their “valuation” of you and your time. What I like about it is the novel and creative way to spend online media dollars.
I can’t be sure, but as I see it there are two ways that LivingSocial and NBC priced this out:
- LivingSocial charged NBC a flat CPM of, say, $15 and then the $2 savings to the consumer was essentially a pass-through. (NBC did a similar promotion last month for buy-one-get-one-free burritos at Chipotle).
- LivingSocial considered NBC like any other vendor/client and charged them a $4 CPC and then took 50%, thus preserving their external-facing pricing model (to either advertisers or merchants), and in turn providing the viewer with a $2 savings.
Either way, looking at other forms of digital video, how does it compare? The best comparison to me would be YouTube’s TrueView model, with the payment method being a Cost Per View (CPV) metric, equivalent to the click-to-play that LivingSocial offered.
In both cases, you pay only for opted-in, engaged views. But CPVs on YouTube are much lower than $4. Despite/because of auction pricing, YouTube paid views are generally an order of magnitude or so lower. And with the LivingSocial deal, the advertiser does not benefit from targeting or reach/scale beyond the sales LivingSocial was able to put together that day. While not a raw deal for NBC, I think there are other, more efficient ways to spend those ad dollars. Granted, not all of them are as splashy (or as I said, as creative).
One question remains about intrinsic and extrinsic motivators — would you be moved to watch the video to save $2? Let me know in the comments. Ultimately, I think the psychological benefits are big here: at the end of the day, I’m getting paid to watch that video.
Tags: amazon, america's next great restaurant, bj fogg, chipotle, cost per view, CPC, CPM, CPV, daniel pink, deals, extrinsic, groupon, intrinsic, livingsocial, nbc, trueview, YouTube
11 May 10 Platonic Conceptions
I’ve been recently thinking a lot about ideals: the ideal job, the ideal girlfriend, the ideal New York City apartment*. Before I get too emo or abstract, I should state that I’m a bit skeptical of Platonic conceptions, of the Gatsby variety (discussed on Various Provocations blog, excerpted on Google Books). I’ll explain in the same manner as I often like to do; I’ll try to weave together a number of otherwise disparate anecdotes. However, the overarching idea here is: it’s hard to cling to a Platonic ideal, and when you do, it can be dangerous to your end goal.
My bundt cake, with the strawberry creation in the background
My first example came from the Mother’s Day dinner my dad and I jointly prepared. I should rephrase that to accurately reflect that I only contributed for the dessert portion of this, but I’d like to think my efforts were respectable. We had a delicious miso Chilean sea bass (fresh fish from here) as well as two desserts: a strawberry shortcake and an orange bundt cake. (This parenthetical is a big tangent, but a worthwhile one: for those of you who are in NYC, I could not more strongly recommend the monthly cake special from Benoit, Alain Ducasse’s midtown bistro. It’s either $20 or $25, with something different each month and each one has been spectacular. We’ve had every month’s since it started in late ’09 and not only are they a steal, but they’re beautiful, and delicious — we’ve seen pumpkin pies, bouches de Noëls, coconut-chocolate ganaches, etc. This month’s was a strawberry shortcake with a very delicate pistachio filling and a thin layer of meringue on top. Fabulous. As for the bundt cake, I actually made that from scratch, see pics here and here, and that was my total contribution to the dinner preparation. It should be noted, however, that my dessert was just as popular as the Benoit cake.).
Anyhow, we had these two desserts. And when the inevitable question of comparison came up, the issue was phrased as a comparison not of each implementation — this strawberry shortcake versus this pound cake — but of their respective Platonic conceptions. Which do you prefer, the world’s best strawberry shortcake or the world’s best orange bundt cake? Earlier in the meal, we ran across a similar problem (this is a family that likes food). When discussing the Peking duck at previous night’s dinner at Chinatown Brasserie, we asked which was preferable when eating 北京烤鸭: the Platonic thin, pancake/tortilla-like wrapper or the Platonic conception of the white, fluffy bao?
Images via Flick
Fair questions, both. Except my uncle pointed out: seeing the world via a binary (or even ternary) lens was inherently limiting: perhaps there is a cake out there which combines the wonders of strawberry flavor, layered whipped cream, with the satisfying weightiness of the pound cake. (Actually, that sounds pretty good.). What about a wrapper, a vehicle for the Peking duck which allowed for the best of the thin wrapping and the flavor-absorbing bao? By pigeonholing yourself, or either of these food dilemmas, into an “either…or” version of the ideal, you miss out entirely on the possibility of a delicious hybrid!
My second example is from the first line of this piece. I have been apartment hunting, and while I knew who my roommates would be (Tweedle-dee and Tweedle-dum) we didn’t have an apartment squared away until recently. It was tough, New York real estate is a tricky business, and dealing with brokers can be no fun. There are plenty of 
fun neighborhoods we liked, but we also wanted to be sure we had a space we liked that was commutable for the three of us. Anyhow, I think we each had in our heads the “perfect apartment.” The apartment in my head was more than just an aspirational, it was a really nice place: plenty of light, too much space, 2.0 bathrooms, marble countertops, super convenient location…I may be a bit hyperbolic here but I had a Platonic conception of the ideal apartment. So did my roommates. And in a real estate world where inventory flies off the shelves faster than Ben & Jerry’s in a heatwave, we acted quickly on an apartment which I’m sure fits in none of our combined Platonic conceptions of a place. The location can’t be beat, and it has a large living room space to entertain. It’ll be home. And we’ll make it a great home. It took us, all of us, to realize how to temper our expectations and put aside whatever ideals we had in our heads.
Now, I don’t have an MBA. And I don’t (currently) run a start-up. So I’m uniquely unqualified to tackle the issue of whether an MBA is a plus or a minus in the start-up world. But I’m going to try and answer, and propose what I think is the best solution. (Hint: it relates to the Platonic form I’ve been writing about so far.).
On the one hand, you have Guy Kawasaki, who proclaimed on Twitter that the MBA was not only of no utility to him as an entrepreneur, but in fact it was a negative. (I’m not sure if I’d even entertain that 
thought…I can understand an MBA being of no positive value, but it’s a different thing entirely to say that it has actively hurt him as a Silicon Valley fixture). On the other hand, you have Vivek Wadwa defending the MBA as “the best investment I’ve ever made.”
Wadwa, who has various appointments at Cal, Duke and Harvard, summarizes Guy’s thoughts as follows:
Kawasaki explained that his issue with MBAs is that they are “taught that the hard part is the analysis and coming up with the insightful solution.” In other words: implementation is easy and analysis is hard. “But this is the opposite of what happens in startups. Implementation is everything in a startup.” Kawasaki believes that MBAs aren’t a good fit for startups, and engineering graduates are.
Wadwa agrees that the average (tech) entrepreneur does not need to know much about pricing assets or about accounting cost flow assumptions, perhaps staples of the MBA program in the U.S. And he’s right. But, Wadwa argues, there is enormous value in learning how to present business ideas, how to integrate teams and how to manage. So why not re-envision the MBA entirely? Why is this piece a back-and-forth between two guys, spitting out jabs 140 characters at a time? Plenty of top schools are looking at reworking their entire programs, given the changing business environment (and perhaps the realization that their model wasn’t best preparing people for business). Maybe, then, there is a time and a place for the Platonic conception. There is a time and a place for the ideal, the imagined.
_*_*_*_*_*_*_*_*_*_*_*_*
* Of the three examples I threw out at the top of this piece, I’ve discussed only the apartment in detail. I’m pretty happy on the other two.
Tags: alain ducasse, apartment, bao, benoit, bundt, cakes, dessert, entrepreneurship, erika, fitzgerald, gatsby, Google, guy kawasaki, mba, mother's day, peking duck, plato, platonic conception, sea bass, startups, techcrunch, union square, vivek wadwa
