Journal
Thoughts on Strategy and Logic
Yes Dear
Posted August 19th 2010
Author Ty Fujimura
Comments 2 responses
Share Tweet This — Thanks!
I’ve been told more than once that “The secret to a happy marriage is a husband who says ‘Yes, Dear’.”
Really?
We never “Yes, Dear” those we respect. It’s a placation technique, a cheap way to ignore someone without igniting conflict.
People we respect deserve honest engagement, whether you agree or disagree with what they’re saying. They deserve considered, rational response and careful listening. When you respond to someone with intelligence, humility and honesty, they know that you have listened, and therefore that they are important to you.
Companies “Yes, Dear” their customers all the time. Larger firms don’t have much of an option: The size of their businesses necessitate a scalable customer service philosophy, and “Yes, Dear” is really easy to implement. But others have the ability to do things a bit differently.
An architect who okays every client suggestion isn’t likely to build iconic work. A politician who blindly follows the requests of his electorate ultimately fails them.
Good partners in any relationship don’t default to “Yes, dear.” They listen, consider, and respond with the respect their partner deserves.
“Your call is important to us”
Posted August 6th 2010
Author Ty Fujimura
Comments no responses
Share Tweet This — Thanks!
Your customers have a certain amount of trust for you, determined by how much they trusted you at the beginning of the relationship and what you’ve done since. To ruthlessly simplify:
Customer’s level of trust today = Customer’s original level of trust + The change in the customer’s level of trust since the start of the relationship
In other words… T = To + ΔT
Every lie you tell takes away from ΔT. If you tell a customer that their call is important, then leave them on hold for another 20 minutes, ΔT decreases. If you fail to honor a direct promise (“I’m sorry, but there’s nothing I can do about that, sir”) ΔT plummets.
If your company is respected and earns a high level of trust from customers automatically (High To), you can afford a couple hits to ΔT before the customer’s trust goes negative. Start-ups (Low To) are generally more honest because they don’t have that luxury.
To can change quickly. Financial giants with close proximity to the subprime collapse have seen their To go from huge to nonexistent, or even negative. They can no longer afford to spend the customer’s automatic initial trust on opaque account statements or black-box funds. They now have to focus on building ΔT to compensate. They have to work like start-ups, asking for trust instead of taking advantage of it.
Why your URL doesn’t really matter
Posted December 3rd 2009
Author Ty Fujimura
Comments one response
Share Tweet This — Thanks!
When naming products, entrepreneurs often toss good ideas because the .com isn’t available. I think that’s often a mistake.
Yes, the first thing people do to look you up is type www.company.com. But if you aren’t there? They’re not going to disappear. The site that pops up instead is probably irrelevant to them. Almost every browser these days has a search box next to the address bar, and they’ll just use that. As long as you’re at the top of that search, you’ll see very little decrease in traffic because you use companywidgets.com or company.net instead of company.com. A great example is Basecamp (see basecamphq.com), the excellent project management software from 37 Signals.
And the people you do lose along the way? They’re not interested enough to become buyers (or subscribers, or repeat visitors) anyway.
Earthquakes and the Runway
Posted November 24th 2009
Author Ty Fujimura
Comments no responses
Share Tweet This — Thanks!
I have a soft spot for Project Runway, a reality competition between fashion designers. The contestants have the right mix of lunacy, arrogance and phenomenal talent that makes for great TV.
Every episode features a shocking twist. Two dresses! Only 24 hours! You can only use garbage!

Yeah Kenley, trash.
The camera pans over the horrified designers. “Garbage? Really?” they whine. In confessional interviews, they moan some more. “I thought this was a fashion competition, not a trash competition.” Cut to commercial.
I’m always amazed by how few contestants react positively to these earthquakes. They forget that everyone has to adapt to the changed landscape, and their chances may even have improved. Sure, they would be able to make a better dress with cloth than garbage. But who was hit hardest?
New legislation is written. New technology is discovered. War is waged. Earthquakes have and will happen to your industry. If you lose 50% of your production capacity, don’t cry “tragedy!” Find out how you did compared to your competition. Think about the way the market has changed. You may even have come out ahead.
And as always, make it work.
Unique Isn’t Good Enough
Posted November 20th 2009
Author Ty Fujimura
Comments no responses
Share Tweet This — Thanks!
You’re probably the only person with your name reading this column right now. If you aren’t, we can add more conditions to make it so. We’re all unique. Who cares, right? Exactly.
Common marketing wisdom says to “find a Unique Selling Point” for your brand. But uniqueness alone means nothing.
Chevy is “An American Revolution.” But even if their American origin was unique (it’s not), the company is failing to communicate exactly what makes it a good thing. I fear that their lack of specificity is indicative of a company with no selling point, clinging to a reputation long expired.
Many companies tout a level of experience unmatched by their competitors. But longevity is not a good indicator of quality: Many companies survive despite their behavior, not because of it.
A unique selling point is only worth bringing up if it means something to the customer. Don’t just tell them you’re the only American company in your industry, tell them why they should buy American. Don’t just tell them about your “50 years of experience,” tell them how that experience enables you (and you alone) to serve them better. Or cheaper. Or faster. They’ll care about that.
Football Math
Posted November 16th 2009
Author Ty Fujimura
Comments no responses
Share Tweet This — Thanks!
The sports world is buzzing over last night’s thrilling and bizzare game between the Colts and the Patriots. Peyton Manning’s Colts capped an improbable comeback by scoring with just 16 seconds remaining to go ahead by one point.
The headline, though, was about the previous possession, in which Patriots head coach Bill Belichick opted to go for it on 4th-and-2 from his own 28 yard line with 2:08 go rather than punt.
Many analysts claim that Belichick made the wrong decision, that he was blinded by ego, that he made an unspeakable gaffe. Did he?
Let’s look at some rough numbers. We can estimate the probability of making it on 4th-and-2 to be 50%, a common success rate on 2-point conversions. The probability of New England winning if they punt is around 70%. If they go for it and fail, they will win about 50% of the time (Even if Indy scores 60% of the time, the Patriots can come back with a field goal). If they go for it and succeed, the probability of winning is around 95% (This number would be higher if Indy had no time outs left; they had one).
So if they punt, they win about 70% of the time. If they go for it, half the time they will have a 50% chance and half the time they will have a 95% chance. Going for leaves them a 72.5% chance of winning — Slightly better than the punt.
Obviously, these numbers aren’t perfect, and more careful analysis would be necessary to make a conclusion about the decision. But in light of the vitriolic reaction the sports press had, the idea that it was a close-to-even decision is enlightening. These pundits are displaying classic risk aversion: They think it far preferable to go for the orthodox rather than assume variance, even if that risk may give you a better chance to win the game.
Usually, head coaches and other decision-makers will favor the safe, because one is rarely canned for it. Only an uber-confident person with a lifetime tenure, as Belichick has, can feel safe making such a decision. If you’re a few rungs up the ladder, with plenty of suits above you, I don’t advise “going for it” in your business choices, even when a risk gives your organization a better chance to win. But if you’re evaluating the decision of someone under your management, consider your risk tolerance before you make an assessment. A smart decision may look awful, or even reckless, at the time. The wise manager can cut through the noise of public opinion and recognize that.
The Dimmer and the Lightswitch
Posted November 14th 2009
Author Ty Fujimura
Comments one response
Share Tweet This — Thanks!
The quintessential business decision involves a choice between A and B. Pick one, then execute.
These decisions are easy in Econ 101, where choosing which widget to produce in a given factory usually means picking the one with the biggest profit margin. Today’s interconnected, crowded, diverse market demands more creative solutions. Now the decision must account for sustainability, effect on stock price, volatility, and thousands of other factors.
Sometimes the answer lies in the gradient between on and off, the open field of possibility that terrifies square thinkers.
Can we find hidden efficiencies by manufacturing A and B?
What if we sell A in one market and B in others?
What if we buy equipment that can make both at 80% efficiency?
What if we sell the factory to someone who thinks A is more valuable than we do?
What if?
Pawns Can Move Backwards
Posted October 17th 2009
Author Ty Fujimura
Comments no responses
Share Tweet This — Thanks!
The rook darts forward, trapping white’s king behind his own pawns. White surveys her options, and defeat seems imminent.
But the park is windy that day, and a sudden gust sweeps the board clean. “Well then,” she says. “Draw?”
The ability to focus and narrow our thinking is critical. When immersed in that chess game, it’s a waste of brain power to consider the weather, or the pigeons flying overhead. You’re participating in a theoretical game space, represented in the physical world by plastic and stone. You learn the rules of the game and abide by them.
But those laws are not immutable, however much respect we give them. Try telling a toddler that a pawn can’t move backwards — You’ll see quite plainly that it can.
Edison didn’t invent a better candle. He didn’t think about where to move his bishop, or whether to castle. By thinking creatively, he knocked over the board instead.
The Judgment Factor
Posted July 6th 2009
Author Ty Fujimura
Comments 4 responses
Share Tweet This — Thanks!
Imagine: Two strangers play a game. The first, holding ten $1 bills, must divide the cash among the two. The only decision the second can make is whether or not to accept the split. If the answer is no, neither player will walk away with anything, and the $10 is forfeit.
Analyzing this game on the surface level, it is obvious what each player should do. Since the second gains nothing by rejecting an offer, he should always accept. Therefore, the first should offer just $1, knowing that the second must say yes, and she will walk away with his maximum take. Right?
This is the Ultimatum Game, invented in 1982, investigated in 1983, spectacularly relevant in 2009. In experimental trials, researchers found the average offer to be around 37% of the money, far greater than the minuscule percentage predicted. Furthermore, when the offer was less than 30% of the money, it was rejected over half the time.
That means that a significant percentage of players turned down free money, literally.
Any freshman in Econ 101 can tell you that people make decisions based on their own interest. We buy because we feel that what we’re getting is worth the price — in other words, when the cost is less than the sum of the benefits. I pay $100 a month for my trusty iPhone because continuing its service is of greater use to me than the $100. It’s easy to reel off what I’m getting: convenient communication, mobile email access, portable music, a status symbol.
When players reject an Ultimatum Game offer, they are receiving something, something worth the dough they’re leaving on the table. They’re receiving the joy of spite, which can be a valuable prize indeed. Its twin, the joy of benevolence, plays an equally important role. Players who offer a 50/50 split of the money are paying potential dollars for the satisfaction of having chosen the balanced option.
Call it the Judgment Factor: the change in value of a good or option or service derived from the pleasure of punishment or reward. Players considering a $9/$1 split have the opportunity to spite the other player by saying no. When the judgment factor is considered, the player no longer chooses between $1 and $0, but between $1 and $2 (or however much the joy of condemnation is worth to that individual). That difference is the judgment factor, and in business, it can be the difference between life and death.
Consider Whole Foods. Without the goodwill generated by their social efforts and green philosophy, you’d never have heard of them. Their customers are willing to pay a premium, often for products their cheaper competitors carry, because they enjoy helping a company that does what they think companies should do, a company that acts as they think companies should act.
Likewise, companies with negative judgment factors are forced to lower prices, often below the point of profitability.
In the marketplace we must continually assess our judgment factors, the premiums customers are willing to reward us with. Few elements of a consumer’s buying decision are so often overlooked. Every time your company interacts with a customer, directly or indirectly, he’s assessing your performance, preparing to reward or punish you when it comes time to make a decision.
Embrace the judgment factor. Make your customers feel like they’re getting something extra when they buy what you’re selling. You’re constantly being evaluated, from your corporate behavior to your marketing and identity.
The verdict is imminent. Are you ready?

