ImaginativePRO Blog

TESLA MOTORS FIRST DAY IPO IS A RESOUNDING SUCCESS

Less than two weeks after thin-film solar panel maker Solyndra Inc. pulled its IPO, Tesla Motors Inc., the seller of electric vehicles, rocked the markets, closing its first day of trading up 41%.

Reuters

Will Solyndra executives ever have the chance to experience this joy?

There are many similarities between the two companies. Both are in the nascent clean technology sector, are losing money, have high capital needs, and received huge loans from the federal government. The two companies have yet to prove that their technology will work long term and that their markets can extend beyond a niche.

So what explains their divergent paths?

“For Tesla what played a big role was having the tangible product. People can get into the car,” said Brian Bolster, managing director at Goldman Sachs, one of the underwriters for both the Tesla offering and the failed Solyndra deal. It’s also the first IPO in the auto industry in more than half a century, adding to the buzz, he added.

“For Solyndra it was a question of value,” said Bolster, in an interview on the sidelines of the Renewable Energy Finance Forum Wall Street on Tuesday in New York. He said that the solar panel maker could have gone public, but not at a value attractive to its current shareholders. The solar market is very different from the auto space, he added.

Solar valuations have dropped precipitously from a high of about $122 billion at the end of 2007 in total to about $42 billion right now, even as the number of solar panel makers increased, according to data from Jefferies Inc. Solyndra had to compete in that market.

For investors in Tesla, there are very few other options to play the electric vehicle space.

Something else that helped Tesla was having major strategic investments from Daimler Chrysler and a commitment from Toyota, said Kevin Genieser, managing director at Morgan Stanley, which also was an underwriter for both Tesla and Solyndra deals.

“Is [Tesla] a one-off or the first in a new wave?” asked Genieser during a panel discussion at the conference, organized by American Council On Renewable Energy and Euromoney Energy Events. “I do think it says that higher quality companies that can capture the imagination of the public can go public,” he said. Genieser added that mergers may be the more viable option for some other companies and that Morgan Stanley is talking to some clients currently about that route.

In the case of Solyndra, which needs hundreds of millions more dollars to build out its manufacturing, its backers have large pockets, like the Walton family, via Madrone Capital Partners, which took care of First Solar Inc. for a number of years before this now high-flyer of the industry got to the public markets.

Despite all the excitement that Tesla investors exhibited today, it’s a highly risky play. For starters, the company needs to increase customer interest beyond those front-liners eager to get the first trendy thing at a high price. As of the end of March the company had sold just 1,063 Roadsters, the $109,000 sports car, along with unfilled reservations for 110 more.

Interest for its future, cheaper Model S sedan is higher - there were 2,200 reservations for the sedan. But that car is still in its prototype phase. Tesla still needs to build a manufacturing plant, broaden its retail stores, which number just 12, and prove that it can build and sell the car profitably.

Tesla has already promised to sell it for $57,000 before a tax credit, yet in its S-1 filing it says it doesn’t yet know how much it will cost the company to produce the car. “We have not completed the design, component sourcing or manufacturing process for the Model S, so it is difficult to forecast its eventual cost, manufacturability or quality,” the company said in its IPO filing.

Further, while there are no publicly traded pure electric vehicle purveyors, competition is fierce as companies try to bring their cars to the market. Besides privately held competitors like Coda Automotive Inc., two giant automakers, Nissan and General Motors, are working on their own electric vehicles due for release next year and at a cheaper selling price than the Model S. By the time Tesla wants to sell its sedan at high volumes in 2012, customers will have more choices than they do now.

COMMENTARY:  When I logged on to the NASDAQ website to obtain a stock quote for Tesla Motors (NASDAQ: TSLA) yesterday, the quote page for Tesla displayed NO ACTIVITY, and I assumed, due to the big down day in the overall stock market (DOW down 268 points yesterday), that Tesla Motors had pulled their IPO.  Boy, was I wrong.

Looks like everybody made money on the stock.  From its opening day price of $17.54 per shore, Tesla stock's closed at $23.89, a 41% increase.  Not bad for one day.   I just check the chart this morning at 8:39 a.m. (PST), and the stock price now $29.80 per share, and increase of $6.27 per share or +26.25%. 

Goldman Sachs the lead Tesla stock underwriter did a masterful job of hype and buzz and everybody is having a great payday.  Perception is greater than reality.  Tesla has lost over $100 million over two years, and sales of their EV's were only 126 in the first quarter 2010.  I reported this on my blog yesterday, and also thought that their IPO would bomb.  Man, was I wrong.  Wish I had bought in. 

Courtesy of an article dated June 29, 2010 appearing in The Wall Street Journal's Venture Capital Dispatch

    

ENTHUSIASM AMONG APPLE IPAD EARLY ADOPTERS IS HIGH, BUT MARKETING BUZZ IS WANING

Apple's iPad has had tremendous success among Apple enthusiasts and early adopters, but many consumers beyond that seem to be waiting to see what all the fuss is about.

According to a survey of 1,600 consumers (500 of whom were already iPad owners), YouGov.com found only 7% said they had an interest in purchasing an iPad. A similar percentage said they had an interest in buying a tablet built on Google's Android operating system.

"A lot of the people who have bought [the iPad] are tech enthusiasts and Apple loyalists," Katy Mogal, senior vice president of YouGov tells Marketing Daily. "There's definitely room for someone to come in if they offer something different."

Of those who have already purchased an iPad, 90% already own one Apple product and more than half of them own two, according to the survey. And while those owners are mostly satisfied with their purchases, they aren't really generating any more buzz than for other products; 80% are talking about the products with their peers, and 69% say they would recommend one to a friend.

Both of those percentages are about on par with Android-powered devices and lagging behind the Kindle and the iPhone 3GS.

That lack of buzz may be keeping non-owners from pulling the trigger on a purchase. According to the survey, 41% of non-iPad owners said their biggest barrier to purchase was not knowing what they would use it for. Eighteen percent said they were waiting to see what other brands came out before buying it.

Those who own the device are generally using it for content consumption. According to the survey, 70% of owners are using it to read e-Books, while two-thirds are using it to surf the Web and about 40% are using it to watch television and movies. Only 18% are using the tablet for business applications.

"It's still a niche product; it's constrained to being a media consumption device," Mogal says. "If it can become more of a productivity device, it can really threaten netbooks -- and to some extent, notebooks."

COMMENTARY:  I have always contended since the Apple iPad was released three months ago, that the iPad was a "nice to have" type of product.   I assumed that hardcore Apple evangelists would be the first adopters, and this has proven to be the case.

In spite of the recent announcement that Apple has sold 3 million iPads in the first 80 days, which is quite an impressive number, you have to wonder if Apple will be able to sustain those kind of numbers over the balance of the year.  Not very likely, because this would forecast out to something like 12 million units by the end of 2010.

Steve Jobs originally said that he thought he could sell 10 million iPads, but many analysts scoffed at that prediction.  The adoption issue from non-Apple computer and smartphone users is still very strong.  Many are wondering what they would use the product for?  

The marketing buzz has definitely waned since the iPad was first introduced. YouGov.com's survey bears this out with only 7% of the individuals being polled saying they were interested in buying a iPad.  To date, I have seen only three iPads, and this leaves me wondering who owns one, and why haven't I seen more of them if they are such a hot product.   

I think there are a lot of other tablet computer choices, expecially from HP, Sony, Dell, Amazon (coming soon) and others that are based o the Windows 7 Mobile operating system or Android OS from Google.  Switching costs are also high, since users want to use an iPad as a productivity tool using Windows-based software products, something you cannot do.  All software apps for the iPad are designed around the iPhone touchscreen OS.  Windows users are not going to be easy to convert unless switching costs are very low.

Having said this, Steve Jobs is still the innovative product picker and visionary, and Apple has some of the best marketing minds around.  However, Apple needs to keep the product hype and buzz high, spend more on marketing, and making improvements in the product that makes migration from Windows to Apple OS easier and less costly.

Courtesy of an article dated June 29, 2010 appearing in MediaPost Publications Marketing Daily

 

 

TESLA MOTORS' (NASDAQ: TSLA) IPO GETS OKAY TO SELL 13.3 MILLION SHARES AT $17 PER SHARE TODAY

Wall Street has given Tesla Motors Inc. the green light to hold its initial public offering Tuesday, after the unprofitable electric-car company’s underwriters priced the deal above expectations.

Tesla Motors

Tesla’s Roadster electric-car is as deep red as the company’s bottom line.

Tesla and some of its shareholders sold a total of 13.3 million shares at $17, higher than price talk of $14 to $16 in an already beefed-up offering. The deal gives Tesla $202 million in proceeds, which the company expects to use to develop its next vehicle called the Model S, build a manufacturing facility and fund the expansion of its retail stores. The offering, the first by a U.S. automaker since Ford Motor Co.’s IPO in 1956, also immediately values Telsa at $1.33 billion.

Selling shareholders included co-founder and CEO Elon Musk, who sorely needed cash after recently admitting in a divorce proceeding that he went broke and lives off loans from his friends. His sale of 909,212 shares scored him $15.3 million. That’s still lower than the roughly $70 million he has invested in the company from the money he made selling his first two companies, PayPal Inc. Zip2 Corp.

Venture firm VantagePont Venture Partners also sold $4.1 million worth of shares in the offering, but it still owns a stake valued at $121.2 million.

While Wall Street warmed up to Tesla, the question is how the public will receive a company that has yet to make a profit since its founding in 2003. Its loss in the first quarter rose to $29.5 million from $16 million a year ago, as it continues to rack up expenses associated with selling its first vehicle, the $109,000 Roadster sports car.

With just under 1,100 of its all-electric sports cars on the road by the end of March, the appeal of Tesla’s initial public offering of stock has a lot to do with the novelty of its product, as well as the promise of higher sales volumes from a less-expensive sedan model in the future. In November, Advertising Age named Tesla one of America’s 50 “hottest brands,” although the company hasn’t engaged in widespread marketing.

“This is the first time in my lifetime I’m watching an American car company be formed instead of disappearing,” said Ben Holmes, president of IPO research firm Morningnotes.com. “It’s a first mover in a brand-new industry.”

There is no doubt that a lot of Americans would love to own a Tesla, if they could afford it; but there is a good argument against shelling out the money for its IPO. While the shares will have some vanity appeal for car aficionados, the risks for the company are high and any rewards are at least several years out.

Although it does have a product on the market, Tesla still is essentially a start-up company in a new niche of the auto industry. Electric cars are seen as an emerging technology, but it could take a decade or more for the technology to become established.

Tesla introduced its first car, the Roadster, in 2008, then a second version last year. It plans to introduce a Model S sedan in 2012, with the goal of producing about 20,000 cars a year with a price tag of $57,400. Longer term, Tesla is looking to make the Model S a template for mass-produced electric cars, including a line at an even lower price point.

The car maker recently has taken its first steps toward setting up Model S production. Last month, it agreed to acquire a manufacturing facility in Fremont, Calif., for car production. It then announced plans to cooperate with Toyota Motor Corp. on the development of electric vehicles, and for Tesla to receive Toyota’s support with sourcing parts and production and engineering expertise for the Model S, although no written agreements have been inked to that effect.

It has signed a private-placement agreement for Toyota to buy $50 million of its shares at the IPO price, another vote of confidence for Tesla; Daimler AG, through its affiliate Blackstar Investco LLC, has a stake of 9.6% prior to the offering.

The company’s future profitability depends upon larger volume production of the Model S, for which it is still designing and sourcing parts. Tesla is forecasting an increase in losses and a decrease in auto sales prior to the Model S’s release, so a lot is riding on the car company to execute its plans on time.

“They’re trying to sell this as a tech company, but it’s still a car,” said John Fitzgibbon, president of IPO rating firm IPOScoop.com, who has reservations about the company’s financial performance but believes the IPO will perform well. “It’s still a ways from a touchdown; they need to be producing a sufficient number of cars in order to generate net income.”

COMMENTARY:  Tesla Motors (NASDAQ: TSLA) could not have selected a worst day to launch their IPO than today, worries of global economic troubles stemming from the G-20 Conference in Toronto and the home front. 

The underwriters did a masterful job of hyping Tesla Motors stock in advance of the sale of the 13.3 million shares scheduled on the NASDAQ for today.  The original price range was announced in the $14-$16 per share range, but the hype and buzz created by those spinmeister underwriters was so strong, that the underwriters starting the asking price at $17.00 per share.  Greed begets more greed.  

I just checked the NASDAQ board and there is NO ACTIVITY for Tesla stock, and not a wimper of news whether the IPO went on schedule or pulled due to the overall drop in the DOW and NASDAQ stock prices at the start of the opening.  I also checked the Tesla Motors website, and I see no press release regarding the results of their IPO sales.  Nothing, not a thing..

I am beginning to suspect that the underwriters pulled Tesla Motors stock in order to avoid an embarassment if the stock went drastically below the $17.00 per share asking price due to the drop in the overall market.   

I have never been that excited about a Tesla Motors IPO when it was first announced that the company had filed their S-1 with the SEC.   It was also reported by GreenTechMedia that sales of their electric cars plummeted drastically during the 1st quarter 2010 (see my blog post).  Tesla Motors has been running sizeable losses for the last two years, and with their drop in units sold, you cannot have a worst combination for an IPO.

CEO Leon Musk and VantagePoint Ventures both sold their shares to the underwriters in advance of the public IPO.  Whew!!.  Musk netted $15.3 million, not bad for a CEO of a startup just over two years old.  Has the stock buying public gone mad?   If there is a public sale, I have a feeling it is going to be, well let's just say, not so good.

Courtesy of an article dated June 29, 2010 appearing in The Wall Street Journal's Venture Capital Dispatch blog

RUMOR: IS GOOGLE LAUNCHING ITS OWN FACEBOOK-LIKE SOCIAL NETWORKING SITE?

Those rumors about Google's Facebook-rivaling social network just got a whole lot more interesting. A former Facebook exec has been quizzing contacts inside Google and discovered that it's all real, with large numbers of Google staff busy on task.

The leak comes from Adam D'Angelo, cofounder of Quora (a cloud-sourced community question-answer forum), and it's interesting as he was formerly chief technology officer at Facebook. Given the size and complexity of Facebook's operations, this was no small job, and probably places D'Angelo on the contacts directory of a significant number of colleagues in competing high-tech businesses. In other words, when D'Angelo says he spoke to "reliable sources," we're inclined to believe him.

Digg's founder Kevin Rose was responsible for the first part of the rumor, and it piqued D'Angelo's interest enough that he did some of his own digging--turning up some data from his inside sources. He learned that it's "not a rumor" and there are a "large number" of folks inside Google working on it, and this news is convincing enough that he's "completely confident" about its veracity. Unlike other projects inside Google, "this is a high priority" one.

While interesting, these points don't necessarily teach us anything new about the project. But D'Angelo also learned that Google really feels it dropped the ball on the whole social networking phenomenon, particularly where it concerns Facebook. "They had assumed Facebook's growth would slow as it grew, and that Facebook wouldn't be able to have too much leverage over them, but then it just didn't stop, and now they are really scared" is the most telling phrase, because it implies naivety about several aspects of the world inside Google's management. Firstly, by the very nature of social networking it's a phenomenon that tends to grow virally--the more people on Facebook, the more people get attracted to Facebook since more of their friends are already there: For Google's team to not understand this is surprising (and possibly explains the weak success of Google Buzz). There's also a hint in here that Google's management doesn't have a good grip on how people are interacting socially on the Web, and that they underestimated how people liked the friendly interactivity offered by Facebook--another indication why Buzz, with its slightly obfuscating interface, isn't as much of a success as it could be.

Essentially, it seems that Google's management had assumed that Google Buzz would leverage off Google's enormous reach online, and its brand name, and easily compete with Facebook. This proved such a disastrously bad move that the new Google social net will actually be modeled "off Facebook." While we don't know exactly what this means, we can guess that Google may be intending to emulate Facebook's interface more than the way the site's social interaction tricks work, since Buzz was actually an attempt to do this.

COMMENTARY:  I like rumors, especially if they involve Google, the "Do No Evil" search engine behemoth that is out to conquer the world of smartphones (Android), digitized books (Google Books), mapping (Google Maps and Google Earth), image (Picasa) and video sharing (YouTube), 3D Modeling (SketchUp ), translation (Google Translate)email (GMail), office document creation and sharing (Google Docs), web analytics (Google Analytics) , Blogging (Blogger), and they are also rapidly moving into "the cloud".   Oh, I forgot, Google also developed their own smartphone, the Nexus One, which bombed and was taken off the market.  I probably missed some, and I apologize.

Now we hear about this rumor that Google is moving into the world of online social networking, taking on the big cahuna Facebook, and this would not surprise me.  I recently read that Facebook was going to launch their own search engine, and this must've sent alarms bells ringing and flashing red lights throughout Google headquarters, and waking up Larry Page and Sergey Brin out of bed in the middle of the night. What a scene that must be.

I don't now if Google knows this, but Facebook has won the social networking wars and no one is going to challenge them on their turf.  Facebook has all the bases covered from location-based to Facebook apps of every type imaginable.  Facebook tried to take on Twitter and failed miserably.  Zuck, the Redhead, learned his lesson.  I don't think Zuck has much to fear from Google. 

It seems that Google management is imagining dark ominous figures in the middle of the night and have to react to every attempt to overtake their world of search and all those services they offer.  I don't think Google has anything to fear.  BING tried to present a search engine threat, and the Google boys paniced because the BING challenged worked for a while, but Google is still the dominant search engine out there by far. 

I really do hope that Google enters the social networking arena because this fuels my hunger to blog about them.  They tried their hand at microblogging with their failed Buzz, and Twitter killed them.   The same thing is going to happen if they do something stupid like launching their own online social networking site.  It will end in utter failure, and Eric Schmidt and the Google founders Larry and Sergey will have looked like clowns at such a futile attempt.  I look forward to it, because I love Google.  Not.

Courtesy of an article dated June 29, 2010 appearing in Fast Company 

APPLE SELLS 1.7 MILLION NEW IPHONE 4'S IN ONLY THREE DAYS SINCE THEY STARTED SELLING THEM

Judging by early sales figures, Apple hasn't lost any of its mobile momentum with the launch of iPhone 4. On the contrary, the tech giant moved a cool 1.7 million units in three days. So what does this mean for Apple and its mobile rivals?

"It's not as fast a sales rate as some analysts predicted but still represents huge successes in the face of controversy over its design," writes Fast Company. Some analysts apparently predicted Apple selling (1.5 million iPhone 4's on day one).

"An impressive showing, particularly considering it took Apple 72 days to sell 1 million of the first iPhone in 2007,"  concludes Digital Daily.

"To put the numbers in historical perspective, in 2008, Apple sold 1 million iPhone 3G devices within the same time frame (3 days) as the iPhone 4," writes ReadWriteWeb. "Last year, the company again sold 1 million of the 3GS model iPhones during its opening weekend. iPads, on the other hand, took a little longer to reach the million mark: 28 days, to be precise."

"That's crazy," Information Week said of the strong iPhone 4 sales. "Given the large crowds that lined up for Apple's latest handset on June 24, it's not too much of a surprise that Apple sold so many."

"Oddly enough, it's also the launch that seems to have had the most technical issues as well, given the antenna reception problems Apple confirmed both officially and unofficially last week," notes ReadWriteWeb.

Indeed, "What's missing in the press release [that Apple just released touting iPhone 4 sales] is any mention of the controversy that appears to be building about the phone's technical design," adds Fast Company. Bigger picture, "The iPhone 4 has once again re-defined the smartphone landscape," according to GigaOm. "Witness Apple's competitors: they are introducing feature packed, big screen devices that are powered by beefy processors."

Last week, for one, Motorola, Verizon and Google jointly announced the new Motorola Droid X. Now, T-Mobile is launching Samsung Vibrant -- which runs Google's Android 2.1 -- and which comes bundled with Amazon Kindle. Will it be iPod redux, where all the MP3-player wannabes in the world couldn't make a dent in Apple's dominance? asks Malik.

COMMENTARY:  Very impressive indeed.  Jobs must be dancing and clicking his heels through Apple's corporate headquarters in Cupertino, employees are doing their darnest to get out of his way for fear of being "steved".

I have never seen a company with two monumental hits on its hands--the iPad and iPhone 4.   Both producing sales numbers that may never be broken.  Yet, as of today, I have seen only three iPads.   Where the hell are all those iPads sold to date at?   So far, have ot seen the new iPhone 4 either.  

Am I looney or what, somebody tell me you bought Apple's "magical" new tablet, the iPad and that super-thin iPhone 4.  Take a pic, smiling demonly, using your new Apple devices, and then attaching that pic to an email email addressed to me.

Courtesy of an article dated June 28, 2010 appearing in MediaPost Publications Around The Net

SOCIAL NETWORK ADVERTISING REVENUES TO GROW TO $7.5 BILLION IN 2010 SAYS BORREL ASSOCIATES

Social network advertising clearly has a bright future, and the prospects for future growth were confirmed by a new forecast from Borrell Associates, which predicts massive growth in ad revenues this year. My only question is: Where is this ad spending going to happen?

Overall the Borrell report, "The Social Networking Explosion: Ad Revenue Outlook" has social network ad spending increasing 68% from $4 billion in 2009 to $7.5 billion in 2010, then continuing to grow every year to about $38 billion in 2015. The 2015 figure will represent approximately a third of all U.S. online marketing spending. According to Borrell, 2009 ad spending was divided roughly equally between national brands, while half came from local advertisers. Meanwhile, approximately a quarter of the spending actually goes to promotions, not advertising.

For all these caveats, however, I'm still at a loss to figure out where the majority of the dollars are coming from, and where they are going to; I'm also not sure how to make the Borrell figures line up with other (much lower) estimates of social network ad spending.

For example, a report from eMarketer released in December 2009 estimated social network ad revenues in 2009 at $2.2 billion, a little over half the Borrell estimate. Even factoring in another third for the additional dollars which Borrell says go to promotions, that still comes to just $2.9 billion -- meaning there's over $1 billion missing. While that might be a rounding error for, say, the U.S. budget, it's a lot compared to the relatively small spending base of this young, growing medium.

Moreover, I have to wonder which social networks account for the current spending, as well as for the projected future growth. Here are a few 2010 revenue forecasts for Facebook, MySpace and Twitter:  

• Facebook - According to Facebook CEO Mark Zuckerberg, Facebook might make $1 billion in 2010, up from about $800 million in 2009.
• MySpace - The separate (December 2009) figures from eMarketer have MySpace revenues at $465 million in 2009, decreasing 23% to $360 million in 2010.
• Twitter - Twitter execs forecast $140 million in ad revenue in 2010, while Classmates.com had about $80 million in ad revenue in 2009 and is on course for similar performance in 2010.

All that adds up to about $1.35 billion in 2009 and $1.58 billion in 2010; depending on which estimate you are using -- Borrell or eMarketer -- that means there was somewhere between $850 million and $2.65 billion which went to other networks in 2009, and almost $6 billion going to other networks in 2010 (per Borrell). Understanding the peril of combining figures from different sources, and acknowledging that there are probably a number of smaller networks adding incremental ad revenues, I'm still at a loss to make the estimates even come close to adding up.

COMMENTARY:  I am very impressed with Borrel's social networking advertising forecast, but have to wonder just how effective social media is going to be when compared to regular online and traditional advertising.   The kinks still have to be worked out, and brands first have to find a way to effectively engage with them in order to make social media an effective alternative. 

If the above 2010 revenue forecasts for Facebook, MySpace and Twitter, the big three social online networks, are correct, this certainly bodes well for social media.  Facebook and Twitter will benefit the most at the expense of MySpace which is on the decline and announced a huge 30% layoff in staff earlier this year.  Driving the growth in social media is mobile technology like table computers (iPad, HP) and just about every smartphone out there.

Courtesy of an article dated June 28, 2010 appearing in MediaPost Publications The Social Graf       

 

NEW YORK'S EIGHT O'CLOCK COFFEE RUNS "PEOPLE ARE TALKING" PROMOTION, GIVING AWAY FREE IPADS

Eight O'Clock Coffee is giving commuters in New York City a chance to win prizes if they phone a friend about the brand.

On June 28, commuters passing through Grand Central Terminal will have a unique opportunity to put in a good word about the great taste of Eight O'Clock Coffee -- and a chance to win one of eight iPads and other prizes throughout the day.

More than 13,000 cups of the coffee will be made available to travelers passing through the station, and those who phone a friend on the spot and tell them about the coffee's great taste will have the opportunity to appear online for the venerable brand.

The event, dubbed "People are Talking," will take place from 7 a.m. to 7 p.m. in Vanderbilt Hall, the iconic 42nd Street entrance to Grand Central. The FRESH 102.7 street team will also be on hand broadcasting music and distributing an array of prizes. About 125,000 commuters pass through the terminal every day.

The coffee brand sold over 436 million more cups of coffee last year than the year before.

Consumers can engage with the brand at www.EightOClock.com, on Twitter by following @8oclockcoffee and by becoming a fan at www.facebook.com/EightOClockCoffee.

The brand currently is running a promotion on its home page where consumers can upload a photo and explain why they love Eight O'Clock Coffee. Those selected to appear on the home page are awarded a free bag of coffee. The offer ends Sept. 30.

COMMENTARY:  It will be very interesting to see how many Eight O'Clock Coffee customers make that call.  I like the viral possibilities from this kind of WOM promotion. The possibility of winning a free Apple iPad is bound to create interest.  I have never been at Grand Central Station, but would like to visit someday, and try a cup of freshly brewed Eight O'CLock Coffee.  I have already have my caffein quota for the day at Panera Bread, one of my favorite hangouts. 

Courtesy of an article dated June 28, 2010 appearing in MediaPost Publications Marketing Daily  

SMARTPEN STARTUP LIVESCRIBE RAISES AN ADDITIONAL $30 MILLION IN VENTURE CAPITAL

Livescribe Inc.’s Founder and Chief Executive Jim Marggraff calls himself a “serial inventor” rather than a serial entrepreneur. His career is already marked with big hits, but the radical digital pen his company has developed is the creation he says he’s been most excited about.

Marggraff told VentureWire the company is piling on an additional $30 million in funding to establish his most recent invention as more than a nifty gadget, but rather a new computing platform.

As the inventor of the LeapFrog FLY Pentop computer and the renowned LeapPad Learning System, Marggraff’s work is well known. LeapFrog Enterprises Inc. shipped more than 30 million LeapPads in 5 years and claimed that 77 percent of households with children between 4 and 7 owned LeapPads within those 5 years.

Prior to LeapFrog, Marggraff was a co-founder of StratCom Inc., a company whose product was the working proof of a technology that became known as Asynchronous Transfer Mode. StratCom sold in 1996 to Cisco Systems Inc. for $4 billion.

Still, Marggraff maintains that LiveScribe is his most exciting creation.

The Pulse smartpen records everything you hear and write, so you never miss a word.

The Pulse smartpen only weighs 1.3 ounces, so it feels light in your hand.

Founded in 2007, LiveScribe sells a pen that writes on a special kind of microdot paper that enables the infrared camera at the tip of the pen to track everything a user writes. The pen also records audio so that when someone is taking notes during a discussion, the audio and writing are synchronized. When a person uploads the audio to a PC, the writing uploads as well so that tapping on that page of notes on the PC brings up the audio at that moment.

Marggraff views Livescribe as a mobile computing platform consisting of the Pulse smartpen, dot paper, smartpen applications, Livescribe Desktop software, a Livescribe online community and development tools.

The company’s development platform has produced applications for the pen such as a language translator. To use the application, a user writes a word, selects a language on the pen and taps the word, and the pen plays aloud the translation. For example, if someone tapped on the word “hello” while the pen was set to Spanish it would say “hola.”

With another application, the user can draw a piano keyboard and tap the keys with the pen to produce the notes. Games like Blackjack and Hangman are also available.

The company offers about 60 applications in its store, with more to come as independent developers continue to submit new software for the Pulse smartpen. The pen is available at Apple, Best Buy, Target and Staples stores in a 2 gigabyte version for $149.95 and a 4 gigabyte version for $169.95.

Since its launch in 2008, the Pulse has won multiple awards, including Popular Science’s Best of What’s New 2008, Popular Mechanic’s 2008 Breakthrough Award and MacWorld’s Best of Show in 2009.

Marggraff said the new round of funding will support the company’s growth and ambitious plans for the platform. He said the Series C funding, expected to close in the “short term,” will include new investors as well as insiders, but he declined to say exactly who is participating. The Oakland, Calif.-based company previously raised about $60 million from Aeris Capital, Gerlach & Co., Lionhart Investments Ltd. and VantagePoint Venture Partners.

COMMENTARY:   I have seen the the Pulse smartpen at Best Buy, and was intrigued about its potential, but did not cover it in my blog because there are so many other digitized pens that allow you to do something similiar, albeit without the audio recording capability of the Pulse.  

I like the pen and the ability to capture not just what is being written, but its ability to record audio.  This would be great for preparing presentations, where the presenter wants to project that "personal" touch and look of real writing.  The recorded audio is a big plus since you can include audio "side notes" that provides further explanation and comments about what is being written.  

However, I wonder just how soon touchscreen tablet computer makers like Apple (iPad), HP and others, will add the ability to do the same thing that Livescribe offers, but without the fancy Pulse pen and special dot paper.   The same could be said about smarphone manufacturers like Apple (iPhone) and Android-based smartphones.  Many smartphones now have touchscreens and built-in speakers, so all you would need is an app, and you are good to go.

Although I am impressed with Livescribe's announcement that they have raised an additional $30 million in venture capital, this seems awful risky to me with all the tablet computers and smartphones with touchscreens that could make Livescribe's technology obsolete literally overnight.   Just playing devil's advocate.

Courtesy of an article dated June 25, 2010 appearing in The Wall Street Journal's Venture Capital Dispatch

HERMAN MILLER'S DESIGN PLAN FOR GROWTH, SURVIVES IN SPITE OF COMMERCIAL REAL ESTATE BUBBLE

Office furniture giant Herman Miller's long-term design strategy to survive the commercial office building bust, grow and compete more effectively

At the start of the 2000s, Michael Volkema, then the chief executive officer of Herman Miller Inc., became convinced that growth in the white-collar workforce was going to slow in the company’s main markets. That was a threat to this office-furniture maker, based in Zeeland, Mich., whose revenues depended on products sold to the white-collar workforce — products such as office desks, chairs, panels, shelves, and cabinets. Volkema’s solution was to create the Creative Office, a capability within Herman Miller for identifying adjacent markets in which the company could build businesses that would provide significant new streams of revenue.

The CEO chose Gary Miller, a 26-year company research veteran, to spearhead the effort, with the aspiration of doubling the size of the company’s business playing field in three to five years. Miller (no relation to the Miller in the company name) knew he would be exploring unfamiliar market territory. Although he would stay within the boundaries of office interiors, he would need to step beyond Herman Miller’s traditional niche making furniture and cubicles.

Still, Miller didn’t want to butt heads with incumbent companies. Why compete with giants dominating existing markets? “Gary went out and asked, ‘What are the unsolved problems out there?’” says Brian Walker, the company’s former chief financial officer, who took over as CEO in 2004. “He didn’t ask, ‘How do I respond to the market for specific products like lighting?’”

Miller’s multiyear research and development effort, which included creating a partnership with West Coast and East Coast technologists and architects, led to a burst of new concepts. In lighting, for example, GE, Philips, and Osram Sylvania were then focusing on light-emitting diodes (LEDs) as substitutes for standard incandescent light fixtures. Miller and his team saw an alternative: using the low-voltage DC power of LEDs for novel kinds of illumination — light tunnels, walls, lighted objects, wearable light. Why restrict lights to conventional overhead fixtures? Why not integrate them into office furniture and fixtures in new ways?

That effort led to a suite of product prototypes dubbed Programmable Environments, and later to a new business named Convia. Among the prototypes were illuminated, movable “visual shields” that changed color and a suspended wall with integrated LEDs. Integral to the new product suite was the notion of programmability. Office workers themselves would be able to use various devices, including their desktop computers, to reconfigure and reprogram the office environment. The new hardware and software allowed Miller and his team to redefine how people would think about personal space, office geometry, privacy, and illumination. In the end, the R&D project spawned 25 patent applications, and Convia was established as a Herman Miller subsidiary in 2006.

The creation of Convia might sound like a tale of pure product innovation, or even of technology adoption, but it is actually a story about management — and only the most recent of several similar stories at Herman Miller. Over many decades, the company has made itself a laboratory for testing new management ideas and turning them into effective practice. Since 1995 in particular, under CEOs Volkema and Walker, Herman Miller has adopted a string of management innovations — shareholder value–based decision making, lean production, supplier and dealer integration — and made them work for the long term.

As testimony to the benefits of disciplined management practice, Herman Miller has weathered the recent financial storm while continuing to fund high-risk ventures like Gary Miller’s. Herman Miller competes in an industry slammed by arguably the worst commercial real-estate crisis in a generation. Still, despite a 19 percent plunge in sales for fiscal 2009 (ending in May), the US$1.6 billion company reported a $68 million profit, albeit down from $152 million in fiscal 2008. Over the last 10 years, its stock has consistently outperformed the Standard & Poor’s 500 index.

NOTE:  Click HERE to read the rest of this article

COMMENTARY:  I have always considered Herman Miller office furniture a class act.  They incorporate the best design and functinality.   Expensive, yes, but well worth the investment.  Herman Miller's Aeron office chairs are a classic that will never be out of date.  A classic. Pure unadulterated comfort.  I actually slept in one.

Courtesy of an article dated May 25, 2010 appearing in Strategy + Business Magazine

BRITISH PETROLEUM STARTS USING KEVIN COSTNER'S OIL-SEPARATING CENTRIFUGES, ORDERS 32 OF THEM

BP has been toying with the idea of using actor Kevin Costner's Ocean Therapy technology to clean up the Gulf oil disaster for the past month. Once we got over the Waterworld jokes, we realized that the centrifuge-like device is actually fairly useful--it sits on a barge, sucks in dirty water, separates the oil, and deposits the clean water back into the ocean. BP ordered 32 of Costner's centrifuges last week, and apparently, the oil giant has already started using them. Check out the video below (hat tip: Andrew Price at GOOD).

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The technology is still flawed. Lance Ortemond, general manager at D&L Salvage, explains in the video that workers haven't been able to get the concentration of oil in the separated water down far enough to actually send clean water back into the ocean. As a result, it will still be another two months before the majority of the Ocean Therapy devices are deployed--that leaves plenty of time for BP to reach out to the public for alternate solutions.

In an interview with the Associated Press, BP executive Doug Suttles said, "It's difficult to find the good ideas, but when we find them, we want to move fast." And yet BP dismissed outright 908 potential solutions from InnoCentive, an online crowdsourcing community where 61% of all "solvers" have Ph.Ds or master's degrees. If BP can take the time to evaluate an idea from the star of Sizzle Beach, U.S.A., surely it can listen to creative solutions from people with actual technical experience.

COMMENTARY: The audacity and arrogance of British Petroleum to overlook or discount the potential solutions to the Gulf Oil spill.� President Obama and the Depart of the Interior also made the mistake of�allowing BP to have complete control over the Gulf oil spill cleanup and stopping the leak.� After two months,�an estimated�million gallos of crude oil have spilled into the beautiful Gulf of Mexico and are now covering the beautiful beaches in many areas of the Gulf.�

I have always been a huge Kevin Costner fan, and I hope his 32 machines are able to remove most of the oil before they cost further damage.

Courtesy of an article dated June 25, 2010 appearing in Fast Company