Tag: blog

Service Industry Rent Seeking

I’m writing this out of frustration with the current state of the service industry, and with the unfortunate prediction that things are going to get worse before they are going to get better. I also read Monopolized by David Dayen which leaves an unfortunate aftertaste in your mouth, even after what is supposed to be a rallying call of a last chapter.

In my complaint today, I’m talking about classic rent seeking. This is the type that’s always shown up when honest people are trying to make a living, because honest people pay fees willingly.

I’m talking about platforms like HomeStars, Yelp, Angie’s List, Handy, Homeflock, Flamp, the list goes on. Google and Facebook act in similar ways, but their extraction is to a further degree, as they sell ad space for you to purchase (and potentially off of the traffic they generate from the ads).

Same Pitch, Different Platform

The pitch is always the same, that it’s for the customer’s benefit, but the company profits are the end to its means. The whole goal is to have their platform be the intermediary, because they don’t perform any of the services.

Each of these platforms works by cultivating itself as a place for clients to submit proposals of the work that they want to get done. The proposal then gets tendered to several vendors (depending on who has paid most recently) and the client can select between a few choices.

Any provider who has worked with one of these intermediaries knows their whole focus is to get you to spend more time on their platform, and to use your credibility to increase their credibility.

It means that service providers need to be ready to respond quickly in-platform so that a “slow response time” isn’t posted to their account (unremovable, even as a paying member) which will drive down their ratings.

These platforms also have direct control over the amount of proposals an account can see, or the location they are seeing them from. None of this is to better the consumer, it is to extract as much money as possible from the service provider.

Draining Your Resources

An extreme example of this can be seen with their website plug-ins. They want you to feature HomeStars as a component of your website, with links to them that increase their back-end PageRank and SEO. You might say, but HomeStars puts a link to my website on their page too, doesn’t that help me in the same way? And that’s a pretty honest and fair assumption, which is why HomeStars doesn’t do it. Here’s what Neil Patel (a world-class SEO expert) has to say about why a website would use a “nofollow” link for vendors on their website:

“Why would a website use nofollow links? Because linking to low-quality or low domain authority websites can hurt the link-hosting website’s rankings. So websites will often use these links to avoid destroying their own rankings with a low-quality external link.”

So websites like HomeStars don’t want to risk their reputation by potentially linking to your poorly optimized website, but they’ll absorb all the value they can from you. These platforms rely on the assets of the companies that use their platforms at every point of their business model – parasitic through and through.

It’s just like how Google and Facebook both fight to have web-crawling pixels/lines of code so that they can take as much information. The more crawlers you add to your site, the slower it functions, but the faster it can be indexed, and the more valuable data is captured.

Google Monopoly

Google also works to extract rents from service providers, and recently it is expanding the depth of its reach in this area significantly.

You could already pay to be at the top of the results, or the top of the reviews, or the first results on a “maps” search. Google had already started playing with submitting quotes directly through search, but it recently added messenger on Mobile (a bit over a year now) and Desktop (added within a year) so that people don’t have to leave their search results page to ask their questions directly to the company.

Google is closing the loop on direct communication with clients and service providers, which is one of the only ways that you can further entrench yourself after you already control a majority of internet searches.

Closing Thoughts

The model is the same with all of these rent-seekers, dominate as the intermediary by any means necessary. For Google and Facebook, this means coming pre-installed on devices and being unable to delete them, a standard practice in the mobile phone industry now.

For others like HomeStars, it means betting that they can optimize their online presence better than the local competition and holding customers over the heads of those businesses behind a paywall.

These practices are terrible. There is no benefit but to the intermediary.

As the late David Graeber would say, these are Bullshit Jobs.

And the legal landscape of Washington seems to be changing its tone towards these tech monopolies, which is a good thing for Canada too (and the world, ultimately). I hope we see antitrust and break-ups in the near future, but I’m cautiously optimistic.

(#24) Lessons from a Start-up Culture

I’ve learned a lot in the last 2 years and 7 months. That’s when I jumped head first into a window cleaning company, working in an office where the back doubled as the shop for storage, parts, ladders and sometimes vehicles. My first desk was on top of a filing cabinet.

I was supposed to do “marketing” and was supposedly the 4th on the line for calls. I didn’t really answer the phone and the other three quickly learned that. I’m still not a natural on the phone by any means, but it gets better.

I quickly felt like I was out of my league, they were all naturals where it not only intimidated me, but also made me feel inadequate. So I tried to double down on what I was doing, while hiding “the why”. And I wasn’t hiding it from anybody except myself.

I was refusing to properly acknowledge the hard work of the people around me, and it led me away from collaboration. It was hard for me to recognize my own weaknesses, especially in the face of others’ strengths.

Looking back, I’m honestly surprised it turned out as well as it did given my stubbornness. I struck gold once I realized my success was linked to the success of the people around me. When you phrase it like that, it seems so simple, but when you’re living it day-in-and-day-out, in those moments, it will not be simple.

Unless you let it be.

Learn to control your emotions and let other things be. Learn that the things others do is the stimulus to your feelings, but not the cause. The cause of your feelings is based on your needs.

Then seek to make others pleased in the work they do.

I try to remind myself all the time that I’m surrounded by other people that work hard and diligently, all for the same purpose, the company. Then I try to take a role in guiding it.

I hope I’m not coming across as a saint or a preacher. I probably fuck up more than most. I try not to let that stop me…for more than a few days max…who doesn’t throw the occasional pity party for themselves, but sometimes it does last longer than that. I’m here to say it will come around, though, even if it takes a while, it will come around if you work on it.

I’ll try and leave you with some specific advice, rather than this rambling garbage I’m treading into rather quickly.

When you’re marketing, you’re only as good as the weakest player in your customer interaction chain. This means that you have to go through every single point and make sure that it is exactly the expectation you have set from the get-go. That means aligning sales, operations and customer support and complaints – mapping out each of those touchpoints.

If you want these changes to actually be implemented, you’ll need to have good working relationships with all the members of your team, otherwise, it’ll be dead in the water. There, I brought it full circle.

As a last point, if you map out all of the touchpoints, and ask yourself how to improve from the client perspective, you will find creative and outlandish answers. In other words, the best kind of answers.

-Jake

P.S. read about Non-Violent Communication

Allow Yourself to Fail

I haven’t written on this blog in a while, and it’s because I wasn’t willing to confront my own failure. I had failed to create written blog content every single day for 100 days in a row, so I stopped entirely for months. It’s so obviously silly when you write it out like that.

I still have draft blog posts that could I could post, but I didn’t want to accept my failure. If I walked away from it I didn’t have to think about it. But I still thought about it, because I had ideas I wanted to post all the time.

What changed?

I started thinking about the content that I had created.

I thought about the work that was building on top of itself, and what that I wasn’t in a sprint to get there. I don’t expect to have millions of views on anything for a long time, maybe never, and both of those actions are totally okay.

I started thinking about all the fun things I could do with my blog, like offering free consulting services to businesses to grow my personal network.

I accepted my failures and it has made all the difference.

One Step (#18)

That’s the absolute bare minimum, but there are plenty of people out there who won’t take a single step towards what they want out of: life, their career, relationships, themselves, as they let days pass them by.

Take at least one step towards what you want every day – it’s that simple.

The trick is to enjoy the step.

Presentation is Everything

Spoilers: For actual long-run success you will need product, team & delivery, but you can get away by starting with just presentation.

Presentation is what stops people in their tracks. It’s what gets them to circle around and come back to the aisle to read the label once more, just to make sure they saw that right. It’s what gets them excited before they really know what’s going on (this is so powerful – setting tone).

And you have to present to the right people – understand your audience and speak directly to them. If you can make a real connection with clients it will be so much more powerful in the long-run.

Spend the extra $30 for the fluorescent pink fake grass – it’ll make the booth pop!

No Rules, Only Consequences (#11)

This title is straight from the mouth of professor Keith Rogers (Smith School of Business at Queen’s University – holy shit that’s a mouthful). Who knows how many opinions influenced professor Rogers’ thoughts.

Look at Facebook violating privacy law in EU (which time? let’s say circa 2018) – they pay a fine and ultimately change their operation, but the damage has been done. And if you look at what the fines amount to it would have been more expensive to take out an insurance policy to cover themselves over the same period of time. It’s clear that the best decision is to play dirty and take the slap on the wrist down the road (how could you not?)

So, I’m not advising people to do anything illegal or really annoying, but if you’re in a place dedicated to selling and others are participating, you have to give yourself an edge. Maybe you’re not supposed to do____, but how could you know if you didn’t try? Most little things will get you a warning before being outright banned, but consider the context of where you are.

But let’s think about a farmer’s market (because I was at one recently). Why wouldn’t you have little signs at the parking entrance, or stickers to give to kids (so they can put them places), or reserve a special spot for your customers by decorating an area. If what you’re doing is interesting, engaging and overall positive it will be hard to say no.

The world is made up of people who go out and do things and make mistakes and make judgement. Vouch for yourself, stand tall and be genuine about what you’re doing. People who ask for things get them more than people who don’t.

Power in Attitude (#10)

I’ve recently found myself thinking over a conversation I had a few months ago now.

It was late one night and I was staying with friends at their picturesque home (which they have poured their heart and soul into).

I had been talking over the weekend about the recent success I was having in the business world (launching across Ontario and starting our Florida expansion). I talked about the growth, all the different roles I found myself in and the fact that I was now managing other people.

I was anxious.

The family friend who stayed up to have an evening drink with me was retired, but during his career had been both a principal and a superintendent (he’s also published a book or two).

He asked if I wanted any advice, and when I jumped at the opportunity he told me something like this:

“Have the power to be optimistic in the day. This is something YOU CAN CONTROL. It can go the other way so easily, so you need to have the strength to show positivity at the top.”

Coaches Win (#5)

All the best athletes in the world have coaches, it’s not a coincidence. Who is coaching you in your life to become a better version of yourself? If you want to become a successful entrepreneur you’re going to need help along the way. You’re also going to need to be a coach in your role to your employees.

Understanding that you can receive coaching while being a coach yourself is important to being a truly effective leader. Taking into consideration what your strengths and weaknesses are and working on developing whichever your coach says is important. Having another trusted perspective helps to keep you level in your business, but also in your life. So often the two become linked together.

Coaches don’t necessarily present themselves to you, but if you put the offer on the table you might be surprised by who says yes…and there’s not really anything to lose.