Another Rise and Fall….Sew What?…..Summer Reading from Gates and Buffett….Econ Recon: How Unequal is Your City?

“Heroes are heroes because they are heroic in behavior, not because they won or lost.”

Nassim Nicholas Taleb
Author of  “The Black Swan”

Another Rise and Fall

FAO Schwarz, the legendary toy story in New York that was immortalized by Tom Hanks playing the “floor piano” with his feet in the movie “Big,” closed this week after operating since 1870 and boasting 40 stores at its peak. Its demise is attributed to some of the same forces that have claimed other retailers such as the cost of brick and mortar and the surge of online shopping.

You can read numerous stories about the company’s failure, but more important is why it succeeded and endured for so much longer than most business. The company literally established its industry because when it was founded, the toy market in the US was almost non-existent. For a few valuable lessons, check out this Fortune Magazine Article from 1940 that traces the history of FAO Schwarz to that point and analyzes its successes, which many said came from the fact that the founder “always tried to get what was good and exclusive,” and: “They always believed Schwarz.” 

Value and trust.  Some things never change.

Sew What?

Andrew Carnegie once remarked that “Pioneering Don’t Pay.” Peter Drucker commented that “Business has only two functions — marketing and innovation. All the rest are costs.”  The truth of these observations stands out in this article from the Smithsonian about the introduction of a truly “disruptive” technology: the Singer sewing machine. The real story of how the sewing machine finally made it to the market and transformed the clothing industry is less about inventions and inventors than the insights of truly a great executive (i.e. NOT  Mr. Singer) who brought order and collaboration to a chaotic situation that permitted the widespread introduction of a truly disruptive technology. Time reviewing “How Singer Won the Sewing Machine War” will be time well spent!

Summer Reading from Bill Gates and Warren Buffett

A few suggestions for summer business reading:

If you like the Singer Story, here’s the story of another great organization which offers many lessons. Clearly, GM has had issues in recent years, but to an earlier generation it was what Apple and Google are to us. Bill Gates once remarked that if you could only read one book about business it should be “My Years with General Motors”  penned by the man who lead it to the greatness of its early years, Alfred P. Sloan (you may be more familiar with his name from the Sloan Kettering Institute or the Sloan Business School at MIT).

A recent article in the WSJ outlined Warren Buffet’s best  reading suggestions…and not all are about stock marketing investing. Check out  11 Picks from Warren Buffets’ Bookshelf

Econ Recon

As noted before in this space, income inequality is likely to be a major issue in the 2016 election cycle. Most people have opinions on this matter but not a lot of facts. If you’d like to have some facts before forming an opinion, check out this graphic analysis of inequality in various US metropolitan areas.  

 A Little Fun: Wedding Bell Hell

There are few life events that involve more time, planning, precise execution and, of course, money than a wedding. Here’s a few quick videos of what can go wrong if you fail to plan perfectly!