Category Archives: Etc.

Behind the Split Between FB and WhatsApp’s Founders

How ugly was the breakup between Facebook Inc. FB -1.65% and the two founders of WhatsApp, its biggest acquisition? The creators of the popular messaging service are walking away leaving about $1.3 billion on the table.

The expensive exit caps a long-simmering dispute about how to wring more revenue out of WhatsApp, according to people familiar with the matter. Facebook has remained committed to its ad-based business model amid criticism, even as Facebook Chief Executive Mark Zuckerberg has had to defend the company before American and European lawmakers.

The WhatsApp duo of Jan Koum and Brian Acton had persistent disagreements in recent years with Mr. Zuckerberg and Chief Operating Officer Sheryl Sandberg, who grew impatient for a greater return on the company’s 2014 blockbuster $22 billion purchase of the messaging app, according to the people.

More at WSJOnline

McDonald’s Behind the Arches

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I read this book sometime back before I sampled McDonald’s in India. Just finished reading it again and found it to be delicious as ever. A terrific book by John F.Love about the growth of the company and the journey of a multibillion-dollar global corporation. The book ends in the year 1994 and things might have changed for the company since then.  But it is still a great read for anyone who is interested in fast-food industry and generally the growth of any business around a new concept. Though setting up fast food chains wasn’t new at the time when Ray Kroc took over, it still had to be done in a very different manner as the book reveals. John F.Love does a very good job of capturing both the entrepreneurial spririt and the operational excellence of the key people behind the corporation like Ray Kroc, Fred Turner, Harry Sonneborn etc.

McDCoupons

The book has 17 chapters+Prologue (The Unknown McDonald’s) and Epilogue.

  1. Prologue (The Unknown McDonald’s) : “…it is the story of the company that changed the eating habit of Americans, that revolutionized the food service and processing industries of United State, and that legitimized the now widespread practice of franchising. It is the story of the unknown McDonald’s, America’s first modern entrepreneurial success–a system that bridges the gap between entrepreneurs and corporations” Unquote
  2. Yes, There is a McDonald:  This chapter is about the real McDonald brothers who opened and ran the first McDonald’s stores and how they dabbled with the concept of franchising before Ray Kroc said hello with his (milkshake) multimixers
  3. The Salesman: “This was now 1954, and at age fifty-two Ray Kroc was still looking for the magic–something that would allow him to capitalize on his three decades of sales opportunity he had trained for. He also knew it was the type of opportunity that would never come his way again”
  4. The Franchising Derby:  An interesting chapter on the current players back then in the franchising world and how the franchisers treated franchises as a way of making quick money just by lending their name or providing supplies. And how Ray Kroc desperately wanted it to be different in his system, through the success of franchises and creating a better environment through purchasing power. His straightforward sales approach with prospective franchisees and no-nonsense attitude towards suppliers.
  5. The Owner/Operator: Kroc’s franchising plan–selling low-cost franchises for one store at a time–and how it was suited for hands-on operators cum owners. He would give them the freedom to crate and contribute ideas that he believed benefited the system, but he would not tolerate deviation from the norm when he thought it hurt the system.
  6. Melting Pot: A nice chapter on the various managers who joined the firm from diverse backgrounds and how it all added the corporate dynamics. “Kroc had mastered the art of managing creative individuals by maintaining the delicate balance between their need for freedom and their need for guidance.”  “He brought out the very best in people,” Turner says” He was the  best boss you could ever have”
  7. Making Hamburgers:  All about the process, across various products of McDonald’s…and treating making burgers as important as rocket science. Ex.Ralph Weimer French fry scoop “The real secret to McDonald’s successful operating system is not found its regimen but in the way it enforces uniform procedures without stifling the entrepreneurship of franchisees. As such, McDonald’s is something of an American response to Japan’s management by consensus. Without the freedom of franchisees to and suppliers to exercise their entrepreneurial insticts, to test their own ideas on new products and procedures, and even to challenge the corporation head-on, McDonald’s might still have attained its celebrated uniformity, but a terrible price.”
  8. Making Money:  Real estate angle by Harry Sonneborn, new field team, aggressive sales tactics, flying in a corporate plane, new accounting principles, getting institutional loans etc.
  9. The Buyout: Ray Kroc’s big gamble in the buyout of McDonald brothers stake.
  10. Partners: PR, Advertising, and New product-Fish Sandwich.”…as his chain began expanding its horizons with new products and promotions, he (Kroc) was discovering the creativity of  his company’s independent franchisees and suppliers. They were bcoming full fledged partners in the business.”
  11. Going Public: “In 1985, McDonald’s would achieve the ultimate respectability by becoming the first service company to be added to the prestigious list of the Dow Jones 30 Industrials, but the the process of getting to that pinnacle began on the day the company was listed on the NYSE.” Super bowl success, Cooperative advertising (OPNAD) and the rise of Harry Sonneborn.
  12. McDonald’s East and McDonald’s West: Culture change in the east and west, the conflict between Krock and Sonneborn, and Fred Turner becomes the CEO.
  13. High Gear: Breakneck pace of expansion
  14. Media Magic: Becoming a top advertiser
  15. ‘McDonaldizing’ the Suppliers: From paper cups to french fries to distribution and inventory.
  16. The Public Challenge: Worm factor, minority protests, Manhattan mystery and how the company built a proper structure to protect from being an easy target owing to its size and visibilty
  17. Checks and Balances: Franchisee revolt that led to soul searching and better practices.
  18. Exporting America: International operations and lessons learnt. Weathering out the storm and committing for longhaul.
  19. Epilogue: Looking beyond 1994.

Here’s a great paragraph that sums up any customer centric company.

mcdonalds customer service

FB, Uber after AI professors…!

As it builds these labs, Facebook is adding to pressure on universities and nonprofit A.I. research operations, which are already struggling to retain professors and other employees.

The expansion is a blow for Carnegie Mellon, in particular. In 2015, Uber hired 40 researchers and technical engineers from the university’s robotics lab to staff a self-driving car operation in Pittsburgh. And The Wall Street Journal reported this week that JPMorgan Chase had hired Manuela Veloso, Carnegie Mellon’s head of so-called machine learning technology, to oversee its artificial intelligence operation.

More at NYTimes