Business

Everybody Get On

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Most people who have flown are familiar with the Southwest Airlines “cattle call”. For those who don’t know what it is, I will give a quick explanation.

Southwest doesn’t give assigned seats for their flights, rather they issue a letter to you, A B or C. When you get to the gate, they simply say “group A get on” and that is what happens. Those who check in earlier receive the preferential section and therefore the best shot at getting those invaluable exit row seats. The problem with this was that people would begin lining up hours in advance of the flight. They had separate lines for the A, B and C sections. If you were in the rear of the section A people, there is no shot at the more valuable seats, but at least you could still get an aisle or window.

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Management Advice From 1797

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Yesterday I went to see Elizabeth: The Golden Age….not a great movie, but worth seeing, and better than you would think from reading the reviews. The battle scenes with the Armada reminded me of something written by a Spanish government official, which I posted about a couple of years ago. Don Domingo Perez de Grandallana was writing about the battle of Cape St Vincent, in 1797, but the factors he discusses were likely also major influences on the fate of the Armada, 200 years earlier. And they are also major influences today, 200 years later, on the fate of many efforts in business and government.

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“Recursive Self-Doubt” and Decisionmaking

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A very insightful post.

Rob’s argument also partly explains why individuals tend to become increasingly risk-averse with age, since most people know more than they did when they were younger and can therefore more easily rationalize inaction. Perhaps, then, older people tend to be too risk-averse, and might accomplish more if they were more aware of this cognitive bias.

(via David Foster)

Prepaid Medical Service: An Interesting Business Model

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Via Rachel comes a WSJ column about a physician who charges his patients flat, monthly rates rather than billing by appointment or procedure. This seems like it might be a good system. It resembles monthly plans for cellphone service, where service providers makes money in part because many subscribers use fewer than their allotted minutes, and subscribers who go over the limit pay a higher rate for the marginal minutes. (The fact that the prepaid medical plan doesn’t cover everything is its way of dealing with high-demand, high-cost customers who are analogous to cellphone users who exceed their allotted minutes.)

Naturally, the innovative physician’s business is under attack from regulators and insurance companies, but it appears that he is more than holding his own (one insurer is considering offering a plan to complement the prepaid service). It will be interesting to see if his business model is viable in the long term and in markets other than the one that he serves.

CNBC Has Competition

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It’s about time. CNBC is maddeningly journalistic rather than business-oriented in its style, and its news coverage and program selections are shot through with leftist, anti-business bias. You would think that a network devoted to markets and business would be run by people who actually know something about markets and business. Instead we get hot babes and snarky voiceover “analysis” from j-school hipsters who have all the elitist and group-thinking instincts of modern professional journalists. What a herd. Every once in a while they stumble onto something good and unique but not PC, like Kudlow or the WSJ editors’ show, but then they try to kill it by changing its scheduling and promoting the conventional-wisdom news show or screaming-asshole trading show of the moment in its place.

Finally, they are going to have real competition. This will benefit everyone other than CNBC’s owners and staff.