BC BUSINESS MENTAL MODELS
Saved by @DattaTanishq

“I spend too much at Starbucks” is a legendary meme.

It's also not an accident: the coffee retailer -- worth $120B -- uses many psychological hacks in its store and menu designs to get you to drop more cash.

Here are 11 of them 🧵

 1/ Starbucks is all about positioning

The chain has higher prices vs competitors. But that's the point.

People typically assign higher value/quality to higher prices. Known as "irrational value assessment", this makes Starbucks an everyday luxury that people will pay for.
2/ Premium brand = premium customer base

By setting its prices higher, Starbucks attracts clientele that are relatively price insensitive.

Starbucks frequently raises its prices with little negative effect to its bottom line.
3/ "More than coffee"

Former Starbucks CEO Howard Schultz created the premium feel by emphasizing experience:

◻️Positioned SBUX as a "third place" (b/t home, work)
◻️Brought bean grinding in-store (for aroma)
◻️Banned auto espresso machines (it took away from the barista craft)
4/ Lighting and visual cues

The Starbucks operations is about "flow", efficiently moving people around the store+ getting them to spend.

To form lines, it directs people to well-lit areas (usually the merchandise, which provides the added benefit of nudging products for sale).
5/ Shop layout

Across its 32k+ locations, Starbucks places its cashiers in the middle or back of the cafes. As customers work through the line, they're watching other patrons enjoy their beverages and bites.

This is all priming them for their eventual orders.
6/ Mobile app

There's a psychological effect known as "peak-end rule": people remember experiences by the most intense part and the end.

The pre-order app takes away 2 of the most unpleasant parts (paying + waiting), improving the *whole* experience.
7/ Starbucks card

Customers have $1.6B+ on Starbuck's apps/cards (hence the joke "SBUX is a bank").

In a concept called "mental accounting", people irrationally classify money in different buckets and treat them differently. That SBUX money is way more *spendable* than cash.
8/ Loyalty program

Starbuck's Loyalty Program has 20m members and they contribute ~50% of the company's revenue.

The retailer takes all customer data and is able to provide individualized offers at scale. The freebies are habit forming and keep people coming back.
9/ Personalized orders

We all know the joke: "Starbucks mispelt my name". However, the very fact that the baristas write it down increases your affinity for the brand.

This is known as the "cocktail party effect": people focus (and assign more value) to info about themselves.
10/ Menu structure

Through the 90s, the 3 sizes that Starbucks listed were Short, Tall and Grande. It has since bumped Short (you can still order it but its not on menu) and added Venti.

Now, the most popular size is the Grande (the new middle option and larger than SHORT).
10/ Pricing

In addition to upping default sizes, Starbucks also uses pricing to steer you.

In what is known as the "attraction effect", your choice-set gravitates to the items that are "closer together". Here, the price b/t Grande and Venti is *closer* than Tall and Grande.
11/ No dollar signs on menu

Why? psychologically, a dollar sign triggers the idea of "price" and "spending...instead of "experience" and "what you're receiving".

Here IS a dollar sign: ~$29B, which is Starbucks projected sales this year.
12/ If you enjoyed that, I write threads breaking down tech and business 1-2x a week.

Def follow @TrungTPhan to catch them in your feed.

Here's one you may enjoy: https://t.co/GsnF25dBwj
13/ I discuss interesting topics like this once a week (with a healthy dose of dumb jokes) on the Not Investment Advice (NIA) podcast.

🔗https://t.co/WY6Xehj30C
14/ Sources

Formation: https://t.co/aqCrODYrof

Bloomberg: https://t.co/2EStUU7BLW

CNBC: https://t.co/99JjI8OlbH

Medium: https://t.co/A4APLJQiBO

Brightside: https://t.co/wc1DAS8qAD

Price Intelligently: https://t.co/hz8FGpeqQv

Kent Hendricks: https://t.co/FtePg3mwJ2
15/ Here's an interesting WSJ price breakdown of a Starbucks drink:
16/ Oh, also, a Starbucks barista one gave a famous answer on Quora explaining "what your drink said about you":
17/ One more of the Starbucks barista's insights

🔗https://t.co/rMfxx0pwVx
18/ Some Reddit comments from former Starbucks baristas...which are big if true https://t.co/mqcj0qUhmD
19/ Last thing.

If you enjoyed this thread, you'll DEF like this one: https://t.co/WZZYWQhlzD

More from Trung Phan 🇨🇦

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𝚃𝚛𝚞𝚗𝚐 𝙿𝚑𝚊𝚗 🇨🇦...
@TrungTPhan
1/ Marcus Bullock went to prison in the mid-90s at the age of 15.

Today, he's the CEO of Flikshop -- the "Instagram for the Incarcerated", an alternative to the outrageously expensive phone call system.

This is a truly inspirational founder story 👇👇


2/ In 1996, Bullock was living in Maryland. One night, he and a friend carried out an armed carjacking on a man sitting idle in a shopping mall parking lot.

It was the biggest mistake of this life.

3/ Several years prior to hit actions, there was the famed 1989 Central Park "Jogger Case", in which 5 minority youths were (falsely) accused of raping a jogger.

In the aftermath, nearly every state passed new laws that made it easier for courts to try youth as adults.


4/ For the carjacking, Bullock was charged as an adult and served 8 years in prison.

With onerous prison phone charges ($18 / 15 mins), Bullock's mother kept in touch with him by sending a photo or letter every day.

"She saved me," he says of his mom's efforts.


5/ The $1.2B+ prison phone system is dominated by 2 PE-backed firms (Global Tel Link, Securus Tech).

For the right to operate these phones lines, prisons effectively pay kickbacks to state and local government. The highest kickbacks win bids, which drive up costs.
CULTURE
Trung Phan \U0001f1e8\U0001f1e6
Trung Phan 🇨🇦...
@TrungTPhan
Our intuitions often leads us astray. A good reminder: study counterintuitive math and economic results.

Here are 9 of them 🧵

The Birthday Paradox

In a room of 23 people, there's a >50% chance that 2 people share the same birthday.

This type of probabilistic thinking does *not* come naturally to many people.


The Coastline Paradox

Fractal geometry is also confounding:

The coastline of a landmass does not have a well-defined measurement. As the unit of measurement gets smaller (eg. from KMs to cm), the length increases without limit.


Winner's Curse

In an auction, the winning bid will usually exceed the intrinsic worth of an item leading to a significant overpay (and negative net profit for the winner).


Braess's Paradox

Removing an extra road can make everyone's commute time faster.

Why? The existence of a "fast" road leads to congestion because everyone uses it. If you remove the shortcut, traffic flows better.
FINANCE , COUNTERINTUITIVE
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𝚃𝚛𝚞𝚗𝚐 𝙿𝚑𝚊𝚗 🇨🇦...
@TrungTPhan
1/ Amazon is famous for its writing culture:

• "Mock press releases / FAQs" for new product pitches
• "6-page memos" instead of Powerpoint

Two former Amazon execs wrote a book called "Working Backwards" detailing the philosophy.

Here are some insights 🧵


2/ The "Working Backwards" playbook

Instead of creating a product then finding customers, Amazon asks "What does the customer need?" and works toward the product.

✅Customer need --> Create product
❌Create product --> Find customer

3/ Write a mock press release

To determine if the customer need makes biz sense, employees write a press release:

• What problem is the new product solving
• Why it's better than existing options

To persuade a customer, the document has to be jargon-free and tell a story.


4/ Press release forces big thinking

You don't write a press release for an incremental improvements.

Creating a product worthy of a press release means really solving a customer problem and going after markets with large TAMs.

5/ Include an FAQ in press release

Addressing every potential customer question can help identify hurdles to getting something to market...and also uncover opportunities.
CULTURE
Trung Phan \U0001f1e8\U0001f1e6
Trung Phan 🇨🇦...
@TrungTPhan
At 40, Jim Simons left a famed math career to launch the most successful hedge fund ever: Renaissance Tech.

Even though it only won 51% of trades, the fund made 66%/yr for 30yrs (Simons worth = $25B). It's a story of genius, but also of how hard it is to beat markets.

THREAD🧵


1/ The crown jewel of RenTech is The Medallion Fund (launched in 1988).

◻️ From 1988-2018, it posted a return of 66%/yr (39% after fees)
◻️$1 invested in 1988 is now worth $14m+
◻️ Cumulative profit = $100B+ even with an avg. fund size of only $4.5B


2/ Before creating what Bloomberg calls the “greatest money-making machine ever”, Simons was a legendary mathematician.


3/ While at Stony Brook, Simons started trading commodities (with money staked by former MIT classmates).

The side investing was good enough that Simons -- also going through a divorce -- decided to leave academia and launch his own money management firm in 1978: Monemetrics.

4/ At the time, there were 2 main investment approaches:

◻️ Fundamental (understanding and forecasting an asset based on key drivers)
◻️ Technical analysis (studying price charts)

Simons’ strategy was to place a “fundamental lens” on currencies (eg. supply and demand).
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Trung Phan
Trung Phan
@TrungTPhan
Steve Jobs famously said innovation is "saying no to 1000 things" before you say yes.

For more than a decade, Apple has used Pablo Picasso's Bull to drive home the lesson.

Here's a breakdown 🧵


In Dec. 1945, Picasso created "The Bull", a series of 11 lithographs (stone prints).

With each successive print, a bull is simplified and abstracted. Picasso's goal was to find "spirit of the beast".

At Apple, employees are taught this philosophy.


Below are the 1st, 4th and last stone print.

The bull progresses from:
◻️a realistic drawing
◻️to a deconstructed image w/ the famous "abstract" style
◻️to lines outlining a shape

Through 11 iterations, Picasso simplified the image until it captured the "essence" of the bull.


Picasso said of the abstraction process:

"Two holes. That’s the symbol for the face, enough to evoke it without representing it. But isn’t it strange that it can be done through such simple means? Whatever is most abstract may perhaps be the summit of reality.”


Enter Apple University.

In 2008, Steve Jobs tapped the dean of Yale School of Management to create an internal training curriculum for Apple.

The program was meant to teach new employees Apple's culture and design philosophy (the teachings are rarely shared with the public).
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12 TRADING SETUPS which experts are using.

These setups I found from the following 4 accounts:

1. @Pathik_Trader
2. @sourabhsiso19
3. @ITRADE191
4. @DillikiBiili

Share for the benefit of everyone.

Here are the setups from @Pathik_Trader Sir first.

1. Open Drive (Intraday Setup explained)


Bactesting results of Open Drive


2. Two Price Action setups to get good long side trade for intraday.

1. PDC Acts as Support
2. PDH Acts as


Example of PDC/PDH Setup given
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👇Thread.

Published a new essay: The red flags and magic numbers that investors look for in your startup’s metrics – 80 slide deck included!


This was a deck that I created on my (longish) interview process with @a16z. It was a long path, starting with meeting folks at the firm 10 years ago. But the purpose of the deck was to explain how I would use my superpower in an investing context

Here's what I explain in the deck. As investors (whether angel or VC) we're often confronted with an up-and-to-the-right graph. Is it going to go up? Or down?


One solution to forecast these growth curves is the Growth Accounting Framework, where you add up New+Reactivated and subtract churned users. In each time period that gives you the difference in monthly actives.


The problem with this is that it's a lagging metric, not a leading one. We need to go one level deeper and look at the underlying loops that drive these numbers, to understand the quality.
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Lu_lu\U0001f498
Lu_lu💘
@luciame16
Some thoughts on episode 54 of #Hercai

If you ever cross the distance and come to me, come with love that blooms in your heart.
~ Şems-i Tebrizi

#Reyyan #Miran #ReyMir #EbruŞahin #AkınAkınözü
#HercaiThoughts


1
I have to make a note before writing about this episode. I was the person (still am) who thinks that bringing back D. was a bad idea. I repeat it that for me the writing of S1 and S2 is like tossed into the bin with that plot evolution, but they had to invent something+
#Hercai

2
+ to be able to continue to prolong the general story after Aslan’s story did not work out. All the suffering of M., all the crying seems for “nothing” for two seasons and we viewers are also kind of fed up in seeing him cry all the time when with the upcoming episodes+
#Hercai

3
+he is justified the most to cry. With her resurrection now the attention shifts back to Miran’s storyline and I don’t know if I like this to be honest. This said, Dilsha is here and we have to deal with her.
#Hercai

4
So, my comments are going to be how I find they wrote her into the story, the details we get to know, the flashbacks we get to see, the way it was filmed and directed, with leaving out if I agree on it or not but describing along the way what I saw.
#Hercai
CULTURE
The Astro Sapien\u2728
The Astro Sapien✨
@TheAstroSapienn
Here is my Thread on 'Ketu (South Node) Through Nakshatras' The 27 Constellations 🙏❣.

Do check your “Past life Mastery” which KETU Represents🤞🏻.


1. Ketu in Ashwini Nakshatra:

Here native is Great at Financial Planning, Face reading, understanding other’s mind and intention, Driving Fast they don’t like but they are wayyy smooth over driving Fast. This is also great position which can make native Great Surgeon,

Neurologist, Psychologist.
These natives are Selfless and Sacrifice self for others. They gets Fame and Success but they just don’t care.

2. Ketu in Bharani Nakshatra:

They are good at Flirting, Attracting opposite sex, studing ancient subjects. They are also Great at Creativity and Artistic activities. The are lazy but they are really open minded who handles situations really well.

In Past life they have handles many things which is now helping them to make things easier in this life. They are great Leaders too.

They are really good at Hard work and Smart work both. And yes just as Ashwini they don’t much care about Fame and Success!
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Vibhu Vashisth
Vibhu Vashisth
@VIBHU_Tweet
🌺श्री गरुड़ पुराण - संक्षिप्त वर्णन🌺

हिन्दु धर्म के 18 पुराणों में से एक गरुड़ पुराण का हिन्दु धर्म में बड़ा महत्व है। गरुड़ पुराण में मृत्यु के बाद सद्गती की व्याख्या मिलती है। इस पुराण के अधिष्ठातृ देव भगवान विष्णु हैं, इसलिए ये वैष्णव पुराण है।


गरुड़ पुराण के अनुसार हमारे कर्मों का फल हमें हमारे जीवन-काल में तो मिलता ही है परंतु मृत्यु के बाद भी अच्छे बुरे कार्यों का उनके अनुसार फल मिलता है। इस कारण इस पुराण में निहित ज्ञान को प्राप्त करने के लिए घर के किसी सदस्य की मृत्यु के बाद का समय निर्धारित किया गया है...

..ताकि उस समय हम जीवन-मरण से जुड़े सभी सत्य जान सकें और मृत्यु के कारण बिछडने वाले सदस्य का दुख कम हो सके।
गरुड़ पुराण में विष्णु की भक्ति व अवतारों का विस्तार से उसी प्रकार वर्णन मिलता है जिस प्रकार भगवत पुराण में।आरम्भ में मनु से सृष्टि की उत्पत्ति,ध्रुव चरित्र की कथा मिलती है।


तदुपरांत सुर्य व चंद्र ग्रहों के मंत्र, शिव-पार्वती मंत्र,इन्द्र सम्बंधित मंत्र,सरस्वती मंत्र और नौ शक्तियों के बारे में विस्तार से बताया गया है।
इस पुराण में उन्नीस हज़ार श्लोक बताए जाते हैं और इसे दो भागों में कहा जाता है।
प्रथम भाग में विष्णुभक्ति और पूजा विधियों का उल्लेख है।

मृत्यु के उपरांत गरुड़ पुराण के श्रवण का प्रावधान है ।
पुराण के द्वितीय भाग में 'प्रेतकल्प' का विस्तार से वर्णन और नरकों में जीव के पड़ने का वृत्तांत मिलता है। मरने के बाद मनुष्य की क्या गति होती है, उसका किस प्रकार की योनियों में जन्म होता है, प्रेत योनि से मुक्ति के उपाय...
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