Wednesday, September 20, 2017

Bodega and the power of narrative

As mentioned before, criticizing something for being overhyped invariably to some degree makes you part of the problem. No matter how pointed and snarky your approach may be, there is simply no getting around the inherent contradiction in spending an extended period of time basically saying "we shouldn't be wasting time on this."

This is very much a danger when discussing the Bodega vending machine company (and, yes, that's what it is). This is a small and silly startup with lots of talk but few ideas, none of them good or particularly original. Though, in terms of functionality, it's generally inferior to existing vending machines, it insists that it will not only take that market but will actually replace the modern convenience store. If you need more than a couple of tweets to dismantle this business plan, you should tighten your prose.

The company is, however, of interest as a case study in the ways that coverage of business and technology often devolves into bullshit. We've already discussed the premise story, where journalists explicitly or implicitly lend credibility to otherwise laughable proposals because those proposals provide an excuse to write about a cherished topic.

Bodega also provides a highly instructive example of the power and appeal of a magical heuristics narrative. While there is no reasonable business logic that can support this model, the mystical argument is quite strong. Both the magic of association and the magic of language play a powerful role.

The narrative is so powerful that it sometimes overwhelms journalists' own experience.

Elizabeth Segran writing for Fast Company:
In most cases, Bodega doesn’t pay for the retail space, but pitches itself as an amenity or a convenience to property managers. At gyms for instance, McDonald makes the case that having a Bodega stocked with power bars and protein powder might make the facility more attractive to members.
And Mike Murphy writing for Quartz:


The cabinets are filled with items to buy that are relevant to where you are at that given moment: In the office, they might be filled with snacks and drinks; at the gym, they could have Gatorade, supplements, and knee braces; in an apartment lobby, there could be detergent, pharmaceutical goods, and perhaps some snacks, too. Whatever makes most sense.
 
Here in Los Angeles, I have a membership at LA Fitness. That's a very big chain in Southern California with lots of locations, and I have hit well over a dozen. Furthermore, since I've moved around quite a bit, I've gone to a number of gyms in Arkansas, Virginia, and Georgia. I won't claim that this constitutes a representative sample, but it is a pretty good cross-section, and in all that time I cannot recall a gym that did not have vending machines that sold items such as energy drinks, power bars, earbuds, and various protein supplements. Many also had stores/cafés/juice bars, but pretty much all had vending machines.

The fact that these establishments already have a machine that sells exactly the same things that McDonald proposes offering in his machines is definitely worth mentioning. It pretty much takes this part of the pitch out at the knees. But Segran and Murphy either ignore or possibly simply don't notice this fact because it undercuts the narrative. These are two ex-Googlers using data and artificial intelligence and machine learning and all-purpose creative destruction to solve problems and disrupt old and sclerotic industries. The fact that many people have already done what McDonald's promising to accomplish does not fit the story at all.

In fairness, there have been journalists covering this story using actual business principles. Eater and TechCrunch have both done good work in this area.

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