Pacific Northwest-Coast Bias

I recently came across a site created by Mint.com that anonymizes and aggregates users spending behavior. Data.Mint.com allows the public to access its data on consumer spending habits in a searchable and sortable format.

I wondered, what sort of insights can one glean from this data? I have a list of some pretty interesting analyses to do, but I thought I’d start out with an easy question:

Which Bellevue Restaurant is the most popular.

“Most popular” is a pretty subjective superlative. But Mint’s data has a pretty non-subjective measure of popularity: # of unique visitors who have made a purchase at a particular location. That’s the criteria I used for this analysis.

Two restaurants came out on top of Mint.com’s visitor index: Las Margaritas and Sideline Sportsbar.

At first, I was quite surprised by the restaurants that topped the list. I thought for sure that some of the bigger-names in Bellevue would top the list over a couple of dive bars. Re-examining the criteria, cozy bars in high-traffic areas are exactly the type of restuarants that would have the highest unique visitor  traffic. Not surprisingly, Ooba Toobas is also high on the list.

Wild Ginger, the type of restaurant that I would hypothesize being at the top of the list, did rank in the top ten (8/10 on Mint.com’s index). Tap House Grill was among the top 4. But it’s clear that lower-cost bars are “more popular.”

Also: note that a lot of national chains and Seattle Restaurants aren’t on Mint’s list. I’m ok with that. I’d prefer to examine local restaurants anyway.

Which restaurants are least popular?

I’ve never been to Ebru Mediterranian Grill. Maybe it’s a gem of a restaurant that few have discovered. But it’s the lowest-ranked restaurant in Bellevue, a 2/10 on Mint.com’s index. Based on this, I’m not too interested in venturing out for a meal here.

Fortunately, I haven’t eaten at any of the restaurants near the bottom of the list. Maybe I have good taste. Or maybe “Halal Meats” just isn’t my thing.

If you’ve tried one of the least popular restaurants, leave a comment.

Which restaurants are most expensive?

This isn’t too hard to guess. Daniel’s Broiler tops the list at an average check size of $115. Seastar is second at $73.

Interestingly, the priciest restaurants all fell between 4-7 on Mint’s visitor index. Their steep price and lengthier dining experience keeps them from serving more customers.

Biases in the data

There are plenty of biases in Mint’s data that I accepted. The type of person that uses Mint doesn’t match the demographics of Bellevue. Mint users are Internet savvy and budget-conscious.  My guess is that Mint skews young, urban, and male. But, it’s still has a great dataset that I hope to explore more.

Last April I posted how ships coming into the Puget Sound appeared much fuller than last year. In November, I re-visited Marrowstone Island and was able to observe the frequency and cargo of container ships. Things are stabilizing…

November 2010 cargo ship:

Similar boat, April 2010:

You can count the cargo containers, but the results are similar. They’re stacked 6-high on each boat, with similar tapering towards the front of the boat. It appears cargo ships are using the same capacity per boat.

But what about frequency of boats? I counted the same number of boats (2) in both April and November. No signs of weakness, nor signs of strength.

When the boxes are stacked 7-high, or carriers add a 3rd boat per day, we’ll know things are improving.

I got a CD in the mail from Turbo Tax this week. It looks like free software, but it’s not. It’s the same software you can get in stores or access online. You must pay for it.

It really is great marketing. I thought it was free software, but it’s $60 for the basic version of Turbo Tax, with the convenience of having the CD delivered in the mail.

For Intuit, the makers of Turbo Tax, it may be a profitable strategy. Turbo Tax usually has a price point of $35 – $40 in stores, so this price represents a ~$25 premium. Plus, they lock in customers before they have a chance to use another service. Brilliant.

Plus, taxes are on the mind of the American public. With the house and senate debating extending the Bush tax cuts, the entire country has taxes on their mind about 4 months early.

We’ll see if it pays off for Turbo Tax. If it does, you can expect to see more software delivered in the mail… that you have to pay for.

Inside of the direct mail after the jump

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Here’s a great breakdown of where your tax dollars are spent. Not surprisingly, Social Security, Medicare, and Medicaid top the list. Over 5% of your taxes are for interest payments on the national debt. Military expenditures make another big bucket of spend, higher than social security when each bucket is added up. The sad part is, most people think Foreign Aid is a big expense (it’s not – under 1% of taxes).

If only each family’s share of the National Debt and future obligations were represented here, we’d have the real picture (about $400K/couple all-in).

I’m a big fan of buying locally. For items like food at a farmer’s market, there are huge benefits to the buyer, seller, and community:

• Buyer: Healthier food that has not been siting in a warehouse or trailer bed for days or weeks
• Seller: Lower costs of shipping and disintermediation
• Community: Stimulates local economy by keeping more money in the community; reduces externalities like fossil fuels

While Seattle has double digit farmers markets, there isn’t a similar rally around other products and services based in the Seattle area, especially for big, locally-based companies. The number of iPhones in this town is shocking, as Seattleites spurn local companies HTC, Microsoft, and T-Mobile. Nobody’s selecting their airline tickets based on if the plane is a Boeing or Airbus. People weren’t flocking to wear Eddie Bauer during the company’s recent struggles.

While the benefits of “Buy Local” aren’t as big or obvious for products other than food, the community benefits just as much. It keeps more money in the local economy. It generates more jobs, keeping the local economy healthy. And a healthier Seattle economy reduces unemployment, increases salaries, and improves home values.

Buying locally doesn’t always make sense. For instance, if the price is significantly higher, your personal cost might outweigh the benefits to the community. But in instances where there is little/no cost difference, “Buying Locally” is the way to go.

I’ve already been instituting a change. When I moved here I got a T-Mobile phone. Bing is my default search engine. And my shopping on Amazon.com has increased, to the detriment of other ecommerce sites. Can I go further? Sure. But it’s a good start.

In the world of work, there’s usually a defined process for hiring someone:

1. Create a job description, including both the responsibilities of the role and the desired skillset of the person to be hired
2. Review hundreds of resumes
3. Interview the top X candidates
4. Invite a select few back for further interviews, testing, background checks, and reference checks
5. Hire the top candidate (if found)

However, in the sports world, this is rarely followed. The process is almost the exact opposite:

1. Identify top candidate available based on no criteria
2. Interview top candidate
3. Offer top candidate the job

There are almost limitless examples of teams that have done this. My favorite example is Billy Donovan, who was #1 on the list of the Orlando Magic back in 2007. He was interviewed and immediately hired, only to have a change of heart, forcing the Magic to go to #2 on their list and hiring Stan Van Gundy 4 days later. Do you think the Magic had a chance to interview other candidates and really survey the coaching landscape, looking for the next best hire?

Similarly, the Washington Redskins had Mike Shanahan picked out as their desired next head coach before Jim Zorn was even fired. The Rooney Rule, which requires teams to interview at least 1 minority candidate before making an official hire was followed. The Redskins gave a courtesy interview to Jerry Gray, secondary coach. But their mind was already decided.

College sports work a little differently than the pros, where the coach is basically a mercenary, brought in to lead the paid troops, and discarded quickly for poor performance. In college, having stability at head coach is critical to recruiting as well as fundraising. Typically a search process is followed where more candidates are considered and interviewed.

Take for example, the 2001 Ohio State Buckeyes, who publicly interviewed 5 candidates before deciding upon Jim Tressell. The parade of the 5 candidates in the public was a great way to get additional feedback from across the university before making the big decision. Another easy example is at Nebraska, where over several weeks the team interviewed 5 coaches and decided upon Bo Pelini.

While the two examples cited above were successes, sometimes the interview process is more of a routine than a process. The Auburn Tigers hired Gene Chizik over highly regarded Turner Gill after the 2008 season, causing an uproar in the college football community. Fans questioned how Auburn could hire the coach with the worst credentials (Chizik) over the best credentials (Gill). Some cited racism.

Which brings me to my main point: I’m pleased with the way the Mariners filled the gap after firing Don Wakamatsu. Question the firing all you want, but the Mariners used a good approach after the firing.

By literally “calling up” Daren Brown from AAA to lead the Mariners on an interim basis, they’ve given themselves time to conduct a thorough process to hire the manager for 2011. Brown is not likely the full-time replacement as he has 2 strikes against him: 1) Never played in the majors 2) Is a former pitcher.

Some fans say if they knew they were firing Wakamatsu, they should have nabbed Buck Showalter while he was available. (Showalter was hired two weeks ago by the Orioles.) However, this is the wrong thinking. The Mariners need the right manager for this point in their lifecycle. They’re going to have a lot of young talent on the roster next year that will continue to need to be developed. An interim manager gives Jack Zduriencik time to come up with the job description, thoroughly vet candidates, and conduct interviews.

This process is increasingly catching on in MLB. The Arizona Diamondbacks promoted bench coach and former Tiger Kirk Gibson to be interim manager, and the Marlins promoted AAA manager Edwin Rodriguez to the interim post.

Let’s hope Jack Z hires the right guy for this stage of the Mariners instead of the right guy at the wrong time – Wakamatsu.

Facebook isn’t listed on the NYSE or NASDAQ. But you can find the company on Sharespost, a secondary market for private companies where stock grants are actively traded.

The idea is intriguing. Current and former employees are loaded with shares that may be worth something someday. But until then, they’re left with few options to liquidate their shares. Sharespost is the answer.

Sharespost is like a Craigslist for stock in private firms. You can post an offer to buy shares at a price, or post your shares to sell. Sharespost facilitates the trade.

Tesla was one of the companies listed on Sharespost before it went public at the end of June. Back in February, someone bought shares of Tesla for $9 per share. Since the company went public, you can get shares more easily on NASDAQ, but it will cost you $22 per share. The bold trader from February doubled up in 4 months.

If you want to buy a share of Facebook today, there are plenty available at $75 per share. But that’s an implied valuation of $33 B. Facebook’s last round of fundraising pegged the value at $10 B, so it’s quite a premium. However, as Facebook’s valuation has been trending, it might be the perfect time to buy.

Last summer Lending Club offered $50 for signing up for an account and trying out their service. It’s a pretty simple concept – consumers looking for a loan can go directly to investors and skip the middleman – the bank. I liked the concept, and I gladly signed up for $50 free.

I wasn’t really sure to expect. I thought there could definitely be negative selection, as people looking to borrow may be doing so as a last resort (maxed out credit cards and turned down by banks). However, they must submit to a credit check and income verification through the site, so there are plenty of safeguards.

With my $50, I decided to invest in 2 loans for $25 each. Here are the lucky folks I chose…

• “I’m writing requesting for a loan as a down payment on a house. I’m the perfect candidate for a loan because I’m a responsible individual financially and this is evident when you check my credit report. I just qualified for an FHA loan and they need 3% down which I currently don’t have and this is why am looking to borrow money.”

This guy had a 700 credit score and no outstanding delinquencies, so I felt he was a pretty good risk. However, I don’t think he’s making good financial decisions. If you don’t have a measly 3% to put down on a house (banks require 20%), you’re probably not ready to buy. What happens when the furnace goes out or you need a new roof? However, with a good credit track record, I felt that he was worth the risk, especially at a 14% interest rate.

• “This loan will be used to payoff a fairly high interest personal loan that I used to payoff very high interest rate credit cards. All of my credit card accounts are paid in full. I have an excellent payment history on all revolving and installment accounts, always paying on time or early.
  My monthly living expenses amount to 18%-22% of my monthly net income.
  My job is very stable, having been employed in the IT department of a state university for 22 years.”

This guy had several good things going for him in his loan application. A stable job. 730 FICO score. And the money was going for a fiscally responsible purpose – debt consolidation. The 10% interest loan is probably a better deal than he’d get at a bank, which he’d qualified for anyway, so I decided to make the plunge.

—

The results so far have been very positive. Both debtors have made all their interest and principal payments. The home buyer’s credit score has actually improved, possibly directly due to the housing purchase, but good news nonetheless.

I would definitely consider investing more money in Lending Club. It’s pretty cool to be a part of the underwriting process, choosing your risk level, and receiving a much higher interest rate than the sub-1% banks are offering. I’ve heard some horror stories, but those were usually by the applications with terrible credit scores.

If you want an invite to lending club with a deposit bonus, leave a comment.

First of all, I must say that Bloomberg has done a tremendous job turning around Businessweek. The magazine was completely stale, with short, trite articles in the beginning, and boring, shallow articles in the middle. At the end, the investing tips were worth what I paid for the magazine (about $0.25 per issue).

Now, the articles are deep and the content is rich. I had no idea a periodical could be turned around that fast. I plan on re-subscribing.

Speaking of which, I got this offer in the mail from Bloomberg Business week. It is brilliant on so many levels.

• Most importantly, the pitch is terrific. “Potential Tax Benefit Enclosed.” What better way to get a business person to open the envelope. That alone must put it among the most highly opened letters for its demographic.
• On a deeper level, the pitch resonates with professionals. Why didn’t the old Businessweek ever pitch the magazine this way? It’s a great way to discount the price of the magazine, but at the expense of Uncle Sam.
• Speaking of discounts, there is none to speak of. You can find this magazine via an online discount site for about $5 for a year’s subscription. Here, they’re asking for $50 – 10X the price. But to a professional, they’re thinking they want to get the tax write-off and this is the only way to get it. So they buy.
• $0.18 to mail the letter? That’s one of the cheapest prices I’ve ever seen. Credit Card offers usually pay a higher amount. Bloomberg knows how to play the game.

All in all, a fantastic piece of direct mail, even without fancy graphics or colored paper.

I love gum. Orbit is among my favorite brands, and I was taken aback by their new packaging.

I was in Target and Orbit was on sale – $2.00 per package (contains 3 packs). I grab a pack and start to walk away, but I see, in the upper right hand corner, the package making me an offer I couldn’t refuse. “Buy 3 & Save.” You can never have too much gum, so grabbed two more packs and headed to the checkout.

On my way there, I realized my error. It wasn’t saying buy 3 packages. It was saying that the package has 3 packs in it, which is cheaper than buying 3 individual packs. Clever.

In the end, I bought three packages (of 3), which left me with 9 individual packages of gum. It was a pretty good deal for my favorite gum, so no harm, but it did make me tip my hat to the folks at Orbit who pulled forward my purchases, and perhaps prevented me from buying a competitor’s product in the meantime.