March 22, 2023

Strategies: With a Tweet, Twitter Starts a Debate

The Beatles put those coy words on vinyl half a century ago. When the song “Do You Want to Know a Secret” went to the top of the charts, any intimate secrets it may have contained were shared with millions of people, but no one seemed to care. It was a charming love song.

Now Twitter is showing that an updated version of the old Beatles playbook can be an effective P.R. strategy, at least for a while. While the company has come under some criticism for being coy, it has managed to spread the news of its initial public offering of stock without revealing much about its plans or its finances. In the process, it has become the most prominent example of a company making use of bipartisan legislation enacted during the 2012 presidential campaign season with promises that it would spur job creation by small businesses.

“We’ve confidentially submitted an S-1 to the S.E.C. for a planned I.P.O.,” Twitter declared publicly on Sept. 12 in a not-so-secret message sent on its own network. And it added some boilerplate: “This Tweet does not constitute an offer of any securities for sale.”

The news of the paradoxically secret I.P.O. went viral.

The company has made no other public comments about the offering, although it has reportedly engaged Goldman Sachs to serve as an underwriter. Except for that one tweet, Twitter has taken advantage of the cone of silence offered by the “Jumpstart Our Business Start-ups Act,” commonly known as the JOBS Act, the 2012 law that also takes innovative approaches to small-business issues other than I.P.O.’s.

The law, for example, includes provisions intended to encourage the crowdfunding of small businesses. And starting this week, it is scheduled to allow hedge funds to advertise to the general public for the first time. But regulations for many of its provisions are not yet in place. The I.P.O.’s nondisclosure provision is the most widely used part of the law so far.

It became law on April 12, 2012, in the middle of a tight presidential campaign that often revolved around the state of the economy and a glaring shortage of jobs. President Obama signed the bill with the explicit promise that it would henceforth be easier for many companies to go public. “That’s a big deal because going public is a major step towards expanding and hiring more workers,” Mr. Obama said during a signing ceremony in the Rose Garden. The bill would be “a game changer,” he said.

“It’s a big deal for investors as well,” he added, “because public companies operate with greater oversight and greater transparency.”

In the initial stages of going public, though, many companies have been using the JOBS Act to limit transparency. That’s because the law allows what it terms emerging growth companies to file an I.P.O. without publicly disclosing details about the business. That’s the provision Twitter used. It defines emerging growth companies as those with annual revenue of less than $1 billion, which is a very broad interpretation.

As of April, on the law’s first anniversary, 63 percent of all companies filling I.P.O.’s during the new law’s life used the confidentiality provision, according to a survey by Ernst Young. Nearly all companies that have had I.P.O.’s in the last 30 years would have been able to use the provision, had it been in place.

From 1980 to 2012, 94 percent of American companies that have gone public had revenue of under $1 billion when they filed for I.P.O.’s, according to data compiled by Jay Ritter, a University of Florida professor who is a leading expert on initial offerings. “Under that criterion, most I.P.O. companies would be classified as ‘emerging growth companies’ worthy of special help,” said Professor Ritter, who opposed the enactment of the JOBS Act.

THIS part of the legislation was intended to protect tender entrepreneurial firms from prying eyes that might deter them from going public and growing to maturity, said Kate Mitchell, a former chairwoman of the private I.P.O. Task Force, which played a role in the formulation of the legislation. She is also a former chairwoman of the National Venture Capital Association, which lobbied heavily for the measure. “For better and for worse, I helped draft that bill,” she said in an interview.

Under the nondisclosure provision, the financial secrets must eventually be revealed. Companies that offer shares to the public must make an open I.P.O. filing to the Securities and Exchange Commission — typically, 21 days before they begin a public-relations campaign to drum up support for their impending offering — that will be visible to all investors before they buy shares. Ms. Mitchell said the law was intended to help small, struggling companies expand and have an easier “on-ramp” to an offering.

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You’re the Boss Blog: Why We Are Hiring Outsiders to Critique Our Performance

Hoi-Sun Tong (left) and Franya Barnett (right) are Vanessa K. Rees Hoi-Sun Tong (left) and Franya Barnett (right) are “process rhinos.” Sonu Panda is co-founder and chief operating officer.

Building the Team

Hiring, firing, and training in a new era.

Sonu Panda is an animal.

As co-founder and chief operations officer of H.Bloom, Mr. Panda is maniacally focused on the minute details of our business. His mission is clear: to make sure that each delivery that we make is a luxurious experience for our customers. To aid him in his quest, he is building an internal consulting group made up of folks who carry an unusual title: process rhino.

In a column for Forbes called The Rhino Principle, Paul Johnson described the rhinoceros as single-minded: “When it perceives an object, it makes a decision – to charge. And it puts everything it’s got into that charge.” Our process rhinos are putting everything they’ve got into analyzing the daily processes that enable H.Bloom employees to buy the best flowers, design exquisite living art, produce remarkable arrangements and deliver those arrangements to our corporate and consumer customers.

If you are wondering why I’m writing about Mr. Panda and rhinos, it’s about training. In my last three posts, I’ve written about our fundamental belief in gaining a competitive advantage through practice, how we facilitate management classes, and how we emphasize the lessons learned in those sessions. Today, I want to describe the dedicated team that we are building to identify and document the best way to do things at H.Bloom. The playbook that they create will enable us to provide better training to our team. And, it is with better training that we will ensure we deliver the best products and services to all of our customers.

In the first of the these posts, I referred to our SEED Program, where we train aspiring business leaders to run the operations of future H.Bloom markets. Today, graduates of the program manage four of our five markets, and we have another four folks in the program currently. Until now, though, the training has focused almost exclusively on the job, rotating trainees through all aspects of a market’s operations and shadowing the existing market manager. It has been learning by doing.

The ideal training program would provide SEED participants with a playbook, enumerating every process that happens within an H.Bloom market and identifying the right way to do things. Practice makes perfect only if you are practicing how to do things perfectly. We needed to take the time to analyze our operations, but everyone involved in our operation was already working at full capacity. In order to analyze the processes and build our playbook in a meaningful time frame, we needed a dedicated team to do it. So, we are creating a team of internal consultants — our team of process rhinos.

We are hiring these folks from outside of the company, so that they bring an unbiased perspective when determining whether processes are optimal. Instead of coming from a background of deep experience at H.Bloom, these new full-time employees will apply the Socratic method of asking question after question until they identify our best practices. We rationalized the additional expense of this team in a very straightforward way. First, if we build a team of process rhinos, and they help us expand rapidly to cities around the world, their amortized cost will be negligible. Second, if their work to build the playbook has a positive impact on the rate at which we expand to new regions – directly affecting the slope of our revenue growth – the investment will be well worth it.

Here’s the plan that Mr. Panda has laid out: Examine existing operational processes. Document those processes with great detail. Seek feedback from all stakeholders to determine the best ways to do things. Roll out the new procedures to all markets. Track what happens. Build a new training curriculum for SEED participants.

With a playbook, all employees in an operational role will train faster, retain more, and have fewer on-the-job questions. Moreover, our SEED participants will now have a formal curriculum to augment the on-the-job training. This is particularly important as we begin to accelerate our expansion in the coming months.

Mr. Panda has already hired two of the rhinos, and he is actively looking for a third. The profile of the ideal candidate is simple – someone who is smart and has the ability to synthesize a lot of information and then can disseminate new standards across the company. The person will also have to be ready and willing to work hard.

If all of this works, we will deliver a better product and better service to our customers. We are making a big bet on training, and with this internal consulting group, we are investing in the people and playbook to ensure that we train well. Now that Mr. Panda has hired a team to develop our playbook, he meets with them weekly for status updates, but otherwise, he gets back to his role as C.O.O. and gets out of their way.

Once you find a team of rhinos to analyze and optimize your processes, it’s best not to get in the way of their charge.

Bryan Burkhart is a founder of H.Bloom. You can follow him on Twitter.

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Advertising: Old-Fashioned Flattery From Fierce TV Rivals

The networks are taking a page from the cable playbook and scheduling series that run for fewer episodes than 22, their standard order. Rather, what the networks are calling “limited series” or “event series” will play for 12 to 15 weeks in a row without the repeats or interruptions that drive viewers crazy — and also drive them from broadcast to cable, which adopted the concept of limited series decades ago.

NBC and Fox described plans for such shows on Monday, as the upfronts week began in New York, with limited series that will include a return of “24.” ABC chimed in on Tuesday with a limited-run drama, “Betrayal.”

On Wednesday, CBS — known for traditional formats as typified by its procedural crime dramas like “CSI” and “NCIS” — said it would embrace the idea with “Hostages,” a limited series about a murky conspiracy with a doctor, played by Toni Collette, in its cross hairs. The show will be shown at 10 p.m. on Mondays, starting in September, and run for 15 episodes, either consecutively or taking a short break around Christmas.

After the conclusion of “Hostages,” a spy drama, “Intelligence,” with Josh Holloway of “Lost” as its star, will take over the time slot for 13 weeks. (CBS plans to offer another limited series, “Under the Dome,” during the summer, before the 2013-14 season starts.)

At the same time, cable channels are increasingly emulating the “broad” aspects of what the broadcasters do by picking up series meant for wider audiences.

For example, at a presentation on Wednesday, executives from the TBS and TNT cable channels described series they are scheduling or have in development from crowd-pleasing performers and producers like Michael Bay, Jerry Bruckheimer, Cee Lo Green, Howie Mandel, Dick Wolf and Dwayne Johnson, the actor known as the Rock.

The crisscross between cable and broadcast comes as the demarcation line between the two is growing increasingly blurry. Viewers watch programs on smartphones, tablets and laptops as well as TV sets.

An announcement by the TBS and TNT executives underscored that trend: beginning in the summer, both channels will enable cable subscribers to watch live programming streams through two new apps, Watch TBS and Watch TNT, as well as on the TBS and TNT Web sites. The day before, ABC said that it would begin testing with Nielsen a method of measuring commercials watched on tablets and smartphones through mobile apps.

Still, as interested as the networks may become in event series, there could be limits to their ardor. Nina Tassler, president for entertainment at CBS, told reporters at a breakfast briefing that as a general rule, CBS believes in full orders of 22 episodes, or with especially popular shows, 24.

“Our viewers want more episodes, not fewer episodes,” she said. “We don’t need place fillers.”

CBS executives originally asked the producers of “Hostages” for the usual 22 episodes, Ms. Tassler said, but agreed on a limited run of 15 when the story line for two full years was outlined to them. It is good to provide viewers with “more originals, fewer repeats,” she added.

Skepticism about event series on networks was expressed in jocular fashion by Jimmy Kimmel, in his annual monologue at the ABC presentation, during which he mocks the ritual of selling new, unknown shows to advertisers.

At ABC, said Mr. Kimmel, the host of “Jimmy Kimmel Live” on the network, “we’ve been doing limited series for years: ‘666 Park Avenue,’ ‘Last Resort,’ ‘Don’t Trust the B in Apartment 23’ — all limited, very limited.” (Those shows were flops for ABC during the 2012-13 season.)

Mr. Kimmel’s jape got at a truth: ABC’s mediocre ratings this season mean that it will place fourth among the big four networks, behind CBS, Fox and NBC. ABC ordered more than a dozen new series for 2013-14 in hopes of rejuvenating its schedule, and spent several minutes of its presentation praising them as well as digital efforts like Watch ABC, its new live-streaming app for local stations.

Mr. Kimmel did not limit his jokes to his own network. Perhaps he was trying to pre-empt CBS when he called the network’s chiefs “smug,” followed by an unprintable slur, during his routine. The contrast between the two networks — one anxious, the other confident about keeping its victory streak going — could not have been more apparent as they talked up their new schedules to advertisers.

That was telegraphed by Leslie Moonves, the CBS Corporation chief executive, during the breakfast briefing. “We were very flattered when Jimmy Kimmel called us smug,” he said, repeating the unprintable word. “That must mean we’re winning.” (Mr. Moonves, for the record, said that CBS would try to act less smug.)

Despite whatever borrowing may be taking place between networks and cable channels, they remain competitive, and during their presentation, CBS executives boasted about the power of broadcast television.

Mr. Moonves had just one thing to say about cable during the presentation. After the cast of “How I Met Your Mother” — the popular CBS sitcom that will in the fall begin its final season — performed a skit, he joked, “I’d like to see the cast of ‘The Walking Dead’ do that.”

Thursday, the final day of the upfronts week, will bring presentations by the CW broadcast network and the USA Network cable channel. After that will be the negotiations between the television companies and Madison Avenue over rates for commercials to run during the 2013-14 season.

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DealBook: Icahn Takes Stake and Netflix Shares Surge


We have seen this movie before, though the ending this time is unclear.

The billionaire investor Carl Icahn announced late Wednesday that his hedge fund, Icahn Capital, had acquired a roughly 10 percent stake in Netflix. The news caused shares of the media company to soar as much as 22 percent. Toward the close, the stock was up 14.4 percent, at $79.60.

In a filing with the Securities and Exchange Commission, Mr. Icahn said that he thought Netflix was undervalued and suggested that it could make a strong acquisition candidate for a larger entertainment company.

“The reporting persons acquired the shares with the belief that the shares were undervalued due to the issuer’s dominant market position and international growth prospects,” said the filing. “The reporting persons believe Netflix may hold significant strategic value for a variety of significantly larger companies that are engaging in more direct competition with one another due to the evolution of the internet, mobile, and traditional industry.”

The filing by Mr. Icahn is the latest in a string of activist positions taken by the 76-year-old investor. His playbook consists of accumulating a large stake in a company and then agitating for change.

Mr. Icahn has recently had a mixed track record with his large activist positions. He won seats on the board of Blockbuster, only to see the movie-rental chain end up in bankruptcy in 2010. A more successful investment was in ImClone, accumulating stock in the low $40s, taking over as the biotechnology company’s chairman, and then selling it to Eli Lilly for $70 a share in 2008.

More recently, last year Mr. Icahn failed in his bid to force a sale of the consumer products giant Clorox. After he put the company in play with a $10 billion bid, Mr. Icahn acknowledged that he lacked the support of Clorox shareholders to get any deal done.

Mr. Icahn hopes to have better luck with Netflix, the Los Gatos, Calif.-based company started by the entrepreneur Reed Hastings. Netflix’s stock, before Wednesday’s news, had dropped about 75 percent from its 2011 peak. Even though the company recently reached a milestone, streaming video service into 25 million homes in the United States, investors have sold Netflix shares as its growth has slowed in recent quarters.

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Financial Times Introduces Web App in Effort to Bypass Apple

PARIS — The Financial Times on Tuesday introduced a mobile Web application aimed at luring readers away from Apple’s iTunes App Store, throwing down the gauntlet over new business conditions that Apple is set to impose on publishers who sell digital subscriptions via iTunes.

A number of publishers have expressed their displeasure with Apple’s plan to retain 30 percent of the revenue from subscriptions sold on iTunes, and to keep customer data from such sales, beginning at the end of June. At the same time, mobile applications are a fast-growing source of new readers and revenue, so publishers have been reluctant to pull their applications from the iTunes store.

The Financial Times, the British daily, has tried to get around this problem by designing a new app that includes much of the functionality of an iPad or iPhone application, while residing on the open Web. It employs a new Web technology standard called HTML5, which allows programmers to create a single application that can run on a variety of devices, including Apple’s iPhone and iPad, Google’s Android system and the BlackBerry PlayBook, although the new app does not work on some versions of the devices.

The Financial Times said it would encourage users of its iPad and iPhone applications to migrate to the new app. It said it did not plan to comply with Apple’s proposed conditions, even if that meant Apple removed the existing applications from iTunes.

“We don’t quite know what will happen,” said Rob Grimshaw, managing director of “We’d love to keep our app in iTunes, but it may be that they will block our app at the end of the month.”

Mr. Grimshaw acknowledged that it was taking a risk, given that mobile customers, the large majority of them iPhone or iPad users, already account for 15 percent of The Financial Times’s digital subscriber growth. Over all, The Financial Times has 224,000 paying customers to its Web site and mobile applications.

At present, those subscriptions are sold as a single package, offering access via a mobile device or a desktop computer. Publishers say cross-platform subscriptions may become more difficult to offer if Apple goes ahead with its plan.

Under the proposal, Apple would keep 30 percent of revenue generated by subscriptions that originate via iTunes, including cross-platform packages, while publishers would continue to collect 100 percent of revenue from sales via their own sites.

Some publishers offer stripped-down, mobile versions of their sites, but these are often less sophisticated than their applications, making it more difficult to justify charging subscription fees for them. While The Financial Times is challenging Apple, a number of magazine publishers have struck agreements to sell subscriptions via iTunes, largely on Apple’s terms.

“If you’re depending on impulse download, the tablet experience and the ease of payment to get people to pay for your product where they never paid before, paying Apple 30 percent of something may be better than keeping 100 percent of nothing,” wrote Benedict Evans, an analyst at Enders Analysis in London, in a blog posting.

Apple did not respond to a request for comment. On Monday, the company announced a new app called Newsstand, which will group digital newspapers and magazines together in a single place.

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