A blog about business and economics.

Nov. 21 2014 11:56 AM

[Corrected] How Not to Disrupt Women’s Bodies

Correction, Nov. 24, 2014: Despite the claims of Austen Heinz and Gilad Gome, the founder of Sweet Peach Probiotics later told Inc. that the men had misrepresented her company's mission. This post reflects an impression based on a misrepresented understanding of the company. The company’s mission is to promote reproductive health in women by identifying microorganisms in the vagina and supplying probiotic supplements to help prevent infections. The original post remains below.

This article originally appeared in Inc.

There is, you may have recently read, a new biobro startup project in Silicon Valley. It's called Sweet Peach. (Not a Snapple flavor.) Its mission, apparently hatched by a couple of 11-year-old boys still in the "ew, girl cooties" stage, is to make sure women's vaginas smell "pleasant."

I have so many questions about this!

Why would the people behind this idea—male biotech founders Austen Heinz and Gilad Gome—fix on "feminine odor" as a pressing problem to solve? What terrible smells must these men have been exposed to, in their intrepid startup bro-ing, to make them devote their serious intellectual heft to solving this very important problem? How many women did they consult in their extremely selfless quest to fix gross vaginas?

And, perhaps most important for any straight women they hope to convert into customers (if indeed any such women exist): When will Sweet Peach turn its attention to the problem of male odor and stinky manly genitalia? Will Sweet Peach be followed by Rugged Mist or Leather Smoke?

Sadly, that last question is the only one I actually know the answer to, after reading my colleague Jeff Bercovici's interview with Messrs. Heinz and Gome. Smelly testicles don't appear to be a priority; the next item on their agenda is a probiotic to make cat and dog feces "smell like bananas."

Yep, you read that correctly: These dudes rank women's bodies up there with pet poop. 

I think my favorite part of this pitch is the attempt to position Sweet Peach as "personal empowerment" for women. It's a great marketing line; it's just not very original. Since time immemorial, beauty and feminine hygiene companies have used the promise of personal empowerment to help sell equally reprehensible, if much more subtle, campaigns based around negging women and then offering the solution to all of their bodily imperfections. Or smells. Especially smells. Poor Sweet Peach, trying to put a "probiotic supplement" gloss on what's essentially the boring old douche market. (Pun intended; indeed unavoidable.)

So I'm not particularly surprised by Sweet Peach or its creators' stupendous obliviousness. They're startup bros, after all, pitching their product to a likeminded audience, during a year and in a particular week when the noise surrounding Silicon Valley's respect issues concerning women's bodies is almost deafening.

I still wonder: Who is giving these men the time of day?  Why on earth would the DEMO conference (tagline: "New tech solving big problems") consider the issue of women's bodies—which are, as if this needs to be said, not grosser than any other humans' bodies, and which are possessed by 51 percent of the U.S. population—a "big problem" to solve? Who's giving these men advice or approval of their quest to solve this nonproblem? And, to borrow a line from an adjacent issue, can they please keep their peachy bullshit far, far away from my uterus?

Video Advertisement

Nov. 20 2014 5:07 PM

Pizza Hut Asked a Bunch of Old Italian People to Judge Its Pizza

Pizza Hut has just started a major rebranding effort. Headlined the “Flavor of Now,” the campaign aims to give a much-needed boost to Pizza Hut’s U.S. business by wooing customers with dozens of new pizza options. Why have plain crust when you can make that toasted Asiago? Pepperoni is so boring—how about spinach and a drizzle of honey sriracha sauce?

As part of its marketing push, Pizza Hut has rolled out a series of ads by creative agency Deutsch L.A., the same firm that put together those memorable Ronald McDonald ads for Taco Bell. For the new ads, Pizza Hut is taking its new menu all over—to a bingo night in Boring, Maryland; a softball game in Bland, Missouri; and even to Sorrento, Italy.* (And yes, Boring and Bland are real places.)

The best of the lot is probably the one set in Sorrento, where we watch as a bunch of older Italian people express shock, indignation, and just plain confusion at a variety of Pizza Hut’s new pizza offerings. The group also tests out “other new world” things, like mobile ordering, jeggings, and EDM. “Participants were paid, but still don't like change,” the ad notes in tiny white text.

Sure, Pizza Hut is poking a bit of fun at these people, but it’s also poking some fun at itself. Pizza Hut knows it’s not offering a gourmet product here, and it’s nice to see it embrace that. Then again, Pizza Hut isn’t going all out on the honesty. When Domino’s launched its own turnaround campaign a few years back, it decided to come completely clean. It admitted Domino’s pizza was terrible.

*Correction, Nov. 21, 2014: This post originally implied that Deutsch handled Pizza Hut campaigns in Boring, Bland, and Sorrento. Deutsch is neither that boring nor that bland, and only did the Sorrento ad.

Nov. 20 2014 4:29 PM

Uh-Oh: Administration Overcounted Obamacare Enrollees by 380,000

The Obama administration has acknowledged that it overcounted the number of Americans currently enrolled in health insurance purchased through the Affordable Care Act's online exchanges, Bloomberg reports today. Earlier this month, Department of Health and Human Services announced that 7.1 million individuals were still paying for coverage they bought on the marketplaces last year, down from the 8 million who originally signed up. However, that number included 380,000 people who only bought dental plans. The actual number of Obamacare health-insurance enrollees was closer to 6.7 million.

“A mistake was made in calculating the number of individuals with effectuated Marketplace enrollments,” HHS spokesman Kevin Griffis told Bloomberg. “Individuals who had both Marketplace medical and dental coverage were erroneously counted in our recent announcements."

The error was first uncovered by the Republican-led House Committee on Oversight and Government Reform, and conservatives are, of course, having a field day with the discovery. Obamacare opponents have long argued that while the program beat expectations early on by signing up more than 7 million individuals for coverage, many customers simply wouldn't pay for their plans. Now, they have a bit of vindication on that front, as well as just enough evidence to accuse the White House of a cover-up. Oversight Committee Chairman Darrell Issa—who the last time you heard from him was probably ranting and raving about Benghazi—called today's revelations evidence of "concerted effort to obscure a heavy dropout rate" on the exchanges.

Two points to make here: First, 380,000 sounds like a large number, and it did conveniently push Obamacare's enrollment figures over the Congressional Budget Office's projection of 7 million sign-ups. However, 380,000 also only amounts to 5.6 percent of the real tally, and the 7 million figure was never particularly meaningful to begin with (nothing particularly magical happened if Obamacare reached that milestone, and nothing tragic will happen because the program missed it). And, as Charles Gaba of ACASignups.net told Bloomberg, even with the lower total, Obamacare's attrition rate was still in line with what experts like him predicted. This new news shouldn't especially change anybody's opinion about whether the exchanges have succeeded or not.

On the other hand, this certainly doesn't look good for the administration politically. This seems more like garden-variety incompetence than anything. But that won't stop the GOP from crowing about a conspiracy to make Obamacare look more successful than they think it is.

Nov. 20 2014 1:51 PM

Man Hit With $1,142 in Wi-Fi Overage Charges on Flight From London to Singapore

Last week, Jeremy Gutsche flew from London to Singapore on Singapore Airlines. He purchased a 30 MB in-air Internet package for $28.99. When he deplaned, he was shocked to learn he'd been hit with an additional $1,142.47 in overage charges.

Gutsche, the chief executive of Trend Hunter, a self-described "popular trend community" website, says he racked up a terrifying $1,171.46 bill for in-flight Wi-Fi from provider OnAir. In an initial post on Trend Hunter, Gutsche wrote that he used data to upload a 4 MB PowerPoint and make "155 page views, mostly to my email." He says video, the typical culprit in over-the-top data bills, didn't even play a role—"the Singapore Airlines internet was painfully slow, so videos would be impossible."

Singapore Airlines initially contacted OnAir on Gutsche's behalf but said this week that he would have to pay the full amount. And while there are plenty of horror stories about companies—especially mobile carriers—abusing customers' data charges, Gutsche hasn't elicited much sympathy on this one so far.

OnAir told the Wall Street Journal in a statement that its service terms are "entirely transparent." To use the amount of data that Gutsche consumed, OnAir said, "takes much more than basic email viewing, for example downloading heavy attachments, cloud access and using Skype." (For an easy comparison, a Gmail attachment can be up to 25 MB.) More importantly, OnAir said that a graph constantly shows passengers how much data they've consumed and that those users can choose for their sessions to end at a preset price limit, and/or disconnect at any time.

Gutsche told the Journal he wasn't buying the "buyer beware" argument. "Just because someone agrees to terms and conditions doesn't mean those terms are ethical," he said. "I think the overage model is excessive." Perhaps. But in that case, maybe he shouldn't have risked it in the first place.

Nov. 20 2014 1:48 PM

Which Industries Are the Most Liberal and Most Conservative?

Are movie moguls and media types really the liberal boogeymen of conservative lore?

Absolutely.

Whenever Americans donate more than $200 to a political action committee or federal candidate, they are legally required to file a public disclosure form that, among other details, lists their occupation and employer. States have similar requirements. For several years now, Stanford University political science professor Adam Bonica has been using that data to cleverly chart out the ideological leanings of different U.S. industries. His work will probably confirm whatever stereotypes you've ever harbored about Hollywood limousine liberals or arch-conservative oil men.

To oversimplify just a bit, Bonica measures how far industries skew to the left or right by looking at the where the candidates they back sit on the ideological spectrum, based on legislative voting records. So a business full of people who give money to lefty politicians, like Sen. Chuck Schumer of New York, will register as more liberal than a business that gives to a relative moderate, like Sen. Joe Manchin of West Virginia, even though they're both Democrats.

So, how do industries shape up? A bit like you'd expect. The graphs below, from a 2013 paper Bonica published in the American Journal of Political Science, show how industries lean based on the number of donors giving to candidates on each point of the ideological map. Academia, entertainment, media, tech, and law really do skew to the left. Real estate, banking, mining, construction, farming, and the fossil fuel industries love the right. The pharmaceutical industry, meanwhile, has a bit of a split personality.  

The picture changes a bit when Bonica breaks down industries into smaller sectors and assesses them by the amount of money given, instead of the total number of donors. Take this graph, from a 2010 blog post. Venture capitalists, hedge funders, and investment bankers tended to fall on the moderate left. But insurance companies were solidly on the right. Corporate lawyers were on the far left, but gave relatively little. Trial lawyers were on the far left, but cut massive checks. Lobbyists, predictably, straddled the middle. They know to play both sides.

Nov. 19 2014 4:24 PM

“Typical Starting Salary” Is Terrible Way to Choose a College

I'm on record arguing that it's a good idea to rank colleges, and hold them accountable, for what their students earn after graduation. But salary data can be tricky to interpret in a useful way. And this week, in a piece titled, "Where to Go to College if You Want the Highest Starting Salary," the Washington Post offered up an excellent example of exactly how not to do it.

Using salary data collected by the website Payscale, Roberto Ferdman breaks out the 25 schools that produce the best-paid grads during the early years of their careers. This is not a particularly useful bit of information. First, early-career salary probably isn't as important as what grads make later on in their lives. Second, most of the schools rank highly on the list because they're heavy on engineering students (or produce military officers), who tend to earn solid salaries out of the gate. I've reproduced the list below, with schools that Payscale says emphasize engineering in orange, and the rest in blue.

payscale_1

Jordan Weissmann/Slate

Surveying these results, Ferdman concludes that "the nation's most elite universities—which rank highly on U.S. News and World Report's college rankings list—aren't necessarily places to go if you want the best starting salary out of school."

That's not really correct. If you were actually interested in studying engineering, most of the schools up above would not be among your top choices, based solely on starting salaries (more on that in moment). As shown on the color-coded graph below, of the 18 engineering-heavy schools that made the Post's top 25, only seven also rank in the top 25 for the salaries that their engineering grads earn.

payscale_2_1

Jordan Weissmann/Slate

So who ranks highly on that list? Surprise: It's Ivy League universities like Columbia, Cornell, and the University of Pennsylvania, along with other highly ranked schools such as Northwestern, Johns Hopkins University, Rice, the University of California–Berkeley, and the University of Michigan. Sometimes, the conventional wisdom is pretty much right.1

I'm not pointing this out just to nitpick the work of Ferdman, who typically writes great stuff. Rather, I think it's an illustration of why it's difficult to suss out which schools are really a good value based on post-graduation pay. It depends on the mix of majors at the school. It depends on the socio-economic background of the students. And it depends on whether you look purely at salary, or at salary compared with the cost of tuition and the average debt kids take on. Even if it's worth comparing schools this way, its easy to get it wrong.

Footnote1: As an aside, I don't know whether I entirely believe Payscale's rankings, which are submitted by the site's users and thus suffer from some self-selection bias. 

Nov. 19 2014 1:48 PM

Premed Students Might Be Flying to Guam Just to Take the MCAT

Big changes are coming to the Medical College Admission Test, or MCAT, in 2015. Starting next spring, the MCAT will be overhauled for the first time since 1991. The revised exam will add sections on the social and behavioral sciences as well as more critical analysis and reasoning. The new, more "holistic" test is expected to take six and a half hours, as compared with its current four and a half.

Suffice it to say, current premed students aren't too happy. And those who can are rushing to take (or retake) the old exam before it goes away forever at the end of January. For some of them, that's meant considering extreme steps just to book an available seat—like flying to Guam.

In recent months, multiple forums for premed students have been dedicated to precisely this topic: whether flying to Guam is a worthwhile price to pay for taking the current MCAT exam. Guam is offering the test five times in January; the cheapest flights there are 20 to 30 hours long each way and, from New York, appear to be going for between $1,000 and $2,000 round trip.

Before writing this off as completely crazy, consider that for many premeds, preparing for the revised exam could mean taking extra classes and credits. Those cost money, too. Gary Chen, a junior at Texas A&M, told me earlier this month that it's been "almost impossible" to find a testing location because of the rush to take the outgoing exam. He's booked a flight from Houston to Des Moines, Iowa, to sit for the MCAT and knows other people who are heading to Canada. Chen says he considered Guam but checked the flights and thought they were "a bit too expensive."

Karen Mitchell, senior director of the admissions testing services at the Association of American Medical Colleges, which administers the MCAT, says there are already 50,000 extra tests being offered this year (and in January) over eight additional testing dates. In a typical year, 100,000 tests are given over 28 testing dates. When the AAMC added more than 1,000 new MCAT seats in cities including New York and Boston last week (Michell declined to specify exactly how many), they booked up in a matter of days. She wouldn't comment on whether Guam is seeing increased demand for the test—historical data on that sort of thing is for "planning purposes" only—but said most testing centers are more booked than normal.

From the looks of it, though, that 20-hour flight is only going to get more appealing. The MCAT tweeted on Nov. 12 that no additional dates or seats for the old exam would be added. As of now, Guam still has some spots.

Nov. 19 2014 1:29 PM

It’s Not Your Imagination: Online Stores Do Change Prices

Reprinted from

This article originally appeared in Wired.

You get the same sneaking suspicion every time you book a hotel or rent a car online: With each search, it seems the prices change, and you can’t help but wonder if sites are changing prices for you in particular.

Well, they are—at least in some ways.

A team of researchers at Northeastern University recently analyzed how e-commerce sites tailor prices to specific shoppers based on their digital habits and demographics, such as their ZIP code. According to the study, presented last week at the Internet Measurement Conference in Vancouver, British Columbia, major e-commerce sites including Home Depot, Walmart, and Hotels.com list online prices that are all over the map, and in some cases, these prices are “personalized” to the behavior of particular shoppers, including whether they shop on a phone or on a desktop.

“Going into this, we assumed the project would be risky—that we might not find anything,” says Christo Wilson, an assistant professor of computer science at Northeastern and one of the study’s authors. “There have been incidents in the past where companies have been caught doing this, and the PR was very bad. We thought that sites wouldn’t be doing anything. We were more surprised that we found something.”

According to some companies whose sites were analyzed by the study, its methodology was flawed—and the researchers have admitted to one mistake in the way they handled things. But the study still provides a window into how your shopping experience can change depending how you behave.

Mobile Matters

The researchers recruited 300 people through the crowdsourcing site Mechanical Turk and had them perform product searches on 16 top e-commerce sites. Specifically, the study tested for personalization based on browser (Chrome, IE, Firefox, Safari), operating system (Windows, OS X, iOS, Android), and whether or not a user was logged into his or her online account.

As each person ran the searches—with long browsing histories attached to identifying “cookies” on their machines—an automatic, cookie-less simulated browser ran the same searches at exactly the same time. This, says Wilson, ensured that price differences couldn’t be chalked up to “noise” or variations in timing that might reflect an inventory change or other quirk of the system.

If you shop using your smartphone, the study claims, some e-commerce sites pay attention to what kind of phone you use. Home Depot and Travelocity—whose sites were targeted by the study—deny that they do this, and Travelocity pointed out a flaw in the study’s methodology, which the researchers have since admitted to.

But Travelocity did acknowledge that there are often a handful of mobile-only offerings on smartphones and tablets that don’t show on desktop search results. The tactic is used as incentive for users to download the mobile app. Results aren’t cheaper by design, a company representative tells Wired, but they sometimes are, since Travelocity smartphone users might be looking for a place to stay last-minute.

These results appear to bring down the average price for mobile results, the representative explains. But the company claims the pricing for the same specific properties remain constant across platforms.

Cookies Aren’t Always Bad

There were also times when Wilson and his fellow researchers were able to see other forms of price discrimination on some websites but were unable to get to the root cause of that price variation—notably, on Sears and rental car websites. “We tried different browsers and different platforms. We tried logging in and logging out,” Wilson says. “But it looks like there’s something else in there that we haven’t figured out yet.”

The researchers also say that cookies aren’t always a bad thing. Wilson explains that on sites like Cheaptickets or Orbitz, users who are logged in will often see “members only” prices that can save them an average of $12 on hotels. But if buyers cleared their cookies before conducting the search, they wouldn’t be logged in and wouldn’t see that discount.

One conscious decision Wilson and his colleagues made while executing the research was to avoid Amazon and eBay. Both those venues are online marketplaces, Wilson explains, and sellers putting up their own products—plus used items getting listed on the site—made things too complicated.

The Race to the Bottom

So how do you get the best offer for your money? There’s no one-size-fits-all solution, according to Wilson. “Every site we looked at was doing something different—changing different things based on different information,” he says.

The best advice he can offer is to run searches on all platforms you have access to, if you’re willing to put in the time. That means your regular browser, an incognito browser, and your smartphone or tablet. Then, if you want to be extra thorough, ask a friend or relative in a different ZIP code to do the same thing and see what results turn up.

This tedious shopping is a far cry from the familiar system of clearly marked prices and coupons at brick-and-mortar stores, but it’s all part of digital-age living. We have no choice but to get used to it. “All online retailers are watching each other, and it’s a race to the bottom,” says Wilson. “The only thing that changes between online stores and brick-and-mortar stores is the pace at which that happens. It’s faster online.”

More from Wired:

Nov. 19 2014 11:36 AM

Maybe Pabst Wasn’t Bought by Russians

Back in September, a number of reputable news outlets reported that a group of investors fronted by a Russian beer and soft drinks company, Oasis Beverages, was buying Pabst Blue Ribbon. This led to lots of joking from bloggers—me included—about how a brand that once traded on its blue-collar, all-American image to entice scenesters in Brooklyn, Portland, and beyond before becoming a bit passé was now officially owned by our geopolitical archrivals. 

But perhaps it was all just a great misunderstanding? Bloomberg and the New York Times report that Oasis Beverages was not, in fact, involved in the deal. Rather, Oasis chairman Eugene Kashper, an American citizen, and the San Francisco–based private equity firm TSG Consumer Partners, formed a new company called Blue Ribbon Intermediate Holdings to purchase the brewer. Meanwhile, Kashper resigned from Oasis in November to take the helm at Pabst, according to Bloomberg.

This is all a bit strange. The initial press release announcing the deal very clearly stated that "Oasis Beverages has entered into a definitive agreement to acquire Pabst Brewing Company." I, for one, have never heard of a press release for an M&A deal that announced the wrong buyer, and so far, nobody has explained what went wrong. The Times tries to fill in where some of the confusion might have come from:

Mr. Kashper was discussing a distribution agreement with Oasis that would introduce Pabst to the Russian and Eastern European markets. There were also discussions about selling Oasis a minority nonvoting stake in Pabst.
Those talks broke down because of market conditions—namely the fact that Western nations are imposing sanctions on Russia in response to its aggression in Ukraine, making this an inopportune time to introduce a distinctly American beer. And Oasis was never in talks to acquire Pabst outright.

In the end, this might all be something of a distinction without much of a difference. As the New York Post wrote in its own September story about how Pabst wasn't really falling into Russian hands, Kashper was brought to the United States at age 6 when his Jewish parents fled the Soviet Union. He founded Oasis, which lists its address in Cyprus (a favorite tax haven for Russian oligarchs) in 2008, and the company does business in Russia, the Ukraine, Kazakhstan, and Belarus. But he says he has lived in New York City for the past dozen years. So Pabst is now run and partly owned by a Russian-American businessman who presumably made a lot of money brewing and distributing beer in a very corrupt part of the world.

Also, it doesn't really matter. Pabst is still barely acceptable beer that most of us will continue to drink if it happens to be that absolute cheapest swill available at the bar.

Nov. 19 2014 9:47 AM

America’s Awful College Dropout Rates, in Four Charts

America's nagging problem with college dropouts managed to get the tiniest bit worse this year. The National Student Clearinghouse reports that 55 percent of first-time undergraduates who matriculated in the fall of 2008 finished a degree within six years, versus 56.1 percent of those who began in fall 2007. Keep in mind, we already had the lowest college completion rate in the developed world, at least among the 18 countries tracked by the Organization for Economic Cooperation and Development. Much like American health care, American higher education continues to set a global standard for inefficiency.

Our dropout crisis doesn’t get discussed a great deal outside of education circles. But it should, since the issue is directly tied to other problems the public rightly obsesses over like rising tuition and student debt. Lots of Americans take at least a few college classes, which stretches state resources thin and drives up costs for everyone. But because relatively few finish their degrees, we get poor bang for our buck compared to other countries. And since dropouts are much more likely to default on their student loans, both borrowers and taxpayers end up suffering.

So it’s worth taking a close look at where and how the dropout problem is concentrated in the education system. Here's the simple way to think about it: Traditional students—kids enrolled full time at four-year colleges by their 20th birthday—are very likely to finish school. Nontraditional students—pretty much everybody else—aren't. 

According to the NSC, only 39.6 percent of undergrads attended full time during their whole stint in school. They fared well: More than three-quarters of them finished up their degree within six years. On the other hand, the 53 percent of students who attended both full and part time struggled. One-third had dropped out entirely. Meanwhile, almost a quarter were still taking classes. Given that few students who spend more than six years in school finish, chances are most of them will drop out as well.

Now let's take a look at age. Of those who started school at age 20 or younger—as 76 percent of 2008 enrollees did—about 59 percent complete a degree. For older students, graduation rates were closer to 40 percent.

As you might expect, students at public and nonprofit four-year institutions—about 59 percent of the cohort—had far higher graduation rates than undergrads at two-year schools. A lot of this is self-selection: If you're prepared to go seek a bachelor's degree, chances are you're better prepared to stick with higher ed. An enormous fraction of students at two-year schools aren't prepared for college-level work and end up stuck in remedial classes, which lengthen the time to degree and make it less likely they'll ever finish.

But even at four-year institutions, the distinction between full-time and part-time students still matters. Taking a few classes while working simply isn't a very realistic path to a degree for most people.  

Again, we have a higher education system that works fairly well for the traditional college student—the teenager who shows up on campus ready to dedicate the next four to six years of their lives to school. But a very, very large chunk of American undergraduates don't fit that profile. They're older, juggling classes and a job or family, and not necessarily up to speed academically. Our education system isn't built to cater to their needs, and its results are extremely wasteful.

READ MORE STORIES