Thriving in the face of change: 3 business lessons from Pokémon Go

Pokémon Go is a free-to-play location-based mobile game available on iPhones and Android devices.

The game allows players to capture, battle, and train virtual creatures, called Pokémon, who appear on device screens as though in the real world. It makes use of GPS and the camera of compatible devices.

The game’s been out a week, and it’s a huge hit. But, a lot of people – including business people – seem downright hostile to the game. Big mistake!

The unexpected success of this game provides three lessons for businesses faced with change and innovation.

Lesson #1 – Accept. It’s natural to have a gut reaction to new things. Often that gut reaction begins with “I don’t understand it.” The next gut reaction is, “I don’t like it.” My Facebook feed is filled with grumpy folks telling Pokémon hunters to go home, get a life, or get a job (or all three).

It doesn’t matter if you like Pokémon Go. It’s here. And it’s here to stay. It might be a summer fling, or it might be around for a while. Bell bottom trousers were a fad, but they were a fad that lasted a decade. May as well accept the fact that millions of people are playing a game that gets them out of the house and walking around the community.

Lesson #2 – Understand. How does this thing work? When an innovation hits the scene, don’t ignore it – understand it. Learn how it works, how it works for users, and how it can work for you.

Facebook was built for college students. When it first came out, most older folks didn’t understand it and couldn’t understand why anyone would use Facebook.

Today, the average Facebook user is about 35 years old. More than 1-in-4 Facebook users are age 50 or older. Almost two-thirds of Americans get their news from Facebook. Facebook has grown from a quirky website that no one understands (what the heck is a “poke?”) to a massive piece of Internet real estate that almost everyone uses.

Pokémon Go gets people out and about. People go where Pokémon go. People hang out where Pokémon hang out. “Lures” are goodies that attract Pokémon to a site for 30 minutes. Lures can be purchased for 99 cents. Think about it. Now think about it as a business wondering how to attract new customers.

Lesson #3 – Adapt. How can I profit from it?

Look at these signs seen in front of businesses once the Pokémon Go rage took off. Who do you think is making money off of this new innovation?

One business is turning away customers with a nasty message: “Pokémon are for paying customers only.” That’s another way of saying, “We don’t want your business.”

The other business has adapted and embraced a source of new customers by offering a discount. “This place seems cool, let’s take a break and have a drink.”

Still other businesses have found entirely new opportunities. For less than $2 an hour they can drop a lure at their business and get dozens of potential new customers. That’s pretty cheap marketing. And, yes, a lot of businesses like bars, restaurants, and coffee shops have used the game to lure new customers.

In Oregon, an Uber driver turned to Craigslist advertising $30 for a two hour ride during which he would “drive you around Portland Metro area while you play Pokemon Go.” The fee includes snacks and beverages along with stops along a route that includes “all the PokeStops and Gym Trainers.” This entrepreneur saw an opportunity and jumped on it. (Note: He’s probably not charging enough.)

Everyday, we’re faced with change. With change comes risk and opportunity. Accept, understand, and adapt and you may be able to profit.

Economics On Demand

The world is facing rapid change and increasing uncertainty. Every change presents an opportunity and risks can be managed.

If you need a set of fresh eyes and an open mind to review your business, Dr. Fruits will spend a half day or more learning your business and your markets and make himself available for consultation and research. It’s Economics On Demand.

For a monthly fee, Dr. Fruits will be on-call to answer your questions, dig up research, crunch numbers, run workshops, or give speeches. Discount for up-front annual payment. It’s designed to be flexible, so you can pick anEconomics On Demand plan that’s right for your business. Emailfruits@econinternational.com or call 503-928-6635 and we can discuss your needs.

TuesdayMemo and EconMinute team up for a very Portland podcast

TuesdayMemo and EconMinute team up for a very Portland podcast. We bring together politics, economics, and a dose of common sense into the conversation about what’s happening in Oregon’s biggest city.

This episode, for the first week of August 2015, covers a wide range of topics:

  • Greenpeace vs. Flugtag: The contrast between how officials treat protestors illegally blocking the Willamette River and how they treat those who jump through the hoops to get a permit. For a bonus, we learn what Portland Mayor Charlie Hales was doing while river was shut down.
  • Then we talk about the mayor’s friends in high places. And some of the friends of City Hall.
    Q: How do you know that Charlie Hales has met the Pope or President?
    A: He won’t stop talking about it.
  • We end with a chat about “Ban the Box.” What’s Ban the Box? Listen and find out!

Here’s how you can hear more:

  • Listen on Podbean, the podcasting platform.
  • The podcast is now available on iTunes. Please subscribe to make the most of your weekly Econ Minute.

For blogging on the Portland City Council scene, check out TuesdayMemo.

For a minute or so of economics, read the EconMinute blog.

Confessions of an Uber economist: Politicians and their crazy contradictions on crime and safety

Portland, Oregon is a contradiction wrapped in a mystery inside an enigma.

We are transportation innovators. We began the streetcar revival that has infected cities throughout the US. But, we still can’t pump our own gas—too dangerous, you know.

We have mandatory minimum sentences for certain crimes. But, if certain legislators and city commissioners have their way, it will be illegal for employers to ask job applicants if they’ve been convicted of a crime.

We are a high tech hub—the self-proclaimed home of the Silicon Forest. We bent over backward to get Google Fiber in our city. We even made our own Google Fiber beer. But, until a week or so ago, we couldn’t use the Uber or Lyft ridesharing services, because several city commissioners admitted that they didn’t understand the technology. (And, it’s well known that one commissioner still doesn’t have a smartphone.)

All these contradictions played out in the small space of one week. Last week, in fact.

Monday of last week I applied to be an Uber driver. The first step was to submit my background check. I also had to submit a copy of my driver’s license, my vehicle registration, my insurance information, and my City of Portland business license.

Oh, and I had to get my vehicle inspected to make sure it was safe and that there was no visible damage.

Now the background check is important, or so it seems. In fact, one of Portland’s city commissioners explained her fear of ridesharing by remarking that her mother always told her not to take a ride from a stranger. Yes, she really said that.

The car inspection was a snap. In fact, it took about 30 minutes and Uber paid for it.

The background check happened to be the biggest bottleneck. Turns out that the third party vendor Uber uses has a bit of a backlog from all the people who want to drive.

Nevertheless, just after noon on Friday of that week, I received text message from Uber saying that I was approved. Yes … a text message.

Fifteen minutes later, I picked up my first fare, which I detailed earlier on the Econ Minute blog.

That same day, a community activist and one of my former students was thrown off the Portland Streetcar for complaining that a vent in the streetcar was leaking water and smelled of smoke.

After complaining a few more times, the rider was thrown off the streetcar for making a disturbance and issued a citation.

Streetcar management dismissed the rider’s complaint as a disturbance to the driver and other riders. They explained that the leak was due to the aging car, which gets smoky and leaks when it’s hot outside. But streetcar management said even their smoky leaky cars are safe to ride in.

Keep in mind that the oldest car in the fleet is about 15 years old. (By the way, the average age of the planes used by Southwest Airlines is 19 years.) Also keep in mind that it wasn’t that hot outside. The high that day was 73 degrees. If that’s “hot,” then Portland’s streetcar would be expected to smoke and leak about five months out of the year.

Now let’s get to the contradictions.

We have a city commissioner who is afraid that Uber drivers might commit some sort of violence against their passengers.

At the same time, the city commission and the state legislature are pushing “ban the box” laws that would make it illegal for a business like Uber to ask whether their drivers have ever been convicted of a crime.

We have rules that require all rideshare car to pass a safety inspection. Yet the city runs streetcars that would fail the same sort of inspection to which Uber cars are subjected.

And we have a city in which African Americans complain that they can’t get a cab or get thrown off the streetcar, yet my first two Uber customers were young African American men—both Five Star riders.

And that is this week’s visit to the contradiction wrapped in a mystery inside an enigma that is Portland, Oregon.

Confessions of an Uber economist

Uber (and other ride-sharing services, like Lyft) have all the things economists love: Rampant competition, disruptive technology, and—of course—people. So when Uber came to Portland, the Econ Minute economist decided he had to be a driver.

Signing up to be a driver was a snap. Scan and upload your driver’s license, vehicle registration, and city business license. Then, head off to a (free) vehicle inspection. Then, patiently wait for the background check to go through.

I began the process on Monday morning, and just a little after noon on Friday, I got a text from Uber welcoming me aboard as a driver.

I fired up the Uber driver … I mean “partner” … app, and 20 minutes later I had my first fare.

Uday (not his real name, but close enough) was about 7 minutes away from the Econ Minute world headquarters. When the order came in, I jumped in my car and put the Uber logo in my window ($1,000 fine for not displaying the logo when on duty).

Uday was on the corner eating his bento box lunch waiting for me and flagged me down. He got in with his delicious smelling lunch and told me where he was going. He said I didn’t need Uber’s driving directions because it was an easy straight shot up MLK to the salon where he was getting his hair cut.

He had a million questions about Uber in Portland and noted that I seemed to be the only Uber driver working on a Friday. He knew I was new and guessed it was my first day. I informed him it was actually my first hour.

I learned that Uday was originally from Sierra Leone and has lived in Portland about five years. He’s a soccer player and works around the Lloyd District.

We didn’t have much of a chance to chat, because the ride was so short. I dropped him off, shook his hand, and he wished me luck.

Here’s the rundown of my first Uber ride:

  • Total fare (price to rider): $8.80.
  • Driver revenue (money to me): $6.24.

Total round trip for me was about 30 minutes, door-to-door, so that works out to about $13.00 an hour.

But, I should also subtract out the cost of mileage (or should I?), which would cut that amount in half.

The next experiment is a full-day on the Uber clock.