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CEO Daily: The Best in Business Reading

Good Morning.

If you’ve attempted in recent years to buy tickets for a popular sporting event, concert, or play, there’s a good chance you’ve experienced the simultaneous miracle and nightmare of the ticket-reselling market. Miracle because these days one can obtain seats for just about anything; and nightmare because the very existence of the aforementioned system makes it frequently impossible to buy a ticket at anything close to face value. By the time multiple middlemen have taken their cut, you’re left fuming at a bill that can be orders of magnitude greater than the face value. The most fascinating article I read this week appeared on Vice’s Motherboard site and it’s entitled “The Man Who Broke Ticketmaster.” Call it the war of the loathsome vs. the despised: In one corner, you have a ticket reseller who figured how to elude Ticketmaster’s “captcha” defenses (those little squiggles that are supposed to prevent orders from computerized bots). In the other, you have the the country’s largest seller, Ticketmaster, notorious for its noxious combination of execrable service and usurious fees.

The writer has a keen eye for both macro and micro issues and the man who ran what used to be the top reseller—he ran an outfit called Wiseguy Tickets and pleaded guilty to a charge of conspiracy to commit wire fraud—confesses in detail to his techniques, many of which were ingenious. The writer lays out how the reselling system works and why Ticketmaster really has no interest in clamping down on the ostensible scofflaws who are voraciously buying the products it sells. (The company vociferously denies that.) If you’ve ever wondered why, on average, only 46% of tickets to big events are made available to the public—and if the event is heavily in demand, that figure may fall as low as 10-15%—you’ll want to read this article.



Outlaws, II: Glamorous Drug-Dealers

I was reminded of the great TV series The Wire while reading “Queens of the Stoned Age” in GQ. It wasn’t just that the show reversed the traditional cops/criminals dynamic in movies and TV—in The Wire, the drug dealers were smarter and harder-working than the police—it also subtly addressed multiple business challenges: the difficulties of managing a supply chain, the vagaries of maintaining loyalty in an organization, and the oscillation between competition and cooperation among rival operations. “Queens of the Stoned Age” is a profile of a marijuana-selling organization in New York City, where the drug remains illegal, but tolerated on a small scale—particularly if the sellers are attractive, conservatively dressed young women. That’s the organization’s gimmick and it appears to be an effective one. This article, like the business itself, leans on the frisson that attaches to youthful female beauty, yet there’s an interesting business story woven into its fabric, revealing the human texture of what it’s like to serve customers in different settings. To wit:

After college, Marie waited tables for ten years. Most recently, she worked at a fancy restaurant on the Upper East Side, “a soul-sucking job.” There were customers who came to the restaurant five nights a week for dinner and demanded the same table. There were old people who would ask, “Can I have the Brussels sprouts that were on the menu in the autumn of 2010?”

Another woman would bring in instant mashed potatoes in a Tupperware container and ask Marie to warm them up, to go with her steak. “Those people are not worth it,” Marie says with feeling. “I’ve never felt more treated like a servant in my entire life.”

One of the things she likes most about her current job: “When you walk in that door, someone is so happy to see you.”


Non-Outlaw Stories: The Revival Of An Iconic Shoe

How many products have ever been removed from the bargain bin at Foot Locker only to re-emerge being offered for full price at haughty high-priced fashion retailer Barneys? There can’t be many. Well, behold the glory that is Adidas’s Stan Smith shoe. More than 40 years after it launched, an estimated 16 million pairs of the white leather sneakers (originally designed for tennis but today worn by celebrities for anything but) were sold last year. “The Kids Think I’m A Shoe,” in New York, is the entertaining tale of Smith, who enjoyed brief glory in the early 1970s as a tennis player, and the saga of the footwear that bears his name and visage. The article is more a profile of an athlete who largely lucked into a great endorsement than it is a nuts-and-bolts business story, but it’s a pleasure to read and it sheds light on the alchemy that makes one very standard product a hit while another just like it languishes in obscurity.

The Last HoJo’s

If you want to read almost the inverse of the Stan Smith saga, I strongly recommend Eater’s portrait of the last Howard Johnson’s restaurant standing. Readers over 50 likely have memories of America’s first great restaurant chain, which blossomed with the expansion of the interstate highway system to 1,040 restaurants, and 520 motor lodges, before beginning a protracted unraveling. (I have vivid recollections: My parents, who would not take me to McDonald’s, would grant my siblings and I a visit to HoJo’s on the long drive to visit my grandparents. I would order the 3-D burger and fries, and believe me when I tell you, I have few fonder memories.)

This article is suffused with a poignant, gorgeous melancholy. It chronicles the facts—the cost-cutting and scrimping-on-food-quality that set HoJo’s decline in motion—but it’s also a character study of the person running that last outpost. The portrayal is sympathetic, though the man, Jon LaRock, comes across a bit like the diner equivalent of those Japanese soldiers found on isolated Pacific islands who, decades after the end of World War II, didn’t know the fighting had ended. Here’s how the writer describes him:

LaRock’s eyes match the light blue of his short-sleeve button-up, but are weighed down by the permanent bags of someone who has rarely seen more than a few hours of sleep a night for years on end. When I asked how old he was, after several scoffs, he admitted to being in his early fifties, though according to public records, he just turned 64.

According to the article, HoJo’s central food commissaries were once “overseen by the famed French chefs Pierre Franey and Jacques Pépin.” Today, it’s a weary guy serving up limp chicken strips in a nearly empty restaurant. The end is near enough that LaRock now accepts donations; according to the piece, “an 83-year-old lawyer from New York who’d never visited the restaurant sent him $100 just because he wanted to see the last Howard Johnson’s stay open.” We’re left with the image of LaRock waiting, hoping that a tour bus from Montreal will deliver him some customers.

Nicholas Varchaver