The Dangers of Discounts, the Decline of Customer Service, and Silicon Valley’s Self-Esteem

Get the Oxford Morning Report every day. Click here for a free subscription.


Silicon Valley wants to build a monument to itself: “Capturing the tech world in one sculpture or structure or art installation will be a difficult job. The devices and platforms that made Silicon Valley famous were created in low-slung office parks of limited architectural distinction by entrepreneurs who risked their investors’ capital, not their lives. It’s not really an underdog story nor—as many filmmakers have found out—a particularly visual one.

“Nor is this the ideal moment for Silicon Valley to celebrate itself. Even as the tech industry prepares for a long-awaited series of public offerings that will mint yet another round of dude billionaires, there is a widespread alarm that smartphones and social networks are reshaping society for the worse.”


Kara Swisher thinks Mark Zuckerberg announced his stunning about-face last week, claiming that Facebook will prioritize private messaging going forward, because he’s seen the future: “I would bet a lot that Mr. Zuckerberg saw the data I have seen that shows that the future is not looking good for the bloated, oversharing, fake-news-spewing, Russian-infected big blue app that made him both rich and powerful and, now, quite vulnerable.

“And what do those numbers say? Well, first and foremost that social media is in big trouble with the young … I recently saw some internal Snapchat data that drove this message home using data from both Snapchat and Facebook Ad Managers. It showed that Snapchat ads reach more 13- to 24-year-olds in the United States than ads on Facebook, Instagram and Messenger combined. Among 13- to 17-year-olds, the delta is even wider.”


Food-delivery companies like DoorDash and Instacart are relying heavily on discounts to attract customers: “Those offers can also lead diners to hop from one service to the next searching for the most generous coupon, and consumer surveys show that younger users particularly lack loyalty. Food-delivery companies instead need high-frequency, repeat customers—driven by force of habit at least as much as by bargains—as rivals race to amass the widest possible user base before focusing on making each individual order profitable.

“Many have a way to go. Six percent of the 1,750 consumers surveyed recently by Cowen & Co. said they ordered restaurant delivery daily. Frequency is up since 2017, but current daily users are dwarfed by 36 percent of customers who reported ordering delivery once a month or less. Supermarket deliveries are even less frequent, as only 4 percent of people order groceries online at least weekly, according to a recent Gallup poll of 1,033 adults.”


Because of gang violence, the coffin business is booming in Central America: “The Pachecos are undertakers working in El Salvador, a country with one of the world’s highest murder rates. Together they’ve embalmed more than 500 bodies in less than two years. They’ve sewn together dismembered limbs, reconstructed caved-in heads with inflatable plastic balls, and embalmed cadavers so putrefied that their flesh appeared to be melting. But although the Pachecos are relatively new to the funeral business, they grew up around death. They’re from Jucuapa, a small city of about 18,000 people and about 30 coffin factories. Manufacturing the ‘wooden pajamas,’ as some locals call them, has become such big business in Jucuapa that families have abandoned their bakeries, butcher shops, and sugar cane fields to enter the funeral industry.”


In a tight job market, companies coping with the skills gap are trying to retrain their existing employees: “‘This is the first time I’ve seen CEOs not balk at all at spending tens of millions of dollars in training and retraining,’ Mr. Taylor said. ‘In fact, they are coming to human resources and asking if they are spending enough.’

“A 2018 survey of more than 3,500 SHRM members found that 86 percent of represented companies offered professional development opportunities, up four percentage points from 2014. Over the same time, 45 percent of companies offered cross-training to develop skills not directly related to an employee’s job, an increase of 6 percentage points.”

If you were forwarded this newsletter, click here for a free subscription.


The minds behind the Bravo network’s most-watched scripted show, “Dirty John,” started it off as a podcast premiering on newcomer Wondery and now founder Hernan Lopez wants to make it easier for podcasts to translate content to the small screen. With his background in film, Lopez believes his network has an edge in the podcast-to-TV pipeline: “We know what network executives are looking for and what producers are looking for, and when we are pitching one of our podcasts we’d turn into a television show, we know that, yes, they need to listen and fall in love with the podcast, but then we need to have a plan, too. You can’t just slap a video narrative on podcasts and get a great television show.” One thing that has worked in Lopez’s favor is the format itself. “It’s a lot easier to get a writer or an actor or a director to listen to a podcast than to read a script.”


February saw slow growth in the jobs market (fewest since September 2017): “Analysts said the unexpectedly low figure doesn’t mean conditions rapidly deterioratedciting weather effects and payback from outsize gains in prior months … Economists were already expecting monthly payroll gains to average about 170,000 this year, following a 223,000 pace in 2018 that was driven by corporate investment and consumer demand fueled by tax cuts.”


Tesla has decided to reopen some of the stores it closed less than two weeks ago: “In a blog post late Sunday, Elon Musk’s electric-car outfit said it had decided to keep ‘significantly more’ stores open than planned and will even reopen ‘a few stores in high visibility locations that were closed due to low throughput…but with a smaller Tesla crew.’ Overall, it will only be shuttering half as many stores as it was going to. …

“Tesla’s strategic swerving may have something to do with the fact that it has $1.2 billion worth of lease obligations on which it needs to make good over the coming four years, no matter how many stores it might want to close at will.”

The line, “May I speak to your manager?” has become a much more common phrase in the retail world. According to the American Customer Satisfaction Index, satisfaction is down for the second consecutive year. “The ASCI arrived at the results by scoring six sectors of retail from zero to 100. Overall, the retail sector was down 0.9 of a point from last year’s report, for a score of 77.4 out of 100. In specific categories, gas stations fared the worst, falling 2.6 percent to 74 points.”


Okta, an identity focused tech firm will acquire Azuqua, a workflow automation startup for $52.5 million in cash. “Azuqua’s technology helps integrate data recorded in disparate databases across customers’ backend systems. Okta plans to use it to synchronize employee identities across customers’ workplace applications, such as those for human resources and payroll.”


If you were thinking of moving your HQ from Atlanta to NYC, you might want to take a look at the iconic Chrysler Building, which is selling for an 80 percent discount. “RFR Holding LLC, a New York real-estate firm led by Aby Rosen, and the Austrian real-estate firm Signa Holding GmbH is buying the Chrysler Building for $150 million. … The land beneath the tower is rented from the Cooper Union school. The annual ground lease is $32.5 million, up from just $7.75 million last year.”

And that’s what’s ahead.

Please send comments and suggestions to and