Thursday, August 30, 2012

Why plain packaging for cigarettes is unlikely to have much effect

Plain packaging for cigarettes is widely seen as a way to reduce the number of people smoking (see Plain packaging for cigarettes would help Britain kick its smoking habit The Guardian 10 August 2012). Both the EU and the UK government are now considering this move, already adopted in Australia. But the notion that selling cigarettes in logo-free dull green packages will deter smokers fails to take into account both human nature and the way brands work.

Advocate of plain packaging believe that smokers and aspiring smokers will be repelled by unattractive plain packages.  I doubt that this will have much effect. Nobody smokes because the packages are cool; people start smoking because smoking is cool – at least in their eyes. Existing legislation also ensures that people are not going to pick up a packet of cigarettes from a supermarket shelf because it looks stylish; they ask for a brand they have already chosen and they are influenced more by the image of the brand rather than the packaging.

Packages are important in one way. Like everyone else, smokers like their choice of brand to be seen by other people when they take out the package. In theory this could be one moment where plain packaging might have some impact, but it will not take long for people to realize that you can easily slip an attractive sleeve around the package, making the retail package more like a refill. Regulating these covers will be very complex if at all possible. The move might also lead to the emergence of a market for third party covers, like for smartphones.  It could even prompt the return of elegant, Bertie Wooster style cigarette cases.

Equally suspect is the idea that putting cigarettes in a dull green box will make smoking uncool. It is much more likely that the reverse will happen -- it will make dull green a very cool colour in just the same way as ugly military colors and designs are popular with some people because of their associations. And if this doesn't happen by itself I am sure that someone could help make it happen.

Decorating the plain packages with deliberately disgusting pictures of diseased lungs and other failed body parts is more likely to work, at least for new smokers, but again it is easy enough to find a workaround with a sleeve or box that covers or replaces the plain packages.  With time people are likely to get used to these images, which will lose their deterrent value just like “Smoking Kills”. Young smokers do not have a long-term perspective so are rarely swayed by arguments like smoke today and you’ll pay for it fifty years hence.

Reducing the number of people smoking and, most importantly, the number of young people starting is a key public health goal, but I fear that we need to find some other solution than plain packaging, which can never be more than a small part of the answer.

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Thursday, August 16, 2012

Upstart Brings Personal Funding to People With a Vision

Just when you think they can't think of any more awesome ideas for websites along comes another one. This time it's a startup founded by a group of ex Googlers called Upstart that brings funding for people rather than businesses, projects or whatever.

Upstart's concept is simple enough: you can raise capital from backers by promising them a small percentage of your earnings for ten years. This isn't funding for your movie project or for your startup idea; it's funding for you personally to make your dream real. It's available to students or recent graduates of five US colleges for the moment.

To become an "upstart", as the company calls them, you start by building a profile where you describe yourself and your goals. Using income statistics Upstart then calculates how much you can raise per % future income you can commit. You then decide how much funding you want to ask for.

Backers can then fund you in increments of $1000. Some might also choose to mentor you to make sure their investment pays off. After you have received this funding you share with the backers  a part of your income on your tax return for the next ten years. Payments are in any case capped at 14.99% annual return to backers and when you earn less than $30000 you defer the payments by a year up to a maximum of five years. At any time you can buy out the obligation.

You can use the money to start a business, to pay off student loans, to develop a craft like writing or to gain working experience. The choice is yours and the backers have no say in what you do.

Upstart is a clever idea and a great way for people to make their dreams come true. It provides another way to raise some capital and gives you a rare chance to do something like writing a book, that can pay off long term but is hard to do when you have a full-time job.

Some comments online have compared Upstart to slavery and questioned the ethics of this approach, but it seems to me more like an investment like any other since you don't in any way own the person nor can you impose your mentorship. If an upstart earns well the backers do too. If they earn nothing the backers' percentage will not amount to much.

But I can see other legal and administrative difficulties. I assume that the founders have checked that their idea can be implemented legally in the USA but it is going to be hard to make this work outside the US because every country has its own laws and these laws don't stay the same for ever. Administration, too, can be costly because they will need to track every upstart's tax returns for 10-15 years and take care of all the accounting. This is way much more complex than running, say, a photo sharing site.

Yet difficult is not the same as impossible and sometimes it is better to do hard things because its what the others do not do; for the same reason I often tell my students to master skills that seem hard because that will differentiate them from their peers.  By making this work Upstart will not only give the world an interesting new way to fund personal dreams, it also makes sure that competitors will not be able to enter the market so easily.

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