NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

The Brutal Truth About Second-Class Service: Customers Are Done Waiting in the ‘Right Now’ Economy. Consumers are accustomed to having virtually everything available at the touch of a button. If you’re not willing to meet their requirements, they’ll find someone else who will.

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @TULLMAN

Jul 7, 2026

We’re nearing the end of the “hurry up and wait” era when customers politely settled for service and timeliness that suited the providers but sucked for the recipients. In many cases, there were few alternatives, and they were grateful to have access at all to certain of these providers. However, in today’s competitive environment, “right now” is barely enough to satisfy the demands of an educated, aggressive and increasingly connected public. No one wants to wait for anything, and if you’re not willing to meet their requirements, they’ll happily find someone else who will. The whole world is a few clicks away.

You can blame a small part of the overall “need for speed” on the impatience of young people—whose cultural impact and purchasing power across the board has never been greater—and on young techies and developers who are always seeking to accelerate whatever processes are central to their products and services. You can also point to the global nature of competition these days, as well as the ever-present availability of advice, instruction and alternatives that mobile devices make possible. Then there’s the fact that Amazon is constantly upping its delivery game and heightening the assumptions and expectations of buyers everywhere, both as to delivery times and the expansiveness of its inventory, wherein virtually everything you can imagine is online and available at the touch of a button.

The simple truth is that there’s no going back and, if your business or industry hasn’t been impacted and changed by these trends, it’s only a matter of time until the wave of change hits. The passage of time is not anyone’s friend except maybe for the Orange Monster who stalls everything and has escaped accountability for his misdeeds for decades. For us mere mortals, time has a nasty way of turning even the best assets into liabilities.

Speed, convenience and access win out over quality in far too many cases, but it’s really our own fault because we settle for “good enough” too often. We’ve also come to believe that almost everything is relatively disposable and quickly replaceable, so we think that we’re not really giving that much up when we accept second class service and mediocre performances and results.

Too many providers still take advantage of our indifference and grudging acceptance to continue to do a lousy job because they can get away with it and no one has yet offered a better alternative. But change is coming. One of the first groups to be targeted will be government office holders and political candidates. Anyone who’s wasted time trying to call or contact any of their city, state or federal representatives knows they’ll never reach anyone of consequence or secure any assistance or relief.

While our political and governmental officers and representatives have always lagged in terms of the demonstrable speed and service advances which we now see in virtually every business, the fact is, once a new technology emerges—and when that technology delivers better, faster results—the race will truly be on to see how quickly the laggards can catch up. Many of them won’t have the capacity to deliver comparable new features and services and will quickly fall by the wayside.

We’re only now starting to see the introduction–obviously aided in many respects by artificial intelligence–of intelligent automated response systems which will enable politicians, candidates, governmental authorities and other regulatory agencies to create authentic and interactive digital twins like Selfie which will enable them to deliver replies and responses in a timely (in fact instantly) and scalable fashion to a virtually unlimited number of callers, constituents, and voters.

These systems can be updated in real time 24 hours a day and provide the most accurate and comprehensive answers available to any inquiries. The time, cost and manpower savings which this kind of interactive and intelligent automation will offer to early adopters will be substantial. Competitors, candidates, and other offices or agencies which lack comparable tools and capabilities will rapidly discover that they are doing a comparatively poor job of providing the services to their constituents, prospective voters, funders, media and the public in general.
These are people who are looking forward to the past. The future doesn’t wait.

NEW INC. MAGAZINE COLUMN BY HOWARD TULLMAN

 

3 Tips for Long-Term Success in an Instant Gratification World

A transactional mindset that focuses on immediate success rather than patience is leaking into every aspect of our lives.

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

Feb 17, 2026

 

These days, we’re all afflicted with what I call hurry sickness, where everyone wants everything right now. Amazon’s not entirely to blame for this, although no single enterprise has done more to enable and encourage the demands of the world’s consumers for instant gratification. And one of the clearest messages  from Amazon’s aggressive actions and the continual raising of the delivery bar is that no other retailer (large or small) is immune from the pressure and necessity to respond and try to compete if they want to hang on to their customers. 

Price is always a consideration, but speed is now the name of the game. Today, most of us acknowledge that our time is scarcer and more valuable than our money in most mundane transactions. One Jeff Bezos quote that will live in infamy was the observation that “people don’t want to negotiate the price of things they buy every day.” He went on to make this theory the very heart of the Amazon pricing algorithms. What’s an extra buck or two if I can have it delivered this afternoon? Brand and quality are secondary considerations at best. Ease of access and convenience are critical.

In an environment where a million choices are just a click or two away, and where the expectations of buyers are perpetually progressive, it’s a “what have you done for me lately” world. Loyalty these days means nothing more than “I haven’t seen anything better—yet”. This transactional mindset—“what’s in it for me”—is leaking into every aspect of our lives.  

The most shameless advocate of this selfish and self-serving philosophy is the Great Grifter himself, for whom everything in life is about illegal shortcuts, cutting corners, reneging on promises and running one grift after another by taking advantage of someone. Trump is too corrupt to be salvageable, but thousands of student athletes whose lives are being turned upside down by the financial insanity of the NIL (name, image and likeness) market aren’t. Neither are the millions of young prospective entrepreneurs and new business builders who are being told that learning your craft, paying your dues, and waiting your turn are stupid strategies in today’s high-speed and hyper-competitive world.  

You don’t need to know much of the NIL details (which change every six months anyway) other than to know that since the NCAA changed the rules in 2021, student athletes can now sell and profit directly from their own name, image and likeness through all manner of cockamamie side deals, endorsements and promotional arrangements, and other behind the scenes funding scams which are now “legal,” if still shabby and hypocritical.  

Even more material changes in the ability of players to jump from school to school every year through the transfer portal without any eligibility penalties came along a few years later and, of course, everyone knows that both the quarterbacks in the college national championship football game (as well as the Heisman Trophy winner) were transfer students as were the quarterbacks in the prior year and those who will start for both teams in 2026. 
 
College ballplayers in multiple sports are being bribed by big donors and collectives with NIL dollars to jump ship, abandon their school and teammates, skip the learning curve spent sitting on the bench, and move to another program where they have a shot at being a starter whether they’re ready and mature enough for the challenge or not. Similarly, VCs and headhunters are frantically pitching second-tier talented A.I. techies at every major computer company to spin out, grab a couple of buddies, start their own businesses with Day One unicorn funding, and try to figure out how to spend hundreds of millions of dollars overnight. Many of these men and women have never run a Kool-Aid stand before or frankly managed a team of others.  

Just to be clear, most of the most visible NIL “winners” in the short term (with upfront payments of millions of dollars) are likely to find that the whole process is a double-edged sword and that the slightest hiccup in their super-hyped and expected performance will have them moved aside or dumped entirely (with their careers in the crapper) in favor of the next hot guy coming through the transfer portal. In the same way, hundreds of new A.I.-adjacent startups will implode and tank (without skid marks) because their founders were in such a rush and so far out over their skis that no one could pull off the miracle which they eagerly signed up for at the behest of the usual greedy VCs. 

There are a few common lessons and plenty of cautions here that apply across the board. Whether you’re a parent, peer, coach, counselor, prospective employer or just someone interested in the future mental and physical health of our kids, it’s essential to remind all these excited jocks, new business builders, and other up-and-comers of a few facts of life to accompany and hopefully help to offset all the sweet talk and  “tricks of the trade” that are being whispered in their ears – especially about their exceptional talent – by people who see them as nothing more than their latest meal ticket.  

First, you can’t succeed in the long run by relying on your talent alone, even if it’s extraordinary. Great competitors in any field will tell you that failing along the way (especially early in their careers) is what taught them that it takes more than raw ability to succeed. Failure is a better teacher than success. When someone does something really well and gets praised for it, very often they don’t learn anything new for a long time. But failure can make them confront what they have been doing wrong and drive them to new learning. Talent combined with education and mental agility is what wins. Great quarterbacks aren’t just stronger and more skilled than the others, they’re much smarter and more analytical as well. Fernando Mendoza can fling it a mile, but it’s his powerful pre-snap recognition that makes him a winner and a Number 1 draft. 

Second, talent takes some time to temper and season along with good coaching and mentoring. Managing and overcoming the inevitable bumps in the road that you face in the early years builds mental strength, character and persistence. Winning takes talent, winning repeatedly takes character. Without some grit, maturity and patience, you end up being too fragile to succeed instead of being resilient. Resilience turns out to be at least as critical as talent, and the combination creates the ability to keep going in the face of defeat. Before you “roll your own,” it’s essential that you learn from others and spend some time as a role player. Waiting and watching pays big dividends down the line as you discover that you didn’t know what you didn’t know. 

If you try to jump and grab the brass ring too soon, you may quickly end up empty handed. 

Third, it turns out that the most talented professionals just happen to be among the very hardest workers as well. They’re constantly building on their base and they’re absolutely willing to work harder than anyone else and it shows. Carlos Alcaraz just won the Australian Open and became the youngest man in tennis history to complete the Grand Slam. Amid all the compliments about his natural ability and talent, he was careful to point out that “Nobody knows how hard I have been working” to improve his serve and other key aspects of his game.  

Finally, there’s a lot to be said – even in these sad days – for loyalty and for focusing on the here and now rather than on what’s next. Temptations are everywhere. Plenty of folks will tell you that you’ve got to seize the moment and move on. But, as one NFL player recently told me about dealing with all the tantalizing offers and greener grass, his mantra was to “be where his feet were,” keep his head down and on the ball, not worry about what other guys were saying or doing, and rely on his own abilities and performance to make his way forward. He didn’t need to look elsewhere for his satisfaction or success. Success usually comes to those who are too busy to be looking for it. 

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

3 Tips for Long-Term Success in an Instant Gratification World

A transactional mindset that focuses on immediate success rather than patience is leaking into every aspect of our lives.

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

Feb 17, 2026

 

These days, we’re all afflicted with what I call hurry sickness, where everyone wants everything right now. Amazon’s not entirely to blame for this, although no single enterprise has done more to enable and encourage the demands of the world’s consumers for instant gratification. And one of the clearest messages  from Amazon’s aggressive actions and the continual raising of the delivery bar is that no other retailer (large or small) is immune from the pressure and necessity to respond and try to compete if they want to hang on to their customers. 

Price is always a consideration, but speed is now the name of the game. Today, most of us acknowledge that our time is scarcer and more valuable than our money in most mundane transactions. One Jeff Bezos quote that will live in infamy was the observation that “people don’t want to negotiate the price of things they buy every day.” He went on to make this theory the very heart of the Amazon pricing algorithms. What’s an extra buck or two if I can have it delivered this afternoon? Brand and quality are secondary considerations at best. Ease of access and convenience are critical.

In an environment where a million choices are just a click or two away, and where the expectations of buyers are perpetually progressive, it’s a “what have you done for me lately” world. Loyalty these days means nothing more than “I haven’t seen anything better—yet”. This transactional mindset—“what’s in it for me”—is leaking into every aspect of our lives.  

The most shameless advocate of this selfish and self-serving philosophy is the Great Grifter himself, for whom everything in life is about illegal shortcuts, cutting corners, reneging on promises and running one grift after another by taking advantage of someone. Trump is too corrupt to be salvageable, but thousands of student athletes whose lives are being turned upside down by the financial insanity of the NIL (name, image and likeness) market aren’t. Neither are the millions of young prospective entrepreneurs and new business builders who are being told that learning your craft, paying your dues, and waiting your turn are stupid strategies in today’s high-speed and hyper-competitive world.  

You don’t need to know much of the NIL details (which change every six months anyway) other than to know that since the NCAA changed the rules in 2021, student athletes can now sell and profit directly from their own name, image and likeness through all manner of cockamamie side deals, endorsements and promotional arrangements, and other behind the scenes funding scams which are now “legal,” if still shabby and hypocritical.  

Even more material changes in the ability of players to jump from school to school every year through the transfer portal without any eligibility penalties came along a few years later and, of course, everyone knows that both the quarterbacks in the college national championship football game (as well as the Heisman Trophy winner) were transfer students as were the quarterbacks in the prior year and those who will start for both teams in 2026. 
College ballplayers in multiple sports are being bribed by big donors and collectives with NIL dollars to jump ship, abandon their school and teammates, skip the learning curve spent sitting on the bench, and move to another program where they have a shot at being a starter whether they’re ready and mature enough for the challenge or not. Similarly, VCs and headhunters are frantically pitching second-tier talented A.I. techies at every major computer company to spin out, grab a couple of buddies, start their own businesses with Day One unicorn funding, and try to figure out how to spend hundreds of millions of dollars overnight. Many of these men and women have never run a Kool-Aid stand before or frankly managed a team of others.  

Just to be clear, most of the most visible NIL “winners” in the short term (with upfront payments of millions of dollars) are likely to find that the whole process is a double-edged sword and that the slightest hiccup in their super-hyped and expected performance will have them moved aside or dumped entirely (with their careers in the crapper) in favor of the next hot guy coming through the transfer portal. In the same way, hundreds of new A.I.-adjacent startups will implode and tank (without skid marks) because their founders were in such a rush and so far out over their skis that no one could pull off the miracle which they eagerly signed up for at the behest of the usual greedy VCs. 

There are a few common lessons and plenty of cautions here that apply across the board. Whether you’re a parent, peer, coach, counselor, prospective employer or just someone interested in the future mental and physical health of our kids, it’s essential to remind all these excited jocks, new business builders, and other up-and-comers of a few facts of life to accompany and hopefully help to offset all the sweet talk and  “tricks of the trade” that are being whispered in their ears – especially about their exceptional talent – by people who see them as nothing more than their latest meal ticket.  

First, you can’t succeed in the long run by relying on your talent alone, even if it’s extraordinary. Great competitors in any field will tell you that failing along the way (especially early in their careers) is what taught them that it takes more than raw ability to succeed. Failure is a better teacher than success. When someone does something really well and gets praised for it, very often they don’t learn anything new for a long time. But failure can make them confront what they have been doing wrong and drive them to new learning. Talent combined with education and mental agility is what wins. Great quarterbacks aren’t just stronger and more skilled than the others, they’re much smarter and more analytical as well. Fernando Mendoza can fling it a mile, but it’s his powerful pre-snap recognition that makes him a winner and a Number 1 draft. 

Second, talent takes some time to temper and season along with good coaching and mentoring. Managing and overcoming the inevitable bumps in the road that you face in the early years builds mental strength, character and persistence. Winning takes talent, winning repeatedly takes character. Without some grit, maturity and patience, you end up being too fragile to succeed instead of being resilient. Resilience turns out to be at least as critical as talent, and the combination creates the ability to keep going in the face of defeat. Before you “roll your own,” it’s essential that you learn from others and spend some time as a role player. Waiting and watching pays big dividends down the line as you discover that you didn’t know what you didn’t know. If you try to jump and grab the brass ring too soon, you may quickly end up empty handed. 

Third, it turns out that the most talented professionals just happen to be among the very hardest workers as well. They’re constantly building on their base and they’re absolutely willing to work harder than anyone else and it shows. Carlos Alcaraz just won the Australian Open and became the youngest man in tennis history to complete the Grand Slam. Amid all the compliments about his natural ability and talent, he was careful to point out that “Nobody knows how hard I have been working” to improve his serve and other key aspects of his game.  

Finally, there’s a lot to be said – even in these sad days – for loyalty and for focusing on the here and now rather than on what’s next. Temptations are everywhere. Plenty of folks will tell you that you’ve got to seize the moment and move on. But, as one NFL player recently told me about dealing with all the tantalizing offers and greener grass, his mantra was to “be where his feet were,” keep his head down and on the ball, not worry about what other guys were saying or doing, and rely on his own abilities and performance to make his way forward. He didn’t need to look elsewhere for his satisfaction or success. Success usually comes to those who are too busy to be looking for it. 

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

You Can Always Do More as a Business Owner, but Should You?

The best leaders understand that they have to deliver both consistency and intensity in varying degrees on a regular basis.

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

Sep 30, 2025

Recently, I was asked if I was interested in writing about a world-traveling CEO who prided himself on basically never being in the office but still had a successful, growing business. His representative suggested that he’d be happy to share the secrets to his “success” with me and also explain what a wonderful time he was having flying all around the globe to exotic and exciting places. To be clear, this was demonstrably not business travel.

I passed on the pitch, although the topic of in-office work isn’t one that’s likely to disappear any time soon. Amazon’s having a tough time forcing its workers back to the office. The new CEO of Starbucks is getting loads of grief from his own employees about his plan to “commute” to the office by company-owned jet from Newport Beach to Seattle. Work from home has always been a sub-rosa class issue since the pandemic began: essential, blue-collar, and no-collar workers never got a break during COVID, while many white collar workers worked from home and barely felt a thing.

But one issue about the proposal stuck in my mind. Without knowing the particulars of his situation or seeing his company’s actual financial records, I found myself asking this simple question: if his operations were really doing well—essentially in his absence—how much better could the business be doing if he was actually present and available to his team, paying attention every day to the nuts and bolts of the business, and concentrating on improving his margins and identifying new markets and opportunities instead of running up his frequent flyer miles? And frankly, what kind of lazy board and indifferent investors would tolerate this kind of selfish and lazy behavior. I’d say, “less showboat and more tugboat.” 

It felt to me like this guy was perfectly happy to settle for good enough, which I don’t think any real entrepreneur ever does. Anyone who has ever worked with me knows two things: (1) I’d never ask more of them than I ask and expect of myself; and (2) I believe that there’s always more in each of us than we even know (until we try). Once you see and realize that potential and prospect, then you’ll never be happy or willing to settle for less. It’s not about acceptance, it’s about expectations: people learning, growing and becoming. If I accept you as you are, I make you worse. If I treat you as though you are what you are capable of becoming, I help you reach that goal. 

I’ve called this approach obsessive iteration or the process of successive approximation—always getting a little bit better every day toward the unreachable and delusional goal of perfection. There’s really no quit in a true entrepreneur because there’s always another mountain to climb and there’s a constant internal drive which keeps pushing you forward, demanding what’s seems impossible, and sometimes even achieving it. You never sit still or stop. There’s no finish line and rarely any appropriate time to celebrate. More isn’t necessarily better, only better is better. But there’s always a lot more to do to be even better. Or, as we used to say, too much is not enough.  

I have a reputation for relentlessness and I’m proud of it, although I do concede that it’s not for everyone. It’s critical for new business builders to understand that not everyone shares your craziness or is quite as zealous and committed as you are. If you aren’t careful and learn to occasionally rein in your own drive and enthusiasm and spend some time making sure that there’s room for other people, attitudes and approaches, you’ll never build the kind of team or business you want. It’s a balancing act and it’s easy to intimidate or even scare off the exact kind of talented people you’re going to need to succeed if you’re not careful. Pushing your people too hard is a sure way to push them away. The best leaders understand that they have to deliver both consistency and intensity in varying degrees on a regular basis. This helps the team understand what to expect and appreciate what you expect. It’s not an easy task, but it’s essential. 

And to be clear, there’s also another vitally interested and important party to these considerations, and that’s your family. Your family will ultimately be a much more important extension of yourself than any work you do, although it often takes quite a while for young entrepreneurs to realize that. There’s always more work, but you only have one family. They share every bit as much as you do in the ups-and-downs of the business building and the sacrifices as well. Even more to the point, your inbox will always be there waiting for you, but your family might not be, so put them first. Family is more important than fame or fortune. Don’t try to tell yourself otherwise. 

It’s easy to think that you’re constantly working like a maniac for your family, but if you ask them, it’s very unlikely to be their view. They’d much rather have more of you. And please don’t make the stupid mistake of ever telling your spouse or your kids that you’re working for the money so you can afford to give them nice things, live in a lovely home, and take great vacations. This is the worst message in the world. It’s not about making money or a living—it’s about making a life you’re proud of and making something that makes a difference. If you don’t know why you’re working and doing what you’re doing, then maybe it’s time for a change. 

So, the next time you find yourself wondering whether it’s time to call it a day or whether you should maybe put in a few more hours at the office (and likely miss dinner or an important event with the family), ask yourself: I know I could do more, but should I?  
 

 

NEW INC. MAGAZINE COLUMN BY HOWARD TULLMAN

 

Waste the Customer’s Time at Your Own Risk

Trying to squeeze an extra dollar out of a sale–or even giving away free samples–isn’t always a smart strategy.

 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

Jun 3, 2025

 

Many years ago, we looked at the business plan for a company that hoped to install high-volume printers at the end of the production lines for various online retailers. The plan was that these printers would create personalized greeting cards selected by the gift giver to be inserted into the packages. At the time, the only messaging that even the most advanced sellers could offer to gift buyers was some poorly printed basic sender information on the outside of the packaging, generated by dot matrix mailing label machines.

As often as not, most of the people on the receiving end of these packages had no idea of who had sent the contents or why, even after they opened the packages.

The entrepreneur’s thought was that gift givers would be offered the opportunity to add a card they personally selected for a few incremental dollars when they ordered, along with a message to the recipient. Given that the greeting card industry is a multi-billion dollar business and one which continues to invent new occasions and compelling reasons to send cards and presents, it seemed like a case where the consumer demand would be substantial, the sellers would be happy to make the additional revenue per sale, and the cost of presenting the idea and the opportunity to millions of buyers would be trivial. They were already online at their computer or phone making a purchase.

But the idea never got off the ground for a simple reason: the retailers hated the idea of doing anything that extended the shopping experience because their greatest nightmare is shopping cart abandonment. Nothing else causes them more angst than watching prospective buyers bail before they hit the purchase button. Asking the customer to spend even two minutes more to select and personalize a gift card would undoubtedly lead to anxiety, confusion and indecision. The net result could well be that the buyer decides to bag the whole sale.

As much as the entrepreneur argued that the customer was already so invested in the transaction that he or she would certainly stick around, the merchants across the board knew better – they lived and died every day with metrics and measurements that were focused on such minutia as site navigation issues, lengthy turnaround times for data entry, the adverse impact of pop-ups, and even “free” add-on offers.

They also knew how fragile the online connection was and how fleeting the attention, interest and commitment of the consumers could be. Any number of external factors could interrupt or interfere with the ongoing action and result in a buyer ghosting the whole deal. So, it was a big and consistent “No.”  This was only one of many instances where online merchants unsuccessfully experimented with offers, incentives, and other inducements to try to increase the average purchase dollars per sale. “Get ‘em in and get ‘em out” was the prevailing motto.

So, when I was approached by the founder of Swish Brand Experiences I honestly wasn’t very interested in the company. Swish inserts free samples of new products from firms like Danone or KraftHeinz, into the orders of online shoppers – essentially a surprise – along with the items they actually ordered. But, in fairness to their business plan, these guys have thought through and eliminated all of the obvious obstacles that I had encountered in previous versions of similar ideas.

First of all, because everything is behind the scenes and unknown to the online purchaser, there’s no delay or interference with the transaction. Their approach is quite clever and basically inserts a direction to the selection system upstream that looks to the seller’s computer just like an additional item in the original order – albeit with a zero price – and that item is pulled and packed right along with all the other products that were actually ordered by the consumer.

Second, because their system is fully integrated with the seller’s databases, Swish’s program knows all the available demographic, prior history, and current purchase data about each buyer in real time. Its algorithms can instantly decide which buyers should receive which sample products, based on who they are, what they’re presently buying, and what they’ve purchased in the past. Multiple stocks of different samples can be cleanly included in the program because the end recipient only sees the sample the system selects.  These “smart” samples are sent to the right targets without any of the waste typically associated with sampling programs, which provide their sellers with only the faintest idea of who theoretically may be offered their goods and offer no demographic information at all on who actually took the product. Many of the cosmetic companies include small free samples of new products in shipped orders, but the entire effort is mostly random.

One of Amazon’s greatest and most cost-effective tools for sellers and buyers is the fact that a buyer of some item last week almost never sees a repeat ad for the same item because Amazon knows that you already bought it. They may offer it to you again sometime in the future, but they won’t waste your time and their sellers’ ad money showing you banner ads for the same thing over and over.    

Finally, because the sample is so well targeted, there’s a tremendous emotional uptick in the mind of the end user. Not simply that they are getting a surprise, because surprises in business are rarely good news. And it’s not merely that it’s free; today even free isn’t cheap enough because there’s no good price for a crappy product. The bottom line is that the excellence of a “gift” or lagniappe like this lies in its appropriateness rather than its value.

This is a smart, simple and painless way for merchants to surprise and delight their customers and to spend their sampling dollars in an intelligent, automated and highly effective way.  

HOWARD TULLMAN JOINS LISA DENT ON WGN RADIO TO DISCUSS COSTCO AND HIS INC. MAGAZINE ARTICLE

 LISTEN TO THE SHOW HERE

LISTEN TO THE SHOW HERE

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

Costco Has a Way With Words at “Costco Next.” 

And that’s a bit concerning. One of America’s absolute best retailers risks its rep by giving members “access” to outside sellers. 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

MAR 25, 2025

Costco may have a bigger admirer than me, but I doubt it. They’re masters of shopping psychology – creating desire, ease of access, and a sense of urgency in every visit. They’re right up there with architect Victor Gruen, whose pioneering design work with shopping malls led to the idea of open-front stores with no barriers to browsing.

Of course, given the recent upsurge in smash-and-grab professional flash mobs and store ransacking by roving gangs of urban teens “just having a good time” according to Chicago’s Mayor Brandon Johnson, we’re seeing more doors, guards, cages, and locked display cases in retailers. But, interestingly enough, not at Costco. Maybe because 18 of anything is a little tough to stuff in your pocket or your girlfriend’s backpack while you’re fleeing the premises. 

Costco’s ability to transform shopping with your spouse from a chore into an exciting experience and a challenge is one of the great triumphs in retail. Not only are the giant TV screens and new technology the very first things you always see week-in and week-out as you roll in, but throughout the store there’s a visceral sense that, if you see something special on an end cap or other display, you better buy it today because it’s likely to be gone forever if you don’t.

In a store literally stacked with product to the rafters, Costco’s merchants can still create a sense of scarcity and immediacy that is palpable. This has quickly become learned behavior – grab the merch before it’s gone.  

How to sell Christmas trees in August

It’s not quite like the blouse-ripping craziness of Filene’s basement in the pre-internet days, or the shopping cart spree races we see annually on Black Friday when the hottest new holiday item becomes available. But there’s simply no other way to explain why sane shoppers would be stocking up on Santa inflatables and artificial Christmas trees in the middle of August. If you ask them, to a person, they’ll tell you that they lost out last year because they didn’t move quickly enough once whatever they “needed” went on sale. Besides that, who can pass up a hot dog for a buck fifty (since 1985) or a 3-lb. roast chicken that’s been priced at $4.99 since 2009. Such a deal. Bird flu be damned.

So, I was excited to read about their latest digital innovation, Costco Next, which is described as a virtual mall experience for members. They get to see upscale brands and other products that are not usually found in the warehouse stores, and at attractive and allegedly unique prices the company has negotiated for members. I thought, for a moment, that after more than 20 years of waiting, someone (other than Meta) had cracked the code and created a workable version of Second Life, where you could actually navigate and fly through a virtual mall, inspecting and selecting, but without the tech glitches– the ones where you’d end up stuck in the middle of some object with no way out.

Costco Next opens the door to outside vendors

But alas, Costco Next is just another glorified gateway to about 90 other suppliers’ websites. Not all that different than something Amazon has been doing for years with programs like Support Small, which promotes products and services from thousands of small and medium-sized independent sellers. While it’s true that Costco Next provides a channel and access to large items, seasonal items and other products that wouldn’t work year-round in the big stores, it’s actually a curious step or two backwards in a world where everyone wants everything to be one-stop shopping.

Every transaction initiated on any of the pass-through websites is a standalone deal – separate payment, varying return policies, and shipping handled by the third-party vendor as well. Whether you select a casket or a couch, all of the risks and burdens of the purchase are on you. While Costco says it curates the items being offered, that’s not much assurance if all of the risks are on you as the purchaser.

Pulling people in using the Costco branding and good will and then shipping them off to dozens of outside sellers seems a little “bait and switchy” to me. And, while Amazon makes no representations about the relative prices of the products sold by third parties on its site, it’s pretty clear from the Costco pitch that users are said to be getting discounts even for products appearing on the same seller’s own online website.

The risks of getting Costco-ized

But the deal actually gets a little worse if you read the fine print and descriptive language. While there are several oblique references to value and unique pricing, the most important part of the description of the new process is the statement that the goods and services will not only have been curated, but also “Costco-ized” as well.

Offhandedly, this might mean nothing more than that instead of a box containing a dozen pieces of a given product, it might be upsized (and up priced) to contain 18 of them. This seems fairly straightforward and it’s certainly nothing new to anyone who has ever shopped Costco and wondered how long it will take you to consume two gallons of olive oil or a bag of chips slightly larger than a sack of grass seed. Shrinkflation is rarely a concern.

Things get a little dicier when you take a closer look at what Costco-ized sometimes means to buyers and would be vendors. A few years ago, one of our portfolio companies created several food products that tasted great and were actually healthy as well. Eventually they approached Costco and were offered an opportunity to create a version for the stores.

But, as a cost saving strategy, it was suggested that they use margarine instead of butter and also change a couple of other ingredients. Of course, and notwithstanding how attractive the sales prospects might have been, they said “no” because they believed that those items would no longer be “their” products regardless of how they were labelled.

How often this happens, and frankly whether consumers could even tell or taste the difference, it was a warning sign that I recalled when the Costco Next materials highlighted that the items being offered were curated and selected by Costco buyers. I worry that far too much emphasis at these stores is placed on price, which is what you pay for something, while value is what you get. There’s no right price for the wrong product.