Tower Blog

A blog about smart POS software for independent small businesses.

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chasing a deeper customer experience

It’s a constant battle this software company caper. At McDonalds or Subway, you make the food, the customer pays and you’re on to the next one. You rely on Head Office to do the marketing and get the menu right. Your only focus is customer service.

Here we design the software, make it, deliver it, train people how to use it and even use it ourselves in our own business.

I’m not complaining, I love this business. Some days, though, it is daunting. We genuinely want to deliver a unique and valuable customer experience: in every call; in every software update; and, at unexpected times. This is where it gets challenging – finding ways to engage with customers which are genuinely valuable and unexpected.

We’re working on a new type of user meeting, one where we get a small group of users together to expose their businesses to each other warts and all. Kind of an adult version of show and tell but with a please help call at the end. The show part is a reports from our software. We’re inviting them to come along with a specific set of reports – all the same for the businesses attending and for the same period.

We’re billing this as a self help group but with our people moderating, keeping things moving and providing insight into some of gems hidden in the reports.

The challenge, if our trial of this format works, is to package it so that we can get to our 2,000+ customers. Each session will include 5 or 6 businesses and run for 3 to 5 hours. There will be follow up and further training.

We’re not charging for participation as we see this event as another way we can dedifferentiate ourselves from others in our space. It’s not something Microsoft or MYOB would do for small business. It’s the difference between the local burger shop and McDonalds. Yes it’s hard work but it’s also an opportunity for joy when an attendee calls a few months later to say thanks.

Software companies have an obligation beyond the sale to make sure that the rewards we promise are achieved, particularly in the small business area. The software itself is not the solution, the day to day assistance, encouragement and advice is what the end user is really paying for.

Our first round table session is next week so maybe I’ll report back here how it went.

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The startup as as mistress

My company turns 25 in January next year. While we continue to record good growth we’ve parented a small start up this year, investing around $30,000 and are a few months away from another start up which is a million dollar investment.

Starting new businesses is both frightening and exhilarating, especially if you are playing in a space foreign to you. We are more than a year in on the bigger of the two new ventures and we still have several months work to do. The only experts we could draw on are working with potential competitors.

We’ve funded this new venture so far and are about to seek capital outside to extend our intellectual resources and capital. Having not been in the need of capital for 25 years it’s an interesting situation. It’s compounded by the difference between the new business and our existing business and the possibility that the new business could eclipse the existing business in a couple of months if successful.

I am enjoying the dilemmas along the way but am concerned for the existing team and that the focus on the new business might think their efforts are not the main game anymore. While we have been open (internally) about our plans and included existing team members along the way, there is little feedback to indicate their feelings.

When you are $200,000 or so into a new venture and still months away from even getting close to any revenue it’s not unexpected that some doubts surface. Given the age of Tower Systems I feel as if I’m seeking a teen bride by pursuing this start up. Ridiculous as that may sound to some, I am sure there is a similarity in feelings. For example, the excitement of the start up takes one back to decades before. I wonder if I’m pursuing this for the same reasons a bloke married for 25 years would pursue a teenage girl: to prove he can; to feel younger; to find a goal in life beyond the mundane? I don’t think that’s me as this start up has an important social value for the community and a specific small business sector. We have built into the model a stakeholder dividend without the need to be a capital investor.

In the meantime I’ll find off the feeling I’m being unfaithful while enjoying playing with the startup and encouraging it toward its first steps.

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Australian workplace changes are uneccessary and divisive

I am watching, reading and listening to the stories about the Federal Government’s proposed workplace changes and wondering about the impact on the employer / employee relationship. To make their case the unions paint employers as bad guys. To make their case the employers paint the current system as bad for business. The government says nothing (much) changes. The opposition says the world as we know it will end.

Caught in the middle of this are workplace relationships, especially in small business where employers and employees are close, friends even. Are the advertisements getting traction with either side? Are we more suspicious of each other since the campaigns started.

I’m not keen on the changes. While I think the current unfair dismissal laws are open to abuse (I know of employers who have settled for $5,000 rather than spend $10,000 on a case) I don’t see a need to legislate away basic rights which employees have come to enjoy. I appreciate that retail is now a 24/7 business (almost) however, I still see no reason to wind back employment terms as forecast.

I suspect the winners of the proposed legislation, if passed, will be big business. I would expect than many small businesses like mine will not alter current arrangements which have served the business and the employees well.

The legislation seeks to serve a one size fits all world. I am more interested in a cooperative arrangement which does not rely on legislative and contractual change for support.

I wish the government was spending its resources on measuring the social responsibility of business and obliging us to do more for the environment and the community. This would deliver greater economic benefit than these workplace changes.

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Help for struggling small towns in England

The Retail Enterprise Network is using a grant from European Social Fund’s Equal programme to improve the social, environmental and economic ‘health’ of selected retail districts and communities within England. The initiative is helping communities including independent small businesses to revilatise town centres. More at the retail Enterprise Network website.

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Social responsibility of suppliers to big and small business

Corporations have an obligation to maximise shareholder value. They also have an obligation to be socially responsible. A corporation’s commitment to social responsibility can be understood by looking at how it treats small business compared to big business.

As I have blogged in another place, Vodafone has set a commission structure with at least one national supermarket chain paying a 16% commission on sales while paying small business newsagents a commission of 5% on sales.

The difference between what newsagents are paid compared to supermarkets is breathtaking and says something about Vodafone’s commitment to small business and those who work in small business. The more small business is squeezed like Vodafone has done the fewer small businesses there will be. This means fewer jobs, less choice and more of a clone retail landscape.

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Social responsibility index

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Further to my post ten days ago calling for businesses to have a sign like this at their entrance, what is manufacturers labeled their product with these for measurements.

Think back to the 1990s and the sweatshop campaigns. While I am sure sweatshops continue today there is no easy way for consumers to be informed at the time of making a purchase.

As a consumer I want to make the right purchase. As a supporter of independent small business I see that this group has the best opportunity to be seen to be doing the right thing in terms of social responsibility. If only the government would introduce a system of transparent measurement and reporting on social responsibility measures.

I’d like to see labels like the one above on all items so we can stop supporting business not doing their bit for the community and the evironment.

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Wal-Mart hate coverage

Wal-Mart is copping a bagging from all round the place and while that may not be unusual for a company this size, the stories in the last week are particularly strong. From MSNBC: Wal-Mart’s Giant Sucking Sound; from the Manteca Bulletin: 50 join forces to stop Wal-Mart. There are many more like these and the giant behemoth pursues growth.

I have no problem with a business pursuing growth. However, when a business is the size of Wal-Mart it has obligations. It’s entry into a community kills businesses for sure. Government has an obligation to ensure social and economic balance. This is why our government should be looking at work being done in the UK and the US in this area.

When a community says it does not want a national or international retailer moving in the government should listen.

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The shop floor is a leveling experience

I own a software company and a retail business with two stores. I spent over three hours today (Saturday) on the shop floor doing regular retail stuff: answering questions; serving customers; cleaning and staking shelves. It’s good leveling work. After three hours my body felt like it had been working for a full day, I was ready for a break.

Every single thing I did on the shop floor today related back to what we do in our software company in some way. I come away from these real life experienced more committed to saving time, streamlining processes in the software, improving the employee and therefore the customer experience and finding ways for independent small businesses to continue to act personally yet to act with more consistency.

This time in the retail business is like time in a client’s business. It is part of our social responsibility as a software company to strengthen the connect with our clients and to understand their needs.

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Less technology better in retail

Technology is getting in the way of customer service. Yeah that may seem odd for me to say given that I own a technology company. So be it. I was at the supermarket a couple of days ago and asked the checkout person a question, they tapped something on their keyboard but said nothing. I asked the question again. They then pointed to the LCD screen facing me. The information I wanted was there. I went through the rest of the transaction assuming they could not speak for some reason. At the end of the sale when they handed me the receipt they drones “have a nice day” and moved to the next customer.

While this one experience may not reflect what happens at all supermarket checkouts, it certainly made me wonder about all this technology being put at the counter, especially the customer side technology. It’s like a defence wall being built to protect the retailers from their customers. I hate it as much as I hate these self service checkouts.

While some customers from my company have asked for LCD displays and other intrusive devices (beyond the usual slim customer display) for the customer side of their counter, thankfully most have not, preferring to provide human based customer service.

Friendly knowledgeable customer service is the point of difference small business can win – if it embraces the opportunity wholeheartedly. Sure use the technology but keep it low profile, focus on human to human contact as much as possible. Customers love it and will remember the experience. Especially if bigger business competitors in your space are more focused on technology solutions.

The more technology you have at the counter the greater the opportunity for customer phobic sales staff to hide behind it and not interact and that’s not good for any retail business.

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A lesson in how not to sell from Servo Savers

Servo Savers have been chasing my retail business, trying to get us to be part of their fuel discount program. Their latest pitch came today in the form of a call from their sales representative for our area. He was rude, obnoxious and threatening. I had said I would not consider meeting with them unless they provide up front an outline of what the costs would be. He refused and said I was the only one who ever demanded such information. he told me my business would suffer and may even not survive without Servo Savers. He said he had Harris Scarf, Priceline, the Kodak shop and a couple of others ready to go and wanted my newsagency in for the area. He brown nosed so much about me and my business it was embarrassing. In fact, he had no idea and was throwing everything (compliments and threats) in an effort to interest me.

I have a loyalty program operating in my business. It’s just over a year old and is responsible for 28% sales growth. It rewards customers from within the business. The Servo Savers model is built around fear about high petrol prices. It would drive my customers to petrol outlets where they can purchase what I sell in my shop./ That does not make good business sense to me. I mentioned this to the sales guy and he went off on a rant about how I don’t care about how much my customers pay for petrol. It was time to end the call.

This call was a reminder about the sales process and the damage which can be done in a high pressure sales situation. This guy lost me from any future pitch he might make and indeed any pitch from Servo savers. They ought to be more careful who they have representing their company.

The call was also a reminder to review sales processes our team follows and ensure that their pitch is professional and respectful.

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Why independent retailers matter and do they ever think about it

In this post a while back I listed 10 reasons why independent retailers matter. I was reminded of this yesterday when working on a business plan for a start up we are developing. It is one thing to look from the outside and say this is why a particular channel or a business exists, it is entirely another for the founder of the business to have such views. If the owner does not have a view as to why the business exists and why the community needs such a business then surely it will drift and ultimately close. Just existing as a business gives you no rights at all. You’ve got to deliver genuine social as well as economic value.

I got drawn into a deep canyon of thought about this while considering the business plan for this start up. I want to ensure that we have a solid and purposeful foundation for existing and that these ‘principles’ are part of our day to day operation.

Back to my earlier post on independent retailers. If they don’t understand and believe in why they matter then their future will be limited. It’s one thing to berate consumers into buying local and another entirely to have independent and local retailers to operate their businesses delivering and delivering on their value to the community.

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Mandarin user meeting a success

Our first even Mandarin language meeting in Melbourne yesterday was a success with good feedback encouraging us to do this more. Next stop, Sydney where we have even more Mandarin speaking users.

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Our first Mandarin language software training session

We have a bunch of our Mandarin speaking clients coming to the office for a Mandarin only user meeting. This is a first in our channel and from what I can determine a first for small business in Australia.

We have been offering Mandarin and Cantonese language support for over a year and felt it was time to provide a group training session in a language our Mandarin speaking users are more comfortable with.

While each of these clients speaks English we have found from our Help Desk that Mandarin communication is more likely to lead to a better outcome.

If the session goes well in Melbourne today we will host another in Sydney. We will wait for feedback from those attending to determine if it is worthwhile.

While there is a business outcome for us if today’s session is a success, our investment in this strategy is also about being true to ourselves and our service goals for all clients and not just those who speak English.

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Konica Minolta disappoint

We have bought three monster Konica Minolta digital copies machines over the last year and a half. Two colour one black and white. Our total spend is in the vicinity of $65,000. We’ve been using these machines plenty, often spending above $4,000 a month on per copy charges. Konica have just rewarded us for our loyalty and our significant business by increasing our per copy charge. A request that they reconsider this met with a refusal.

What galls me about this is my discovery that a colleague is getting a much better deal than me having bought just one machine and generating less per month revenue for Konica.

Maybe we’re just bad negotiators. The Konica representative told us it was the best deal ever. We are feeling burnt by this and would not recommend Konica copies to anyone.

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Banks realise they are a service business

It’s taken many years but it seems Australian banks have finally realised that they were wrong to run from customers and close branches. According to today’s newspapers the major banks are busy opening or planning the opening of branches. Duh! Banks are service businesses. By opening more branches and providing better customer service sales will increase as will profits. While retreating from customers might have lowered costs, the benefits were short term. Customers soon started drifting to banks which offered service.

Of course the banks are not opening these extra branches as a community service. This is still about profit and it fixes their earlier mistake.

It’s frustrating that while most of the banks stumbled over this customer service issue small business, in the main has remained focused on delivering good service, locally.

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Green Power; another step to being socially responsible

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We are pleased to have now done everything necessary in our two biggest offices to permit us ton declare our Green Power credentials. We’ve joined 100,000 homes and 5,000 businesses in Australia.

We have committed to this to directly reduce the emission of harmful greenhouse gases in Australia and to contribute to a healthier environment for future generations.

We’ve not done this lightly nor without thorough research. Having considered various options we have elected to pay a premium for green power over regular power.

Given our commitment to social responsibility the moderate additional cost was not a factor in making the decision.

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Anyone want a four year old phone system?

This road of social responsibility is challenging. We have just replaced our Head Office phone system with new gear while will help us better serve our small business constituency. Rather than sell the four year old system and handsets we have replaced we had the bright ideas of offering it to a charity for their own use. This is proving harder than we expected. Sometimes giving something away is harder than selling it.

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Me too loyalty schemes are lazy

With both supermarket chains pushing their fuel discounts heavily many small business retailers are joining similar schemes connected to independent fuel outlets. It seems to me that these small businesses are copying the giants because they fear it is the only they can compete – by offering the same.

This is nuts.

Fuel rebates are so common that I don’t trust them. There is no point of difference any more. I don’t trust that it is a discount off an already fair price for fuel. I don’t trust that there is any element of reward in the offering. Okay I am probably in the minority – a space for cynics. However, the reality is that Australia now has 6 or 7 fuel discount offers.

The other aspect of the fuel offer which does not make sense to me from a small business perspective is that I say thanks to a customer for shopping with me and reward them by saying, hey, go buy some fuel and there’s your reward. Why can’t I offer a reward from my own product offerings? It seems to me that I have more control and more to gain by offering reward from in house.

In house rewards allow me to be more flexible, they can be used to encourage a higher spend from the customer and they make me work smarter within my business.

Fuel discount programs being offered (pushed) on small businesses have a cost and drive traffic elsewhere and that’s where I have big problems. They are the easy way out. In the case of newsagents, offering fuel discounts as part of a loyalty strategy drives consumer traffic to retail outlets which compete with newsagents. Surely there is more to gain by rewarding newsagent customers by offering discounts on newsagent product?

Coles and Woolworths control the fuel outlets they are driving consumers to. They have purchased and established these outlets in response to consumer research. Small business does not have the same needs to move traffic cooperatively between their businesses and fuel.

Small businesses are better off rewarding from within and with a view to generating incremental business within. The win is better in your pocket.

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The Latham Diaries, worth reading

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Apropos of nothing which I usually talk about here…

I’ve read The Latham Diaries cover to cover. I’ve also read, seen and heard much of the commentary about the book.

The book is well worth reading, especially the essay at the front of the book. I was surprised that only a few commentators have commented about the essay yet this is what provides context for the diaries and context for how Latham feels today.

I’m not a Labor voter nor do I have any axe to grind with any side of the politics involved. When it comes to Federal politics, I’m an average swinging punter.

This book exposes politicians, media and the cynical self serving political process. The selfishness, lack of intellect and lack of humanity are a shock. The media compliance in publishing spin as reporting, while not entirely unexpected, is disappointing. While I accept that there is some spin in the book, that there has been corroboration of key claims encourages me to believe more of the book.

Mark Latham has done Australian voters a service in publishing this book. I wish we could have such a frank expose from the other side of politics. Then we could clean the parliament out and start again. Latham was as bad as the others while he was in parliament – playing the game and not believing enough to be open with the constituency.

While I am disillusioned with Australian politics and those who represent us, on all sides, I am pleased to have this insight which until now was unavailable to me.

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Corporate social responsibility index, a common measure by which businesses can be compared

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I’ve been thinking about my earlier post on this and have played around (with a graphic designer) with what a label could look like which shows the responsibility index for a business.

Just as manufacturers label processed food to indicate its nutritional value, we could label businesses so we could know if they are good for our community and the environment.

Yes it would be challenging to agree on common measurements. Vested interests would try and spin the measurement process to suit their needs. Consumers need to be in control every step of the way with focus solely on what is best for the community.

It is important to take corporate responsibility out of the equation of measurement of the success of a business and replace this with social responsibility covering the four parameters noted above.

Sure it’s a hard road for business. However if we want to leave something behind beyond our last profit and loss statement it is a road we must travel.

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The perspective of travel

I was in Singapore for most of last week and was reminded of the value of leaving the business for a while to gain perspective. Away, some issues don’t seem as important as they seemed when closer. Other issues seem more so. I find this type of travel, overseas and for a few days, like spring cleaning for what’s on my mind. So, next week will be about refocus, ensuring priorities are right for the run home to the end of the year.

So much of running a software company like ours is about agenda setting, innovating for our chosen marketplaces while at the same time taking care of the core needs. Constantly moving so that the software we develop improves in value. This is crucial to generate the support revenue necessary to feed the infrastructure necessary to provide support.

One of my take aways from this trip is the need to focus more on transactional detail. While some customers like big picture stuff like new reporting tools or deep analysis of their business, for most it is about shaving 100ths of a second off this or that function so that their business is more efficient and so that they can serve their customers better. This time travel has allowed me to see good and bad execution of technology in the retail situation. This is where we can and will help our small business customers.

And Singapore? A wonderful city. Lunch in Little India eating off banana leaf was a treat as was dinner at My Humble House.

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The “nice day” chant wears thin at the end of the sale

I was at a clone coffee shop, no, not Starbucks, in a foreign city this past week. I went to the same coffee shop twice and each time the words used when my coffee was ready were the same. Small latte, nice day, next.

Since when did “have a nice day” truncate to “nice day”. I never really liked “have a nice day” because of the lack of feeling with which it was often delivered. Also, I didn’t like the obligation of it – in the giving and the receiving. But I accepted it as part of the Americanisation of our culture. I even use it occasionally when working behind the counter in my retail business. Not all the time, just when it feels right.

So, twice in this one coffee shop “have a nice day” became “nice day”. When it happened the second time I wondered if the suits at a far off office had decided to cut the two words and save time or whether it was an efficiency push at this store or by this employee as a lone crusader for efficient communication. Who knows? I didn’t ask so all I can do is speculate.

Regardless, it’s nuts. “Nice day” could be a commentary on the day, a command to me or pure laziness.

I suspect that this employee was so busy and they were stepping through the motions of each sale as mandated by the corporate manual that without thinking and that “nice day” was another tick in the sale process they needed to deliver every time to ensure compliance.

What a waste of time.

The coffee was good and that alone would get me back there. Not the consistently frustrating service. Not the mediocre compliance with operation guidelines.

What is the world coming to? Not this truncated retail speak I hope. We ought to encourage and cheer individuality in our businesses. Individual social interaction is an important part of any transaction.

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Too often the weakest in society bear more than their fair share of costs

Small business, a crucial part of any economy, bears more than its fair share of costs. We pay more for products than big business; put more into in store marketing; provide better and more expensive service; (probably) pay more tax per dollar earned; and give more back to the community.

I was thinking about this today when blogging elsewhere about a decision by Vodafone to cut the commission newsagents earn for selling their product by 37.5%. This is the second cut this year by the big business Vodafone. It’s hurting this small business channel.

It seems to me that small business is hit with such cuts first. We bear the brunt of cutbacks and fee increases. Primarily because we do not have negotiating power. yet we generate more economic benefit.

Newsagents are responding by pulling down Vodafone signage in their stores. A protest is forcing. While I am not sure where I sit with such a protest I can understand the frustration of small business newsagents. Like any small business channel they seem to get the raw end from big business too often.

What Vodafone has done is appalling and greedy. If the face of strong profits they have hit hard at the retail channel which is their face to the consumer. They have seen newsagents invest in infrastructure on the basis of a revenue model and then hacked away at the revenue model. Bad form Vodafone.

This is but one story about big business arrogance against small business. Small business need to fight for itself.

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Self checkout dehumanises retail

With the installation of self checkout technology by major retailers increasing rapidly I was glad to have an opportunity to touch and play with a unit first hand this week. What I noticed immediately is that purchasing is a lonely and technology driven event. No smile, no chat about the weather, just you and the machine. You and some cold and heartless metal.

While those companies adopting these technologies will spin that they cut costs and the savings mean cheaper product, they dehumanise retail and without human interaction what is retail anyway?

These devices are not progress. They are about retailers telling consumers that they make more money by interacting with them less and that’s bad for society.

Having played with a self checkout unit I see them as an opportunity for small business retailers. By increasing human contact and the quality of that contact we can reinforce the social value of small. We can demonstrate that self checkout is about profits for the big retailers, profits at all costs.

If I were in a situation where a competitor was about to install self checkout I’d have a campaign running already. Hit them hard and long. Machines don’t smile. Machines don’t share anecdotes. Machines don’t follow football. Machines don’t make mistakes. Machines don’t have a family to support. Machines don’t contribute to the social fabric of our society. Machines won’t add value to the business transaction like a cooking tip.

Sure we can codify some of these requirements into technology. I don’t want codified emotion or social interaction. I want human interaction. Otherwise what’s all this for?

Self checkout dehumanises interaction in each store where it is implemented and this affects the community around it.

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The Latham Diaries; a retrospective blog

Unrelated to what is usually posted here; I am two thirds of the way through reading The Latham Diaries. Regardless of your politics, this “occasional diary” has all the hallmarks of a blog except that it’s been published on the page. I’d like to see Mark Latham blogging today on the reaction, personal and public. Through such a blog he could engage in a dialogue which demonstrates the power and connection of the medium as well as continuing the discussions in the book, particularly those in the essay which precedes the diary entries.

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