Podcast’s rising popularity and implications

When a new service/product rises, it usually elevates several support services/products as well. For instance, smartphones’ popularity was piggybacked by the rise of support services or products such as phone maintenance, smartphone cases and applications. The same case can be applied to podcasts. As podcasts continue to capture consumer interest with 2018 as the banner year, I suspect that support services and the whole podcast ecosystem will come alive in the near future.

Content creator

The presence of Spotify offers content creators an additional stream of revenue. If featured, creators can earn money whenever their content is consumed, in the same way that artists are compensated for their songs. Of course, content owners can still generate income from the tried-and-tested method of advertising. But having two streams of revenue is definitely better than having only one, isn’t it?

In extreme cases, some podcasts can be acquired in exchange for exclusive access as platforms engage in a hunting race to woo users. Creators with unique insights or knowledge will be better compensated for their hard work than they would in the past. Hence, niche podcasts will be springing up like mushrooms after the rain.

Content platform

Content creators can publish their work everywhere now, whether it’s Apple Podcast, Stitcher or Spotify. A normal piece of content is hardly exclusive. However, a platform needs exclusivity and original content to differentiate itself. Hence, if you are a comedian or an expert in a field such as archaeology, astronomy or economics and you deliver great content, you may be cast for an original show and earn money for your knowledge. Platforms are likely going on a shopping spree to secure highly sought-after content just like Spotify did with the acquisition of Gimlet Media. That way, the acquirers can reduce marginal costs to almost zero and become more profitable as the rate of consumption grows.

Support services

We already saw Anchor, a startup that specializes in podcast distribution, acquired by Spotify shortly after Anchor was founded. As more podcasts are created, marketers need tools to easily edit audio and turn audio into text. Transcripts will facilitate interaction with users and a boon for their SEO. In that sense, I expect that startups such as Descript will see more opportunities in the coming months.

More podcast consumption means rising interest from advertisers. As a consequence, there will be demand for data analytics to optimize advertising. Brands will be willing to pay to link podcast advertising with conversion into actual purchase, whether the purchase is online or offline.

Book: The Kite Runner

This is my second book by Khaled Hosseini after the wonderful A Thousand Splendid Suns and it didn’t disappoint. The Kite Runner is an account of the life of Amir, the son of a merchant in Kabul Afghanistan. The book covers his life from Afghanistan to America and back to his hometown after a few decades to deal with his unresolved matters from the past. Saying more than that will be equal to the act of spoiling and disservice to the book and future readers, so I stop here. But the book is another gut-wrenching and moving work by Khaled Hosseini.

Tired of business and self-help books, I had decided to pick up novels to stir things up. Well, after the two emotionally charging novels by Hosseini, I think I am ready to go back to the mundane books for now.

“I wondered if that was how forgiveness budded; not with the fanfare of epiphany, but with pain gathering its things, packing up, and slipping away unannounced in the middle of the night.” 

“There is only one sin, only one. And that is theft. Every other sin is a variation of theft. When you kill a man, you steal a life… you steal his wife’s right to a husband, rob his children of a father. When you tell a lie, you steal someone’s right to the truth. When you cheat, you steal the right to fairness… there is no act more wretched than stealing.” 

“And that’s the thing about people who mean everything they say. They think everyone else does too.” 

“For you, a thousand times over”

Direct flights to the US from Vietnam

Last week, the US Department of Transportation’s Federal Aviation Administration (FAA) announced in a press release that Vietnam’s aviation industry meets the international safety requirements. The approval means that Vietnam carriers can now open direct flights from the S-shaped country to the US.

It is a huge announcement. There are hundreds of folks traveling back and forth between the two countries on a daily basis, whether it’s for business, leisure or just a quick family visit. As of this writing, flights from Vietnam to the US have at least one layover. If you live in a less popular city like myself in Omaha, it will require at least two stops. In my experience, it took me 3 stops and at least 33 hours for a one-way trip. Layovers are just a waste of time. It’s not just about the time spent at the airports, but also about the hassle in scheduling.

Direct flights will definitely ease the pain and facilitate the travel between the countries. It’s a boon for tourism and commerce. So much productivity can be saved. American travelers will be more tempted to visit Vietnam as the first destination in the region when the flights are no longer as long and taxing as they were.

I am really excited about this development for my country. Becoming a flight hub matters a great deal to our tourism and economy. There is still a very long way to go, but it’s a bright first step. I really hope the carriers in Vietnam will jump at this opportunity.

Even the greats don’t know it all

I usually take notes of interesting facts, less-known stories, great insights or exciting business ideas for later use. As I went through the notes today, a few interesting stories on Steve Jobs and Peter Thiel stood out. These two are legends in the startup, business and technology world. They are often looked up to as visionaries and outstanding business individuals. And they really are.

But they are not Gods. World-class brilliant as they are, they don’t have a crystal ball or have all the ideas all the time. In other words, they are just humans like us. This is not to downgrade them in any way. Just a reminder that we should learn with a grain of salt, even from the established legends, that it’s normal to make mistakes or miss the boat and that the luck of working with great colleagues/partners and being at the right place at the right time is hugely important.

Steve Jobs on iTunes

But Steve Jobs, of course, had a legendary stubborn streak of his own. Jobs had always conceived of the iPod as a way to sell more Apple computers. He was still married to the idea of the Mac as the digital hub, so he was reluctant to bring iTunes to Windows machines (and thus, the majority of computer users). “It was a really big argument for months,” Jobs recalled, “me against everyone else.” Jobs declared that Apple would do a Windows version of iTunes “over my dead body.” Only after Apple executives showed him business studies that proved Mac sales would be unaffected did Jobs capitulate, saying, “Screw it! I’m sick of listening to you assholes. Go do whatever the hell you want.”

From the book: How the Internet happened

Steve Jobs on App Store

The original, App Store-less iPhone was very much Steve Jobs’ platonic ideal of a closed and curated computing system, a perfect, hermetically sealed device. For several months after the iPhone’s launch, Jobs was actually vocally opposed to the very idea of an app store, refusing to let outside developers infect his perfect creation. He told the New York Times: “You don’t want your phone to be like a PC. The last thing you want is to have loaded three apps on your phone and then you go to make a call and it doesn’t work anymore. These are more like iPods than they are like computers.”

In the end, the battle to do an app store was a replay of the argument over opening up iTunes to Windows users a few years earlier. Just as before, everyone inside Apple wanted to do it, and Jobs kept saying no. But in the end, just as with iTunes, the result was the same. Jobs finally caved, telling those who had been haranguing him, “Oh, hell, just go for it and leave me alone!”

From the book: How the Internet happened

Peter Thiel on Facebook

In the interview below, Peter Thiel (around 7:20) admitted that he didn’t think Facebook was going to be as big as it turned out to be, claiming that he would have been happy with Facebook signing up only college students in the US.

Stories like these are not rare. If you know some, feel free to share in the comment.

Book: A thousand splendid suns

The book is a captivating and breathtaking story with the violent events in Afghanistan from the 1970s to 2000s in the background. The two main stories surround two female characters: Mariam and Laila. The author walks us through the injustice that the two protagonists had to suffer. The first 25% of the book was about Mariam, followed by the section on Laila and later their life together, which accounts for half of the book.

As a Vietnamese, I almost have to apply for a visa to every country that I want to travel to. It means a great deal of paperwork, time and money involved. Sometimes, it frustrates the hell out of me as I look with envy to many of my friends from the US, Canada and EU whose nationalities allow them to travel almost everywhere the very next day with little trouble. However, I felt tremendously grateful for the life I have whenever I read books on North Korea or books like this one. They really make me look at things from a perspective. Somewhere around the world, the life I am leading is a luxury to many and something I should cherish.

It’s horrifying and unthinkable to know that women in some countries in the world are treated so badly, in the way that the two characters were in the book. For all the scientific advancements we have had, we still have much on this front to solve. I hope that one day, women everywhere will be liberated and given as much freedom as men are and have always been.

If you are looking for a great page-turner, I highly recommend this. Below are a few beautiful passages I appreciate a great deal

“And the past held only this wisdom: that love was a damaging mistake, and its accomplice, hope, a treacherous illusion. And whenever those twin poisonous flowers began to sprout in the parched land of that field, Mariam uprooted them. She uprooted them and ditched them before they took hold.”

“Miriam wished for so much in those final moments. Yet as she closed her eyes, it was not regret any longer but a sensation of abundant peace that washed over her. She thought of her entry into this world, the harami child of a lowly villager, an unintended thing, a pitiable, regrettable accident. A weed. And yet she was leaving the world as a woman who had loved and been loved back. She was leaving it as a friend, a companion, a guardian. A mother. A person of consequence at last. No. It was not so bad, Miriam thought, that she should die this way. Not so bad. This was a legitimate end to a life of illegitimate belongings.

“She would never leave her mark on Mammy’s heart the way her brothers had, because Mammy’s heart was like a pallid beach where Laila’s footprints would forever wash away beneath the waves of sorrow that swelled and crashed, swelled and crashed. ”

“Marriage can wait. Education cannot…Because a society has no chance of success if its women are uneducated, Laila. No chance.” 

She sat on the chair instead, hands limp in her lap, eyes staring at nothing, and let her mind fly on. She let it fly on until it found the place, the good and safe place, where the barley fields were green, where the water ran clear and the cottonwood seeds danced by the thousands in the air; where Babi was reading a book beneath an acacia and Tariq was napping with his hands laced across his chest, and where she could dip her feet in the stream and dream good dreams beneath the watchful gaze of gods of ancient, sun-bleached rock.”

A quick explanation on revenue management in hospitality industry

I was lucky enough to have a short amount of time working in the revenue management in the hospitality industry. Personally, I think it is the most exciting part of the industry. There are a lot of moving parts and many factors to be taken into account before a decision is made to maximize revenue. Below is a rough explanation on how it works

Properties have two types of end customers: individual guests who seek for short term stays and corporations which may combine meeting & convention needs with accommodation. Both are represented by the green color. Meanwhile, there are two main intermediaries between properties and customers: travel agents and online travel agents (OTA); both of which are represented by the blue color in the diagram. Properties can also communicate directly to customers.

There are multiple ways in which properties can communicate to individual guests. Guests can call, book via websites or just walk in to book rooms. However, there is only so much a property can do in terms of advertising and marketing. Relying solely on its self appeal, it’s unlikely an average property can fill up its rooms. Hence, it needs travel agents and OTAs such as Booking.com or Expedia. These agents combined can expand a hotel’s reach to a much bigger audience. In return for their services, properties need to compensate the agents.

With regard to OTAs, they will take commission that ranges from 13% to 25%, depending on negotiations between the two parties. They will take payments from guests, save their cut and pass along the rest to properties. Regarding travel agents, room rates are usually combined together with other items such as F&B, transportation and sightseeing, to name a few. Hence, it’s difficult to single out how much they charge for rooms, but it is sure that properties have to give travel agents a lower rate than what is publicly available, meaning that Rate 3 is usually lower than Rate 1 and 2. Otherwise, why would they be motivated to sell on behalf of properties and how would they cover operational expenses? Both travel agents and OTAs check public rates (Rate 2) on properties’ own websites very regularly to make sure that the rates they receive are beneficial. Sometimes, I received calls or emails from agents, asking why their rates were higher than the ones on our website.

As properties have to compensate agents, the question is why. The answer is volume. Travel agents and OTAs bring more bookings to the table and ensure that properties are filled up faster. Hence, a big part of revenue management is to balance out volume and margin. If occupancy is low, properties need to push on all cylinders with attractive rates to sell rooms. As occupancy inches upward, rates need to be raised to maximize the revenue. For instance, if a hotel has only 10 rooms available for a certain day in the next 7 days and is confident that it can sell those rooms directly based on historical data, it makes sense to not sell those rooms to travel agents.

Partnership with agents is more important when it comes to foreign markets. A property in Vietnam welcomes guests from many countries in different continents. Without local partner agents in foreign countries, how could the property reach out to international guests?

The same dynamic between individual guests, agents and individual guests is similar to that between corporate customers, agents and properties.

A property’s room inventory on a given day is limited and perishable, meaning that if a room is not sold, the room night is gone forever. Hence, it’s imperative that a hotel try to sell as many as possible. On top of that, the job of a revenue management person is to maximize the revenue. Below is the list of factors that can influence revenue, including but not limited to:

  • Rates
  • Occupancy
  • Seasonality
  • Competitors’ rates
  • Holidays, local special events
  • Room types & their availability (A suite is sold at a higher rate than a standard room. Hence, if you can sell a suite, why shouldn’t you?)
  • Promotions
  • Historical pick-up rates
  • Historical cancellation rates

In a highly competitive industry such as hospitality, rates have a lot of sway over a booking decision. If you look for rooms in a certain city on Booking.com, a difference of $2 or $5 between comparable properties is pretty significant. It’s easy to sell rooms by lowering rates, but what is the point if no profit is materialized? The hard part is to be able to fill up the rooms and make profit, but it’s also the exciting piece of the puzzle. You have to process a lot of data on a daily basis to make informed decisions, but working in the revenue department allows you to have a pretty good understanding of a hotel’s business. And that’s also what excited me.

The system needs to be improved and we need to be better

I came across some disturbing facts today. According to the USAToday, below are a few ramifications from the most recent shutdown:

Almost a quarter reduced or eliminated spending on health or medical expenses for themselves or their family

One in four visited a food bank

Forty-two percent took on new debt to pay for day-to-day expenses and bills. Two in five turned to family or friends, while one in five borrowed from a bank or credit union

Meanwhile, the Federal Reserve Bank of New York released the following:

Auto loan and student debts reach 1.265 and 1.442 trillion dollars respectively. Trillion with a T and one trillion is a thousand billion. Astonishing numbers. Clearly, something is horribly wrong right now when many Americans are living paycheck by paycheck and saddled with debt for things that are supposed to make their life better, namely education and cars. That’s not to mention mortgage or healthcare in emergency cases yet, but you should get the picture.

The facts above mean that many Americans will have little to almost no safety net. If a paycheck stops coming, all hells break loose. Debt payments wait for no one. Food must be put on the table. Utilities bills must be paid. Consequently, all the best years of our lives, theoretically, namely our 20s and 30s, are dedicated to just work and pay our debt. I mean, if we have to spend hours to just survive with little freedom, how is it different from modern slavery? How sad is it that we can’t afford to take time off to enjoy life because of the debt over our head? Or how frustrating is it to not have the freedom to choose and do what we want for the same reason?

I am no policy expert and I understand that it’s complicated to fix any of those issues. But there are things that we can definitely do, in my opinion, on an individual level because I totally believe that some efforts and adjusting our lifestyle can steer us away from a giant amount of debt.

Avoiding a high tuition tab

I met a few guys at UNO who dropped classes after already committing tuition fees for those classes’ credits. Two people in particular considered dropping out after two years into their degrees at the time. Understandably, there are some cases in which we all consider changing majors and hence, future career paths, but such cases are not the majority. Dropping out of classes is just an irresponsible use of money and time. Hence, finishing out classes and degrees will help us avoid getting more debt

I came to the US in 2016 with a graduate assistantship at school. In exchange for 20 hours working at school, I had all tuition fees and around 70% of my insurance waived. At University of Nebraska at Omaha, it meant around $7000 a semester, including summer courses. In total, I saved $49,000 of tuition fees after 7 semesters at school, let alone the insurance subsidy on top of that. If you don’t have a better alternative (a paying job), such a position can mean a lot of money saved and debt avoided.

Lower your textbook expense

High textbook prices are ridiculous in the US and Canada. Brand new textbooks which are usually required by professors for 4-5 courses a semester can amount up to $1,000. Being smart about how to spend on books can lead to significant savings. I wrote about two ways to save on book expense.

Take advantage of disruptions in education

Recent developments in the industry bring about more opportunities for affordable education for students. I wrote a bit about Lambda here. Basically, Lambda allows students to have intensive courses in IT with no down payment in advance. Upon graduation and after securing a job paying more than $50,000/year, students will pay back 17% of monthly salary for two years. The cap is $30,000 and if for some reasons, you get fired, no payment is required until you are employed again.

George Tech offers a $7,000 Master degree in Computer Science while WSJ reported the rising popularity of free college programs in certain states. If possible, take advantage of these affordable options. In fact, if you are an American or a permanent resident, you are luckier than immigrants like I am. The option above from Lambda is only available now to US Citizens or US Permanent Residents or EU Citizens. The rest has to make a down payment of $20,000.

Hold off on that new car

I traveled to Philadelphia last summer. A friend there told me about her roommate getting an auto loan for a new car on top of her 6-figure student debt. While I don’t think the story is typical of every student, it’s not an outlier either. It just doesn’t make sense to get a loan on something that doesn’t create value and instead diminishes in value over time. If a guy like Warren Buffett can live well and happily with an old car, I think broke students or graduates should be fine with driving used cars.

Study personal finance

It’s a pity that we don’t get to learn much about personal finance at school. I personally believe that it’s one of the most important things we should get out of college. Nonetheless, it will be immensely helpful to learn it in your free time and apply it to our life. A lot of our financial trouble comes from the lack of knowledge on personal finance and financial planning.

A look at Amazon financials (2013 – 2018)

My understanding of Amazon’s business model is as follows:

  • Successfully become a household online store for shoppers and build a loyal user base (Prime members in particular)
  • Leverage the infrastructure (supply chain) for the online store to allow sellers to fulfill orders and sell products through their stores (3rd parties)
  • Leverage the IT infrastructure built to maintain online stores to offer Enterprise IT services (AWS)
  • Leverage the immense traffic to its online sites and ability to turn traffic into orders to sell advertising services to brands

In my free time, I like to go through annual reports of companies to understand their businesses and performance, in addition to reading the news from sources such as WSJ, Techcrunch, CNBC, to name a few. I did it before for Adobe, Spotify and Apple. Below are my findings from digging through Amazon’s financials from 2013 to 2018. Unavailable figures are due to the lack of reporting from Amazon.

Amazon’s total revenue has been growing increasingly fast in the past 5 years

In terms of net income, except for 2014, it has been growing as well, with 2018 as the standout year

With regard to revenue breakdown, every segment, except online stores, has seen its influence on the total revenue grow for the past 3 years (two for physical stores). AWS, in particular, is making up around 11% of Amazon’s total revenue. Amazon started to report on physical stores’ revenue in 2017. As of 2018, it made up around 7% of the company’s revenue.

Despite making up only 11% of Amazon’s total revenue, AWS is responsible for the majority of Amazon’s operating income. The reason seems to be that the company lost money from its International segment

Much has been discussed about the growth of advertising and AWS. The two segments have indeed been impressive. Advertising has gone nuts for the past three years while AWS’ growth has never been lower than 42% since 2013

Shipping costs have been growing at a 2-digit clip since 2013, a concern that many analysts and investors expressed. However, the growth rate has slowed down since 2016

Expenses have been growing at a two-digit clip in the past 5 years

In terms of expense breakdown, Cost Of Sale is still the dominant item, though its contribution to the total expense has been declining steadily. There is one item called Other Expenses in the reports, but I decided to ignore it since it wasn’t significant compared to other items.

Amazon looks to have been successful in diversifying its business, transitioning to more profitable segments from merely relying on the low-margin online stores. With its dominant market share in the cloud and companies moving to the cloud, I believe AWS will continue to grow its importance to Amazon’s first and bottom lines. It also won’t be a surprise to see a middle two-digit growth this year for advertising.

Book: The Alice Network

Looking for a good book to read, I came across a list prepared on the gothamgal website. A fan of stories with the two World Wars as a theme since you can be entertained and learn some historical lessons at the same time, I picked out this book and it didn’t disappoint

The book is a two parter. It starts with a quest by an American teenager named Charlotte St Claire, to find her lost cousin in France after World War II while being pregnant. Her limited leads, fate and audacity to defy her mother in order to find out the truth led her to meet Eve Gartner, a retired British spy with a score to settle from her eventful past. As the journey to help Charlotte locate her lost cousin progressed, it turned from a search mission to a vengeance one.

If you are a fan of feminism and looking for a good, not too intense, story taking place in the background of post World War II, you may want to give it a try.

We are not flowers to be plucked and shielded, Captain. We are flowers who flourish in evil.

Humans of New York and Brandon Stanton

I am a big fan of Humans of New York. There are so many great stories told in just ordinary yet moving languages. Whenever I run into those stories, they just create beautiful moments in my days and lift the spirit a little bit. In the time when racism, lack of compassion and cynicism are dangerously present as our time now, stories like the one below offers a pure and beautiful break

Source: Humans of New York

I also recommend the interview between Tim Ferriss and the founder of Humans of New York. It’s an engaging and incredible interview shedding light on his story and the struggle he went through to have his photo project take off