Weekly reading – 13th August 2022

What I wrote last week

PayPal Q2 FY2022 Results

Business

Monzo growth. A fascinating story on the early days of Monzo, a successful fintech company from the UK

The Wolf in Cashmere’s Conglomerate. A fantastic podcast episode on LVMH and the empire that they have built

($) How One Grocery Chain in Pennsylvania Is Preparing for a Downturn. An interesting case study of how a low-margin business in a cut-throat industry is responding to the macroeconomic challenges. I wonder if these companies will keep lessons learned during this period long in the future. You know what they say, never let a crisis go to waste

Deckers Brands: “The Ugliest Shoes of All Time”

Multicultural Grocers Drive Sales by Catering to Increasingly Diverse America. It’s imperative for grocers to closely understand the social fabric of the areas where they operate. Folks from different backgrounds have different preferences. Grocers who make the best use of their footprint, aka maximize revenue per square foot, must appeal to as many customers and sell as many goods as possible. This will require efforts, focus and investments in infrastructure and tools. But there is no other choice in the ever highly fragmented and competitive world of grocery

Ad Tech Revenue Statements Indicate Unclear Effects of App Tracking Transparency. A very balanced and reasonable take on ATT. If you are interested, here is my take on ATT

Landmark “Self-Dealing” Arbitration Found Netflix In “Violation” Of WGA Contracts. It’s interesting to learn about contracts and compensation schemes in Hollywood

Other stuff I find interesting

China’s southern tech hub Shenzhen becomes first city on mainland to regulate fully autonomous, driverless cars on some roads. The Chinese may have autonomous vehicles on the streets before we do. I am not talking about a few vehicles or test drives. This is about a large scale adoption of autonomous vehicles. Technology alone is not enough. There are important questions that must be answered. For instance, who will be liable for damages in accidents? Are there regulations for that? Shenzhen’s regulations already took place; something that is not yet available here in the US, to my best knowledge. For me, that’s an encouraging sign and a big step towards the future that many envision.

Prison Money Diaries: What People Really Make (and Spend) Behind Bars. I felt angry after reading this piece. Even though violators of the laws should pay for their transgressions, as one of the most developed and richest countries in the world, we should build prisons that offer sufficient living environments to inmates. According to inmates, everything in prisons is pricey and they get increasingly more expensive over time. To buy goods, inmates have to work, although the pay is embarrassingly low. One receives $7 for 8 hours of work. And he said this: “If I work two sessions, that’s $6.68 per day. Almost nothing else in the Department of Corrections pays like this. Plus, during Covid, they gave us hazard pay — $2 extra per day. Last July, I made $334. The two primary things I spend on are: my phone credit account and commissary store purchases. The food at the chow hall is terrible and of poor quality — it’s not fit for a dog, seriously.” Google the prisons in Finland or Norway and see how badly we treat our fellow citizens.

Global Supply Chains of EV Batteries. A long yet excellent primer on the global supply chain of EV batteries. As everything around us requires batteries, those who hold power in this supply chain have tremendous advantages in the future

iOS Privacy: Instagram and Facebook can track anything you do on any website in their in-app browser. This is exactly why I support Apple in disabling cross-app tracking. Facebook and other advertisers have all the motivation in the world to collect data on us. They are financially incentivized to do so. It’s up to us and companies like Apple to tell them NO

No Great Stagnation in Guinness. Guinness is one of my go-to beers at a pub. It’s great to read a bit about how unique and quirky the business is

Europe’s remote, lost-in-time villages. “Life in Târnava Mare has barely changed in centuries, offering a precious insight into the age-old traditions that are still going strong in its Saxon villages.”

Stats

35% of Gen Z adults in the US don’t trust colleges and universities in the country. Wow!

Adobe’s Digital Price Index found that online prices dipped down 1% year over year in July

Organic fresh produce tends to be twice as expensive as conventional produce. However, conventional fresh produce had a bigger price hike recently

Source: Supermarketnews

Source: IEA

Weekly reading – 6th August 2022

What I wrote last week

Apple Q3 FY2022 Earnings

AWS, what a business!

Even with a loss of $2.6 billion, Uber had a great quarter

Business

($) America’s New Energy Crisis. A worrying report on the state of the energy supply in the US. Demand continues rise and unfortunately, so do oil prices. Projects to produce green alternatives take a long time to be completed and integrated into the national grid. “As U.S. power supplies tighten, developers are struggling to build these projects quickly enough to offset closures of older plants, in part because of supply-chain snarls. Another reason: It takes longer to approve their connections to the existing electricity grid. Such new requests neared 3,500 last year compared with roughly 1,000 in 2015, according to research from the Lawrence Berkeley National Laboratory. Typical time needed to complete technical studies needed for that grid approval is now more than three years, up from less than two in 2015. One renewable-energy developer, Recurrent Energy, filed more than 20 of these grid-connection requests last year in California, a state that needs more clean power to replace several gas-fired power plants as well as a nuclear plant slated for retirement in the coming years. It took the company seven years to get approval and construct a separate battery storage project in that state.”

($) JPMorgan Is Building a Giant Travel Agency. “It bought a booking system, a restaurant review company and a luxury travel agent. It is building its own airport lounges and a force of thousands of travel agents. A new website will launch in the coming months. JPMorgan estimates that its customers account for one of every three dollars spent on leisure travel in the U.S., though those customers book only a tiny amount on the Ultimate Rewards website. With the new offerings, JPMorgan executives believe the bank could capture $15 billion in bookings in 2025, five times what it handled before the recent buildup. That would make it the third-biggest travel agent in the country, based on 2021 volumes, according to industry publication Travel Weekly. The plan has risks. Travel-rewards giveaways have proved expensive for JPMorgan and other banks, and they haven’t always led to the lasting relationships the banks hoped for. JPMorgan also has important corporate partnerships with airlines and hotels that expect the bank to send customers their way. Some of those partners have already complained about the success of Sapphire taking away customers from their cards. The bank is already seeing early signs of that luxury demand. The average price Chase customers are paying for hotels is more than double the industry average, the bank said.”

From legroom to airfare: How JetBlue’s takeover of Spirit could change air travel. If you don’t know how expensive it is to travel domestically in the US, take a trip to Europe and try to fly within the continent. I was really shocked the first time I booked a domestic flight here. I am still shocked sometimes nowadays. There is competition between major airlines, but prices are still high because there is no regulatory pressure on a handful of airlines that fly customers. I don’t know if this merger will help anything. Having another major may drive air fares down. But it could as well join the fun and charge a lot.

US, Japan reaching for a 2-nm chip breakthrough. The race to secure semiconductor supply for the future amidst the political threat from China is more intense than ever. I don’t think China, regardless of whether Xi will be in charge, will give up Taiwan, home to TSMC. It’s not only because TSMC is THE fab of the most advanced chips in the world, but it’s also because China believes Taiwan belongs to them and has no rights to independence. Any nation’s leader will not fulfill their duty if they don’t think about hedging this risk. US and Japan are doing the right thing here. Better late than never.

Ad tracking rules could become much stricter in Europe; Apple’s ATT vindicated. Companies that rely on ads dollars should really pay attention. “This is the single, most important, unambiguous interpretation of GDPR so far. It backs up the approach of Apple.

($) Netflix Is Scrambling to Learn the Ad Business It Long Disdained. “One of Netflix’s goals was to secure a big “minimum guarantee”—a promise that it would get a large influx of ad revenue to limit its financial risk, say people familiar with the discussions. Netflix also hunted for a senior leader with advertising expertise, mindful that it knew little about the business of selling ads. The company approached at least two top Comcast executives for a senior role while the partnership negotiations were continuing with their employer, angering the top brass at the cable giant, some of the people said. Mr. Hastings has set lofty financial ambitions for the ad business. He and other company executives have told investors and ad industry executives privately in recent months that Netflix will eventually be able to charge advertisers about $80 for every 1,000 views of an ad by helping them target specific audience segments, people familiar with the discussions said. That would put Netflix among the most expensive destinations for ads, alongside top NFL television programming. Creating an advertising-supported tier isn’t the only about-face the company is making in its quest to revive growth. After years of treating password-sharing by customers as a marginal problem—Mr. Hastings said in 2016 he loved the practice—Netflix plans to begin charging households a sharing fee sometime in 2023.

Chip Makers Have a Message for Car Makers: Your Turn to Pay. The ever-growing demand for chips turns the negotiation tables around. Chip manufacturers now command more bargaining power than they ever have. Car producers have no choice but either put up or shut up. As every car company is now racing to bring electric vehicles and trucks to the market, they won’t shut up.

Other stuff I find interesting

Some wonderful photos of my country taken by an award-winning photographer

US regulators will certify first small nuclear reactor design. I understand that there are concerns over safety and nuclear waste, but nuclear is perhaps the best tool at our disposal to generate clean energy at scale to accommodate the ever increasing demand. I wonder how and/or if this step would help increase the use of nuclear power

Who Is Collecting Data from Your Car? An eye-opening read on the vehicle data world

Tails, You Win. Now that I think about it. Love is just pure dumb luck. The person that you fall in love with happen to love you back. If you manage to fall in love and spend the rest of your life with the same person, creating happy moments and sharing wonderful children and grandchildren, that’s as taily as tails get.

Biden wants an industrial renaissance. He can’t do it without immigration reform. As an immigrant myself, I can tell you that if I had known what I do now, I would not have come to the US. The immigration process here is very talent-unfriendly. The country pours billions of investments into technology, yet the immigration system is antiquated and undoes all the good that such investments bring. To secure the future of the US, the government needs to massively and quickly reform its immigration

Hidden menace: Massive methane leaks speed up climate change. It’s horrifying to learn that we are pumping an incredible amount of this polluter into the air while knowing that it can speed up climate change significantly.

The U.S. made a breakthrough battery discovery — then gave the technology to China. I could hardly believe what I read. A promising battery technology took a dozen US scientists, 6 years and millions of taxpayers’ money to be developed. Then, the Department of Energy transferred the technology to a company based in China where it is currently further developed and produced

Stats

HALF of the nation’s clean power is generated by nuclear energy

Gen Z has led all generations in terms of 30-59 day credit card delinquency this year, according to Vantage Score

OnlyFans has 200 million registered users

Globally, only 9% of plastic waste is recycled while 22% is mismanaged

Weekly reading – 30th July 2022

What I wrote last week

Book review: Soul In The Game: The Art Of A Meaningful Life

I adopted the Mediterranean Diet

Take-aways from Netflix’s Q2 FY2022

Business

($) Bed Bath & Beyond Followed a Winning Playbook—and Lost. The urge to change strategy and sell private labels quickly while ignoring the required changes to the existing infrastructure hurt Bed Bath & Beyond. They didn’t have time to design, build and market their private label brands properly. And there is Covid, which makes the situation worse for the big box retailer. Its website is antiquated and doesn’t offer pick-up option for customers. The latest reminder that a strategy may be sound, but execution matters

How the Durbin Amendment sparked fintech innovation. In case you wonder how smaller banks compete and how fintech startups can offer rewards, even on debit cards. A good primer on the Durbin Amendment

($) Jack Ma Plans to Cede Control of Ant Group. It’s interesting to read how Jack Ma structures the ownership of his voting rights and shares at Ant Group. Essentially, two companies control a hair higher than 50% of Ant Group shares. Jack Ma controls the voting rights of such two companies while sharing the share pool equally with two executives from Ant Group. Jack already planned to step away completely from the company he founded for years, but delayed the decision so that the IPO could go smoothly. His debacle with the Chinese government took care of that. It’s, again, amazing what little an unfathomably rich and powerful guy like Jack can do to the Chinese government.

How Big Tech Runs Tech Projects and the Curious Absence of Scrum. A very interesting post on scrum and by extension, project as well as resource management. One common mistake that I often see, especially from people without experience with scrum before, is that scrum and agile is this magic bullet to increase productivity and efficiency. Like any tool, yes, it theoretically can, but it has to be used in the right way. As you can see in the post, it’s not for every company. Even at the right companies that need it, scrum and agile need to be implemented properly. I am personally going through the painful experience of seeing it implemented improperly at my company. Sure, it doesn’t cost companies any additional resources. What it does cost is employee morale and trust in the leadership

Dollar General eyes bigger presence in health care. Dollar General is associated with low prices and smaller store sizes. The fact that they add fresh produce and health care to their line-up makes a fascinating business case to follow up.

A thread on how a Web3 startup that received $365 million in investments has $6,500 in monthly revenue. Yeah that wasn’t a typo

Other stuff I find interesting

In Remote Alaska, Meal Planning Is Everything. The rugged nature of Alaska is strangely appealing to me. I somehow wish that I could spend some time living there

Stats

Venture funding in Chinese startups in Q2 2022 fell to $9.1 billion, a whopping decline from $32.1 billion in Q4 2021

It costs only 4 cents for a 1GB of mobile data in Israel, compared to $5.6 in the US

Online sales during Prime Day 2022 hit almost $12 billion

Source: Bank of America

Weekly reading – 23rd July 2022

What I wrote last week

Three things a company can to hire great new entry-level staff and integrate them successfully

Business Unlimited Ultimate+ For Iphone

Business

Consumer Trends 2022: Mid-Year Update. An interesting study on consumer behavior by Coefficient Capital. One thing that stood out as terrifying to me is that 39% of the surveyed folks sayed they’d vote for Donald Trump if he runs for President in 2024

($) 71 Cities and Towns Are Paying Tech Workers to Abandon Silicon Valley. It’s Working. Local economies need bodies, tax revenue, consumption and entrepreneurship. Without these incentive programs, smaller cities have little chance to stand out and be the next destination for highly skilled workers. I really hope that somebody will conduct a wide range study on how effective such programs are.

From $25 billion to $167 million: How a major crypto lender collapsed and dragged many investors down with it. You live by the hype, you die when it dies. A rude reckoning for crypto traders

($) CFPB to Push Banks to Cover More Payment-Services Scams. Up to now, banks only have to repay the money that customers lost in fraudulently induced transactions. If the report is true, banks will soon have to provide more protection for consumers, investigate more transactions and potentially have to repay the money lost in scams that were even authorized by the end users. I welcome the proposal. Fraud is the number one concern when it comes to real time payment. Zelle, to the industry insiders, is littered with frauds. Having the regulatory push from the CFPB will force major banks to take more actions to protect the end users. On the flip side, more oversight may curtail the investment and interest in real time payment from financial institutions. But I think it’s a risk worth taking.

Target puts the squeeze on suppliers after inventories pile up. Relying on major retailers boosts a supplier’s scale tremendously, but also means that an abrupt change can seriously hurt the supplier’s margin. Dealing with expensive excessive inventory, retail giants like Target or Walmart pressures their suppliers to hold what they previously committed to take on and eat the cost. These suppliers are likely to swallow this bitter pill since a lot of future business is on the line here

Lessons from Germany’s Midsize Giants. A great collection of great mid-size companies from Germany that have the same formula to success as Aldi. I believe you get more value from reading this article and studying these companies than from a lot of business strategy textbooks at school

Other stuff I find interesting

The 2022 13-Inch MacBook Air. John Gruber’s review is excellent, as usual. I have to admit that it nudges me towards buying one later this year

($) Afghan Economy Crumbles Since Taliban Takeover. The economy collapsed. Demand evaporated. Financial support from other countries was cut off. 90% of the citizens don’t eat sufficiently while half of the population face acute hunger. The Talibans do not know how to run the country. What a catastrophe!

($) MBS’s $500 Billion Desert Dream Just Keeps Getting Weirder. “MBS, as he’s known abroad, was in the early stages of one of the largest and most difficult construction projects in history, which involves turning an expanse of desert the size of Belgium into a high-tech city-region called Neom. Starting with a budget of $500 billion, MBS bills Neom as a showpiece that will transform Saudi Arabia’s economy and serve as a testbed for technologies that could revolutionize daily life.” As I read this article, I couldn’t help but feel sad. The amount of money and resources poured into this grandiose project fueled by the ambition, if not delusion, of one powerful man could have helped a lot of unfortunate people around the world.

Case Study 8: How Hertz Paid Accenture $32 Million for a Website That Never Went Live. It’s mind-blowing that Accenture couldn’t even deliver the responsive design and decent security features after receiving a lot of money from Hertz. I don’t know how complicated Hertz wanted their website and mobile application to be nor do I know how the office politics involved is. But based on the description of the requested elements, I have a feeling that a $2 million to a Vietnamese ads agency would get the job done.

U.S. Wind Energy Is (Finally) Venturing Offshore. “Capturing offshore wind in the U.S. has long been an uphill battle, with various stumbling blocks in the terrain. Objections from fisheries, skepticism from conservationists and tenuous support from tourism have all stalled development in the past decade. That is, until May of 2021, when the U.S. Department of the Interior approved construction of a sprawling wind facility several miles off the coast of Martha’s Vineyard, Massachusetts.”

Stats

In 2021, venture capitalists invested $14.8 billion into startups in Latin America. The nearly $15 billion was more than the previous six years of venture investment combined

Forests Now Cover 2% of Iceland, a 6-fold increase since the 1990s

Since 2012, the SEC has awarded $1.3 billion to 278 whistleblowers

63% of African American students in K-12 in San Francisco are chronically absent, compared to 46% Latinx, 20% White and 8.4% Asian

YouTube has 5,500 channels in the US with more than 1 million subscribers in 2021

Source: Sensor Tower

Weekly reading – 16th July 2022

Business

Don’t Read History for Lessons. It’s true that history is one of, if not, the best teachers that we can have. The problem is that it’s often context-dependent and we have to be careful when using history for lessons. This post explains why

($) Netflix Seeks to Renegotiate Deals to Show Ads Next to Popular Shows. “When Netflix wanted to offer customers the ability to download content, it had to renegotiate its licensing agreements with outside suppliers. The price tag for download rights was an additional 10% to 15% of the agreement, one studio executive said. In discussions with content providers, Netflix has declined to provide details on its advertising plans, including where it will place commercials, what content will be on the platform or what it will charge consumers for the service, studio executives said. Entertainment-industry attorney John Berlinski said if Netflix doesn’t have an explicit agreement allowing it to place ads in and around content, it could face risks in doing so. Since top talent and producers often get a share of profits from successful shows, they will be keenly interested in whether studios collect bigger paychecks from Netflix after amending their deals.”

VW creates new company and enters global battery business. This is another signal that electric vehicles will be the future. VW believes so and puts money where their mouth is with a €20 billion investment in a battery company. A strategic investment to control their fate as much as possible. Plus, the US already crossed the critical point of mass adoption a couple of weeks ago.

($) Big-Name Investors Pour Billions Into Clean Hydrogen Projects. “The newest wager is on a Nebraska startup trying to upend the burgeoning industry of clean hydrogen with a process that uses natural gas but traps carbon by producing an ingredient vital for everyday products like car tires.” Monolith is the name of the startup. On their website, they have a simple demonstration of the process. It looks super interesting and a real boost to our fight against climate change. I’d love to learn more about how they source the natural gas required for this process and how that’d affect the net outcome on our environment.

A really great episode on Rolex. I didn’t know that Rolex was managed by a non-profit organization. It’s also mind-blowing the length Rolex goes to protect their brand integrity and products.

How peak events like Prime Day helped Amazon navigate the pandemic. A look into how Amazon does forecasting. It is hard.

Lessons from History: The 1990s Semiconductor Cycle(s)

A wonderful talk by Howard Marks at Goldman Sachs

Other things I find interesting

In Sri Lanka, Organic Farming Went Catastrophically Wrong. An example of when an ill-conceived and poorly-thought-out policy led to an economic and social disaster

Lifestyles. Another banger post from Morgan Housel. “I have no idea how to find the perfect balance between internal and external benchmarks. But I know there’s a strong social pull toward external measures – chasing a path someone else set, whether you enjoy it or not. Social media makes it ten times more powerful. But I also know there’s a strong natural desire for internal measures – being independent, following your quirky habits, and doing what you want, when you want, with whom you want. That’s what people actually want. Last year I had dinner with a financial advisor who has a client that gets angry when hearing about portfolio returns or benchmarks. None of that matters to the client; All he cares about is whether he has enough money to keep traveling with his wife. That’s his sole benchmark. “Everyone else can stress out about outperforming each other,” he says. “I just like Europe.”

Stats

The US is the latest country to pass what’s become a critical EV tipping point: 5% of new car sales powered only by electricity.

June U.S. eGrocery sales total $7.2 billion

Prime members purchased more than 300 million items worldwide this year

Source: awealthofcommonsense

Weekly reading – 9th July 2022

Business

Payments “Revolution” — Visa drives a surge in digital transactions. A great interview with the CFO of Visa. In this episode, Vasant talked about how Visa makes money in general and the company’s position with regard to the supposed threats such as Open Banking, Buy Now Pay Later or Cryptocurrencies.

($) TikTok Turns On the Money Machine. “ByteDance’s hit video app is on track to triple revenue this year to $12 billion, threatening Facebook’s hold on social media. TikTok has an edge against Meta that Apple Inc. helped solidify. Last year, the Cupertino, Calif.-based company updated its iPhone operating system so that users have to opt in to let apps like Facebook track their activities as they used other software on their phones. Most users decided not to let Meta track them, a change Zuckerberg has blamed for financial troubles like those in February. TikTok, it turns out, isn’t relying so much on that kind of tracking data. Its artificial intelligence discerns a user’s likes or dislikes largely from activities on the platform, picking up on how long you watch, say, a cat video, a skateboarding clip or lip-synced dancing. TikTok’s algorithms can then match up users with not just content, but advertising too.”

($) Americans Have Had It With Inflation. Consumers are showing signs that spending is not as strong as some companies make it out to be. With damaging inflation showing no signs of abating, persistent supply chain issues and vulnerable consumer spending, the future looks bleak

($) The Secret Sauce That’s Made Slutty Vegan a $100 Million Chain. A fascinating story about a business founded by a fascinating 34-year-old woman.

How the man behind the Apple Store presided over a Spac catastrophe. Ron Johnson is richer and more famous than most of us, but one thing that we haven’t done is to lose millions of dollars in a business catastrophe in a short time. Past credentials are useful as signals, but they don’t guarantee the same success in the future. Just because someone is rich and famous doesn’t also mean that they have the right opinions or can do everything.

Online grocery shoppers spend more but less loyal. “The vast majority of the 45% of consumers who shop for groceries online are omnichannel shoppers. While their monthly average grocery spend is $594 compared with $388 for in-store-only shoppers, online shoppers spend their dollars across a greater number of retailers monthly, between 3.9 to 6.6 stores per month compared with 3.2 for in-store only, the customer data science firm said.”

($) Intel Bets 17 Billion Euros on a Tech Revival in Eastern German. Intel has made a lot of headlines lately with their planned investments. The key here is that everything is just a plan and full of promises. Nothing has actually come to fruition yet. Intel fell far behind their competitors in terms of technology. In the world of semiconductor, it’s very challenging to make up ground. And I wonder how Intel will pull that off while fulfilling their promises to build plants in Europe and Ohio. Or is that the case of, and I quote somebody in the article, “promises are cheap”?

Other stuff I find interesting

How football shirts chart the rise and fall of tech giants. Football is THE global sport. It’s no surprise to see companies craving for eyeballs spend millions of dollars to appear on teams’ shirts.

Layover or nonstop? UCLA Health research says unique pattern of connectivity lets highly creative people’s brains take road less traveled to their destination. About 15 years ago, somebody said something that stuck with me till this day: it’s all a big giant jigsaw. The more pieces you gather, the more likely you can complete the jigsaw. You just need to find the pieces, whether it’s through experience or reading. It really motivates me to read and improve myself constantly. When I read the article, it reminded of that lesson. In this case, highly creative people have the “pieces” required to take the less traveled path. Somehow, their upbringing, their personality and life experience give them the pieces they need to be who they are and think the way they do.

The local news crisis is deepening America’s divides. You can’t make great decisions without being informed. I don’t think national news outlets have the resources to cover everything in every local community. As more regional news outlets shut down, citizens don’t have enough information on their communities; which affect their votes and decisions. And if there is one thing everybody should know about politics in America in the last 10-15 years, it’s that voting matters at every level.

Japan’s shochu capital becomes new hot spot for whisky. “Traditionally known for its shochu, a clear liquor made from grains, potatoes, sugar cane and more, Japan’s southwestern region of Kyushu has become home to a budding whisky industry as craft distillers chase a larger, more global audience. Surrounded by vegetable fields and rice paddies, Shindo Distillery began producing whisky in the Fukuoka Prefecture city of Asakura in summer 2021. The facility belongs to Shinozaki, a storied barley shochu maker founded in 1922. Shinozaki is branching out “because demand for Japanese whisky is skyrocketing,” said Michiaki Shinozaki, who is part of the eighth generation of the founding family.”

Tips for Productivity, Thinking, and Doing. I wholeheartedly agree with this post, especially on the morning routine, the value of writing and the benefits of getting the most important thing done early.

What Is the Pesco Mediterranean Diet? I am actually following the Pesco Mediterranean Diet right now. It’s more about my love for sea food than trying to meet the daily protein intake. It also makes the transition to a plant-focused diet such as Mediterranean Diet easier. If you are looking for a diet that is great for your health, look this up.

Stats

India consumed 6 million tons of meat in 2020

40% of Google users use IPv6

In Zambia, only 10% of the adult population uses a debit card.

FedEx estimates savings of $400 million annually from retiring mainframes

Amazon Prime reportedly had 172 million members in the US as of June 2022

Weekly reading – 2nd July 2022

What I wrote last week

How does credit card direct mail process work?

Business

A great podcast episode on Don Valentine and Sequoia Capital. I guarantee that this is way better than Don Valentine’s profile on Wikipedia.

($) Spotify’s Billion-Dollar Bet on Podcasting Has Yet to Pay Off. “Over the next four years, Ostroff spent more than $1 billion on the business, licensing shows, buying production studios, and signing exclusive deals with celebrities, including the Obamas, Kim Kardashian, and Prince Harry and Meghan Markle. Last year, Ostroff’s research and data team asked a question that many at Spotify already knew the answer to: Had any of this spending yielded a major new hit? The team produced a report that basically said no, according to five current and former employees who didn’t want to be named discussing internal business.” A very interesting story on the development of podcasts at Spotify. They used to like Netflix making a lot of shows and movies without anything concrete in return. The new internal structure is now in place to help Spotify better at making shows. I think they may be better off by following the model of HBO and Apple. But as a company that is never actually profitable, Spotify doesn’t have the luxury that Apple or Warner Bros has.

($) The Surprising Reason Your Amazon Searches Are Returning More Confusing Results than Ever. “The problems Amazon took on once it opened up its marketplace to sellers in China have become more evident in recent years. My Wall Street Journal colleagues in 2019 uncovered thousands of banned, unsafe or mislabeled products in Amazon’s catalog, most of which came from China-based sellers. It also became apparent that Amazon sellers were gaming Amazon’s algorithms to get goods listed as high in its search results as possible, and even going so far as to bribe Amazon employees in China to help boost items’ rank. The Amazon spokeswoman says the company spent more than $900 million last year to combat counterfeiting, fraud and other abuse—an effort she says involved 12,000 people. The company stopped more than 2.5 million fraudulent attempts to create new seller accounts, she added, down from over six million the prior year.”

‘Wallets and eyeballs’: how eBay turned the internet into a marketplace. This article is actually an excerpt for an upcoming book calling for the de-privatization of the Internet. It basically calls for another version of the Internet where people would be less motivated to create their own content because capitalism and competition wouldn’t work. I haven’t read the book, so I don’t know how good it is, but it’s still cool to read up on the birth of one of the most important marketplaces we have ever had.

Lessons from an investing legend. Anyone interested in investing should have a read. Everything Peter says is similar to what I have read from some of the greatest investors

($) Inside Didi’s $60 Billion Crash That Changed China Tech Forever. It further solidifies my stance that as long as the current regime stands and it surely looks that way for years to come, I won’t buy Chinese stocks. Didi at its peak was worth $100 billion. Now it’s a shell of its former self because of actions from the government. Worse, the leaders at Didi, all Chinese and with resources to spare, didn’t understand why the government acted the way it did. Then, how could a foreign investor hundreds of miles away?

($) Draymond Green, Podcast Star, Turns an Unsparing Mic on Himself. I listened to Draymond’s podcast a few times and while it does carry a sense of disruption and fresh air, compared to the likes of First Take or Undisputed, I still want to hear more basketball analyses from Draymond. He is an intelligent player and a 4-time champion. He surely is capable of producing basketball breakdowns for casual fans like Kobe once did with Detail. I’d love to hear more about the preparation before games or during off-season. I’d love to hear about the mental struggle of players during injury rehabilitation. Dray has much to offer and I hope he will bring it instead of cat fights and trash talk against the incumbent media. On a side note, after the liquor industry, athletes are marching into the media space. With their fame, connections and insider knowledge, they are greatly positioned to make a splash in this industry.

Other stuff I find interesting

Nigerians are learning to buy now and pay later. “In a country where only 2% of the 106 million adult population have access to bank credit, credit cards are also conspicuously absent, as banks shy away from consumer lending. BNPL is becoming a rising alternative and is set for further growth, as Nigerians embrace digital credit. BNPL thrives in markets with integrated identity systems, consumer credit culture, and decent consumerism, where people are able to pay for not just essential items like food and fuel but are also willing to buy nonessential items like cars and gadgets. However, the Nigerian market struggles with efficient identity systems, over 100 million Nigerians, or a little less than half the population do not have any form of recognized ID. And following the economic slump over the last eight years, many households are barely clinging to whatever funds they have after spending on rent, food, and other necessities. A June 2021 report showed 61% of the country’s adult population suffered “severe financial distress” over the previous 12 months, forcing many to cut down on expenses.”

($) Norway Was a Pandemic Success. Then It Spent Two Years Studying Its Failures. “Norway’s government had the foresight during the first days of Covid-19 to appoint a panel called the Koronakommisjonen. Its mission was figuring out what the Norwegians did, what they could have done and what they should do. This crisis was barely under way when they began preparing for the next one. The next lesson from the Koronakommisjonen reports is the power of not pretending to know more than you do. Nobody really knew anything early in the pandemic. Anybody claiming otherwise should have known better.”

Mediterranean Diet Reduces Depression In Young Men, Study Says. One of the things I want to try till the end of the year is to try Mediterranean diet

Behind the scenes of Waymo’s worst automated truck crash. I have always believed that we are still a long way from having automated vehicles on the streets. Nothing has made me changed that belief, not even a little bit.

Stats

“Ground beef prices are up 36% from a year ago, while chicken breasts gained by a third”

Klarna is reportedly valued at $6.5 billion, down from $45 billion in 2021. Talk about a new definition of a down round

Source: Self.inc

Weekly reading 25th June 2022

What I wrote last week

Books on Payments

Supreme Court overturned Roe v Wade and took away abortion rights

Business

Inside the Reinvention of Albertsons Cos. The over-arching theme of Albertsons’ plan moving forward is to use technology and data to make decisions so that efficiency can improve and so does customer engagement. Grocery is a hard business. Margin is low and competition is fierce. Albertsons said their goal was to have shoppers complete grocery shopping at their stores without visiting rivals’ footprint while offering local assortments. It means that the selection has to be broad, but the stores at the same time cannot expand in size forever. They also need to keep a close eye on costs and margin as well. That would require a lot of data analytics, coordination in the case of omni-channel shopping and great execution.

($) Retailers’ Inventories Pile Up as Lead Times Grow. On top of the ever-changing consumer behavior and sky-high inflation, retailers now have to deal with long lead times in production which make it even more difficult to match demand with supply while keeping costs in check. Hold a lot of the wrong inventory to avoid supply chain and production issues, and you will be punished like Walmart or Target. Be nimble with inventory and you don’t have well-stocked shelves to woo customers. Hard times ahead.

Consumer watchdog eyes crackdown on credit card late fees as inflation threatens to increase them. If CFPB introduces regulations on late fees, it will affect how issuers generate revenue from credit cards. Late fee is a significant source of revenue by itself, but it also encourages consumers to pay off balance to avoid further penalty. If late fees are further capped or even outright banned, such an incentive will go away and consumers may carry more balance. It will increase risks and reduce revenue for issuers. It’ll be interesting to see how this develops.

($) Canada to Compel YouTube, TikTok and Streamers to Boost Domestic Content. I am generally supportive of having the right kind of regulations in place to help businesses. Hence, I would be in favor of the Canadian government giving these streamers incentives to promote Canadian creators’ work. I am not; however, ok with a government mandating a preference of local content.

($) GM and Ford, Driving to Beat Tesla, Turn on Each Other. An interesting read on how two iconic American car manufacturers are going at each other for market shares in the EV area.

($) How Singapore Got Its Manufacturing Mojo Back. “In courting factories like this, Singapore has become a rare wealthy country to reverse its manufacturing downturn. The city-state had faced industrial decline, with World Bank figures showing manufacturing falling to 18% of gross domestic product in 2013, from 27% in 2005. Then manufacturing made a comeback in Singapore, rising to 21% of GDP in 2020, according to the World Bank’s latest figures. Singapore has aggressively wooed highly automated factories with tax breaks, research partnerships, subsidized worker training and grants to local manufacturers to upgrade operations to better support multinational companies, among other enticements. There’s a caveat: Singapore’s success has come by automating away many jobs. It has more factory robots per employee than any country other than South Korea. Business executives say Singapore has succeeded because it has a welcoming, low-tax government and a strong base of English-speaking science, engineering and mathematics graduates and manufacturing managers. Relatively loose immigration laws make it easy to hire foreign engineers.  Executives also say they trust intellectual-property protection laws in Singapore, unlike in places like China where they sometimes worry their partners will copy their products.”

Source: Twitter

Other stuff I find interesting

Japan to subsidize TSMC’s Kumamoto plant by up to $3.5bn. Semiconductor companies get handsome subsidies from governments from all over the world. Japan will give TSMC $3.5 billion while Europe hands Intel billions of euros to build a plant there. That goes to show how countries value the strategic importance of semiconductor going forward

Why America Will Lose Semiconductors. A good run-down of problems that America faces in semiconductor. It’s a nice complementary read to the previous link

Friendly fungi help forests fight climate change. “A 2016 study led by researchers from Imperial College London revealed that one particular type – ectomycorrhizal fungi – enables certain trees to absorb CO2 faster (and therefore grow faster) than others. This is known as the “CO2 fertilisation effect”. These fungi live in the root system of a host tree. In a symbiotic relationship, fungi help the tree to absorb more water, carbon and other nutrients. In exchange, the tree provides food for the fungi by photosynthesising. Ectomycorrhizal fungi have also been found to slow down the process of rotting; decomposition breaks down all that locked-away carbon and releases it into the atmosphere. So the fungi, in effect, have two methods of fighting global warming.”

The most dangerous place on Earth. “Nestled on Lithuania’s southeastern border, Druskininkai opens onto a narrow notch of strategic territory known as the Suwałki Gap. Stretching about 100 kilometers along the Lithuanian-Polish frontier, between Belarus in the east and the Russian exclave of Kaliningrad to the west, Western military planners warn the area would likely be one of the Russian president’s first targets were he ever to choose to escalate the war in Ukraine into a kinetic confrontation with NATO.”

($) Erdogan Is Hung Up on the Power One Kurdish Woman Has in Sweden. “Amineh Kakabaveh’s journey from Peshmerga fighter to Kurdish refugee and then Swedish lawmaker has thrust her into her adopted homeland’s standoff with Turkey. Turkish President Recep Tayyip Erdogan is holding up Sweden’s application to join the NATO alliance, saying it harbors “terrorists” — his catch-all label for those with links to Kurdish militancy — and he’s hinted at Kakabaveh’s influence as a particular problem.”. Just an amazing story by Amineh

Stats

Edmunds reported that the average price of an EV exceeded $60,000

Since November 2021, more than $2 trillion in cryptocurrency value has evaporated

Covid vaccines saved 20 million lives in the first year

TikTok had $4 billion in revenue in 2021. Its US-based users spent on average 29 hours on the platform, compared to 16 hours on Facebook and 8 on Instagram

Source: IMF

Weekly reading 18th June 2022

What I wrote last week

Interchange and what influences it

Apple and Major League Soccer

Business

($) What Do Chinese Consumers Want? Walmart Can’t Figure It Out. Almost 30 years in the country and decades of experience in this industry, Walmart seems to lose grip in China. The stores aren’t an appeal that they once were. Walmart doesn’t seem to be able to offer what consumers want. Competitors are fierce. For good measure, the tension between America and China shows no signs of abating. Trouble is awaiting the largest retailer in the world in China.

Elon Musk’s regulatory woes mount as U.S. moves closer to recalling Tesla’s self-driving software. I admire Tesla, Musk and everything they have achieved. But I think it’s dangerous to create marketing materials touting full self-driving abilities when the vehicles are nowhere near that capabilities.

($) FanDuel CEO Amy Howe Wants to Help the Sports-Betting Business Grow Up. An interesting read into the market leader of sports betting. TIL, FanDuel had 70% of all sports betting platforms’ revenue generated in the state of Michigan in 2022 through April. Typically, it’s only about 5% of the amount wagered.

Maybe Bob Chapek Was Right. The tumult at Disney continues with the recent departure of Rice, a senior executive. Outsiders may not know the full story of what went down. Perhaps, Bob Chapek was right. Perhaps, it was just another example of how difficult life at the top is for him. Nonetheless, it really doesn’t matter how fair or unfair the criticisms on him are. The fact is that he is the CEO and the stock went down by almost 50%. Right or wrong, it’s on him and his record. I look forward to seeing whether they will adjust their subscriber target in the long run now that they no longer have the rights to the cricket league in India. Some said that Disney might lose 20 million subscribers in India. Others argue that it’s a blessing in disguise as a subscriber pays like 70 cents over there. Hence, losing a bunch of low-paying subscribers may boost ARPU and profitability, a premium in this market. The market’s reaction to a new target, if any, may influence Chapek’s tenure a lot.

($) Amazon CEO Andy Jassy’s First Year on the Job: Undoing Bezos-Led Overexpansion. A fascinating piece on Amazon that is unquestionably favorable to Andy Jassy and much less so to Jeff Bezos. I find it interesting that Amazon seems to shift the blame from Jassy onto Bezos for recent trouble with excessive fulfillment capacity. The founder and former CEO did make the decision to expand the capacity, but this sort of public admission while he is still the Executive Chairman definitely raised eyebrows.

($) One Grocer Wanted to Give Up Plastic. It Got Rotting Bananas. “When one of the best-known supermarket chains in the U.K. decided to remove plastic from its products, it hadn’t anticipated a spike in shoplifting. The zero-plastic drive also produced a series of unintended consequences that demonstrate how difficult it is for any company to shed plastic packaging entirely. When Iceland wrapped bananas in paper bands instead of plastic bags, the fruit rotted more quickly or snapped off. When it packed bread in opaque paper bags, sales fell as shoppers balked at buying something they couldn’t see. When it punched holes in paper bags filled with potatoes to make the contents more visible, the bags ripped. Bacon that isn’t wrapped in plastic quickly discolors, salad leaves wilt and unwrapped cucumbers rot more quickly.

Other stuff I find interesting

($) Biden Administration to Pursue Rule Requiring Less Nicotine in U.S. Cigarettes. FDA estimates that tobacco use costs the country $300 billion in direct healthcare expenses and lost productivity. A study published on the New England Journal of Medicine estimates that lower nicotine level will lead to 5 million additional adult smokers to quit smoking. If mandating a lower nicotine level in cigarettes results in fewer smokers and lower economic damages, FDA should press ahead and exercise their authority, knowing that the tobacco industry will take legal actions to protect their own interests

Downtown S.F. on the brink: It’s worse than it looks. The article goes into why remote work drives folks away from San Francisco and the downstream effects that such a migration can have on the city. I spent a few days in San Francisco last month. At no time did I ever feel safe due to the homeless folks on the streets. My team and I went around a bit by Uber and agreed that some areas were just too sketchy to live. Drivers there were just unbelievable. We had to report one Lyft driver because he literally scared us to death with his reckless driving. The living expense is so high there. One croissant and a small cup of coffee cost me $12, easily double what I’d pay in Omaha. It’s no wonder that white-collar workers moved away whenever they had a chance. When the engine that generates your city’s economy is leaving, it’s a serious challenge that demands different thinking.

Exclusive: inside Apple’s iOS 16 remake of the iPhone’s iconic Lock Screen. One thing you’ll notice from this piece is that the road to this Lock Screen feature started a while ago with work on its neural engine, chip and personalization effort on the Home Screen in iOS14. That’s typical of Apple. Have a product roadmap, put the pieces together and release only the things that work.

Opening a Restaurant in Boston Takes 92 Steps, 22 Forms, 17 Office Visits, and $5,554 in 12 Fees. Why? “The American Dream is besaddled by byzantine regulations. As the report shows, for example, opening a restaurant in Boston is a 92-step process. In Detroit, it’s 77 steps. In Atlanta, it’s 76. The report goes into great detail. That 92-step process to open a restaurant in Boston requires that 22 forms be completed, 17 in-person visits be made to government offices, 12 fees be paid, and nine government agencies be involved, at a total cost in government fees of $5,554. Opening a restaurant in San Francisco requires that 17 government fees be paid at a total cost of $22,648.” Indeed, why?

Stats

There were 31 million cigarette smokers in the US in 2020

1.5 billion users watch YouTube’s TikTok clone every month

14% of the U.S. population lives within rural communities

Weekly reading – 11th June 2022

What I wrote last week

Apple Pay Later

Business

Macy’s, Gap and Other Clothing Stores Are Stuck With the Wrong Items. An interesting report on how retailers got forecasting and inventory badly wrong. Macy’s, Walmart, Gap, Kohl’s, just to name a few, have a lot of inventory that they can’t sell at the moment or at least can’t sell fast enough. Remember that the executives at such companies are experienced and paid handsomely to nail down forecast. The fact that their calculations are so far off shows how unpredictable consumer behavior changes in this environment

Grocery’s Greatest Stories. Progressive Grocer has an interesting multi-part series on the history of grocers in the U.S, ranging from the start of Albersons or Walmart to the acquisition of Whole Foods by Amazon.

Axon Ditches Plans for Weaponized Taser Drones as Majority of Ethics Board Resigns. It’s a dangerous, revenue-driven and badly-conceived idea to develop drones to address mass-shootings. What are they trying to achieve with this kind of products? Who would fly these drones and could those drones even navigate through schools’ hallways? If a shooter knows about the drones, comes to a school, shoots people and leaves quickly before anyone could even fire up those expensive toys, what good would it be? More importantly, what if these drones fell into the wrong hands? I am happy that folks on Axon’s Ethics Board stood up for what they believed in and resigned in protest. As a shareholder of Axon, I am disappointed.

Charlie Munger: Full Transcript of Daily Journal’s 2022 Annual Meeting. It’s mind-blowing that Charlie Munger can be this clear in his thinking at 98. I am such a strong admirer of him.

Ferrari boss Mattia Binotto explains five-year journey back to top end of F1. It’s down to the people and the “no blame” culture, not the machinery. This issue is about the painful recovery of Ferrari. As the most famous and successful team in F1, Ferrari has disappointingly failed to win a title since 2008. 2020 was the worst year on record. The car was as slow as a tractor. However, Ferrari has bounced back amid the largest rule changes in the last few years. The Prancing Horse won the most poles this year, bagged two wins and are the two top teams of the paddock along with Red Bull.

How Two Africans Overcame Bias To Build A Startup Worth Billions. A sneak peek into the fintech startup scene in Africa. Much as I admire the two men on the cover, I was abhorred by the fact that a VC firm wanted a discount because Chipper Cash is from Africa.

Engineer Who Fled Charges of Stealing Chip Technology in US Now Thrives in China. Semiconductor is so important that whatever country “owns” it will have outsized influence in the world. China wants global domination and definitely doesn’t want to be beholden to any country for chips. Yet, semiconductor is the one area that it still lags behind other advanced nations. Hence, it resorts to theft of intellectual property to close the gap. It deserves every condemnation there is.

Behind Apple’s Megadeal for Brad Pitt Formula One Racing Film From Joseph Kosinski. “The key to the deal is a theatrical distribution component. But instead of a token release in a small number of theaters or a day-and-date opening, the movie would have an exclusive — and global — run of at least 30 days (one source says it could even go as high as 60 days) before heading to the Apple TV+ platform. In another first, insiders say the theatrical component is structured in a way that would see Apple and the filmmakers split the take from the big-screen release 50-50. The unique deal, in essence, pays the creative team three ways: their upfront fees, their hefty buyout fees and the theatrical backend.”

Other stuff I find interesting

Cao Bang – a green pearl in northeastern mountains. Imposing, magnificent and beautiful Cao Bang in Vietnam

How to buy a chicken sandwich in Shenzhen. Fascinating read on the livestream e-commerce space in China. Total Addressable Market is estimated at $100 billion. In 2021, there were 461 million people who shopped on livestream in China.

The New LaGuardia Is Haunted by the Mistakes of its Past. An interesting read on the redesign of LaGuardia airport. I was there a few months ago and I had to say that I was surprised to see the modernity of the airport. I still held onto this notion that LaGuardia was this old place in a decaying condition. Landing in the new Terminal B from Omaha was an eye-opener. Hence, it’s great to read the context on why the airport went through such a transformation

Adult Children of Work-Visa Recipients Forced to Return to Parents’ Countries. It’s just terribly sad to read that children of Dreamers have to voluntarily leave the US because they cannot get a valid status. It is NOT their fault at all. The only thing that is wrong for them is to spend most of their lives in a country with a broken immigration system. Look at the biggest companies in the US and in the world. From which country are their CEOs? India! Then, how come do we need to make them wait for years and years to get a Green Card? It’s insanely infuriating.

The epic story behind the Ferrari and Lamborghini rivalry. A great story and reminder that you should not piss off your customers

Stats

Average Order Value at the top-performing quartile grocers is 46% higher than that of the other stores

Walmart is building 4 next-generation fulfillment centers in the next 3 years that can provide next-or-two-day shipping to 75% of the US population

Nearly 20 million people watched the Jan 6. hearing

Pokemon Go surpassed $6 billion in lifetime player spending

Food-at-home prices in May up 11.9% from a year ago