Weekly readings – 23rd May 2020

The ingredients of a long life. Drinking coffee/tea every day, eating in moderation are nurturing the spiritual life are common in areas where people tend to have a long life

How Facebook Could Use Giphy to Collect Your Data

How Etsy Became America’s Unlikeliest Breadbasket

Inside Trump’s coronavirus meltdown

Politico’s profile of Facebook’s new Head of Policy and Communications

How GrubHub ripped off restaurants even though customers intended not to use it

A Spectacularly Bad Washington Post Story on Apple and Google’s Exposure Notification Project

Doordash and Pizza Arbitrage

Why is New Zealand so progressive?

The hidden toll of lockdown on rainforests

Microsoft announced a new competitor to Airtable

Two monetary systems in Yemen

Source: Grab

DON’T CONSUME HYDROXYCHROLOQUINE! A new study published on the renowned The Lancet proved that the drug and some other similar had harmful effects on health

The healing power of proper breathing

The story of cheaper batteries, from smartphones to Teslas

‘How Could the CDC Make That Mistake?’. CDC and some states inflated the number of tests to drum up the testing abilities and make it impossible to know the exact infection rate.

We should make some much needed amendments to the Constitution

On this Friday night, I did something that I hadn’t done before, but I should have: read the Constitution itself. The document is often referenced in politics and in our life. It is one of the Founding documents upon which this country is built. After almost 250 years, I think it needs some much needed amendments sooner rather than later.

Take Congress. As far as I know, there is no term limit to congressmen or congresswomen or Senators in Congress. We see many folks who serve multiple terms and are still in office despite being of age. There is undoubtedly the benefit of wisdom that comes with age, but there is also a risk that elder folks do not catch up with the technological and societal advances in our life. If you watch hearings on technological issues that took place in the past, you can see how much our lawmakers don’t understand technology. There is a minimum age at which one can apply to be in Congress. So why isn’t there an upper limit on age?

Another issue I can think of is the Electoral College. Electoral College favorably gives power to Midwestern States, which are much less populated than coastal states. In 2016, Hilary Clinton won the popular vote, but lost the election due to the Electoral College, something that happened 5 times in the past. In my opinion, a democracy should follow what the majority say. Hence, that’s something we should change. Getting ride of the Electoral College doesn’t strip anyone of their vote. Each individual vote would become equally important. As of now, that statement cannot be said about the Electoral College.

The same vein can be applied to the Senate. Each state sends two Senators to the Senate. As in the case of the Electoral College, the rule doesn’t take into account the population size of each state. Consequently, senators from less populated states have the same power as senators from usually coastal states. When it comes to votes, senators represent folks from their state. Put it this way, let’s say every vote from a senator is worth a million points. One state’s two votes are worth two million votes at a time. If California has 40 million people in population, each Californian’s representation is 0.05 points. If Wyoming has 500,000 in population, the representation of each citizen of Wyoming in the Senate is worth 4 points. So, isn’t it against the tenet of democracy that the two states’ voices carry the same weight?

Another amendment that should be added relates to the 2nd amendment or the right to bear arms. First of all, I do agree that the freedom and right to bear arm should be given to citizens. What I think should be clarified in the writing of the Constitution is that such a right should be in accordance with regulating rules. We are entitled to drive a car to the streets, but we all have to get licensed to do so. Then, why is it different for bearing arms? And since so many folks get hung up on the language of the 2nd amendment, the best way for this country to move forward on this issue is to give more clarification to the amendment.

Lastly, the impeachment. The Constitution says that a President can be impeached for “High Crimes or Misdemeanors”, but it fails to clarify what High Crimes or Misdemeanors actually means. When there is ambiguity in the language, there is a change that it will be misused and taken advantage of by folks with motive. To avoid the situation, we should clarify as much as possible what the terms mean. The Office of The President is extremely powerful. Because of the power it wields, we should be as precise as possible in how we can hold Presidents accountable. I don’t think we take into account all scenarios in one update of the Constitution. What we instead can do is to keep it a living document, updating it frequently.

Cues on changes in consumer behavior during Covid-19 crisis from Walmart’s latest earnings report

One way to keep a pulse on consumer behavior during the crisis is to listen to companies that play a big part in consumer lives in the US. Take Walmart as an example. The firm is a household name in this country and can be found in most of its counties. This is what it commented on how consumer behaved during the crisis. It shed some light on the changes in preferred categories as the crisis went on

After supporting our associates, our next priority is serving customers. In the U.S. the first quarter started out as expected. And as the pandemic spread, we saw the mix of sales ship heavily towards food and consumables, as we’d previously experienced in China. This was the first stock update that we all saw so vividly. We experienced unprecedented demand in categories like paper goods, surface cleaners and grocery staples. For many of these items we were selling in two or three hours what we normally sell in two or three days. As the quarter progressed, we saw a second phase related to entertaining and educating at home, puzzles and video games took off. Parents became teachers. Adult bicycles started selling out as parents started to join the kids. An overlapping trend then started emerging related to DIY and home related activities. Think games, home office, exercise equipment and alike. It was also clear a lot of people were taking a do-it-yourself approach as they bought items like bandanas and sewing machines to make masks. We can see customers looking to improve their indoor and outdoor living spaces, our home categories in stores and online took off.

Towards the end of the quarter another phase emerged, COVID relief spending as it was heavily influenced by stimulus dollars leading to sales increases in categories such as apparel, televisions, video games, sporting goods and toys. Discretionary categories really popped towards the end of the quarter.

Source: Walmart’s Earnings Call Transcript
Source: Walmart
Source: Walmart

The intensified fear of the virus and the stay-at-home orders also changed shoppers’ behavior

ECommerce sales remained strong throughout the quarter while store traffic was quite variable due to the various stay in place orders and social distancing around the country. February sales were stronger than expected with comp sales of 3.8%. As the health crisis intensified in mid-March, we saw a surge in stock-up trips with March comps increasing about 15%. Store pickup and delivery spiked in March and remained elevated in April with sales growth of nearly 300% at peak.

Store sales slowed during the first half of April due to soft Easter seasonal sale and additional social distancing measures. In mid-April, sales reaccelerated across the business as government stimulus money reached consumers with general merchandise sales particularly strong. April comp sales increased 9.5%.

During the quarter, we saw customers consolidate shopping trips and purchase larger baskets in stores, which drove a ticket increase of about 16% while transactions decreased about 6%. With the shift in purchasing behavior, eCommerce sales contributed approximately 390 basis points to segment comp. Pickup and delivery services continue to run historically high volumes. 

Source: Walmart’s Earnings Call Transcript

Consumer preferences in a particular category such as food also changed due to societal impact of the virus

We have seen some inflation in categories like milk, eggs and dairy later in the quarter, and that seems to have subsided somewhat. And then protein inflation has picked up over the last few weeks, as plants have been inoperable in certain parts of the country. And as those have gotten back to limited operating capacities, we will continue to moderate that.

Source: Walmart’s Earnings Call Transcript

It’s quite interesting that more folks 50 years and older shopped online during the crisis than before

we have seen an increase in not only new buyers, but also repeat rates across the board, both for pickup delivery from the store and delivery out of the FC (Fulfillment Centers).

we have seen higher growth rates, most customers who are 50 years of age or older than what we had seen in previous quarters. Other than that it’s been across the Board, the repeat rates have been higher

Source: Walmart’s Earnings Call Transcript

The value of increased switching costs via a membership

Another interesting point is how memberships play a role in consumer behavior. As we know, everyone can shop at Walmart, but only paid members can at Sam’s Club.

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Comparable sales refers to the comparison of sales at the same stores during the same period compared to sales last year. It’s important to exclude fuel due to fluctuating fuel prices.

As you can see, comp in-store transactions at Walmart, which is almost limitlessly accessible, went down because of the stay-in-home order, social distancing and other options including but not limited to Whole Foods, Target. However, comp average ticket at Walmart went up due to consumers stocking up and panic purchase.

On the other hand, at Sam’s Club, where access is more limited due to mandatory paid memberships, both in-store trans and average ticket increased. Average ticket rose by only 0.1%; which I guess is due to the fact that shoppers did more trips to the stores and didn’t buy in bulk as much as Walmart’s clientele. Shoppers shopped more because they already bought the paid memberships which increased what we call in business terms as “switching costs”. What happened this last quarter with Sam’s Club is what executives hope to achieve when launching a rewards program: increased stickiness.

Book review: The Kill Chain: How Emerging Technologies Threaten America’s Military Dominance

I picked up this book after reading about it briefly on one of the news outlets. At first, I had a suspicion that it was a partisan book as everything was politicized nowadays in the US, but I still decided to give it a try. I am sure glad I did. The book was written by a senior advisor to John McCain, the former GOP chair of the Senate Armed Services Committee. The author’s tone and viewpoint throughout the book, in my opinion, were fair and made sense. He talked briefly about what he considered mistakes by both President Obama and Trump, in their failure to modernize the military and foreign relations policies. He tackled several aspects of the changing landscape that makes the US’s once insurmountable dominance on the verge of being completely eliminated, especially by China. He painstakingly explained why Russia and particularly China would present a peer and a threat that the US has never had before.

He used his insider knowledge and experience working under McCain to explain why even though the US spends billions of dollars a year on military and defense, it’s more about “how you spend money” than “how much money you spend”. A great deal of money is wasted every year by the bureaucracy, the corruption and the self-serving parties involved in the national defense business. While new technologies are already here, the US still plows an incredible amount of money into equipment, technologies and processes that belong to the past. Overall, this book is a wake-up call on how the US’s military is being left behind by arch rivals. It’s an informative read by someone who knew what he was talking about.

Threat from Russia and China with their technological advances

“As it stood, the Chinese Communist Party knew far more about the US military and its vulnerabilities than the American people and their elected representatives did.”

Excerpt From: Christian Brose. “The Kill Chain.” Apple Books.

“That assessment was echoed by a bipartisan commission of military experts that McCain had established through legislation that year to provide an independent examination of US defense strategy. They rendered their judgment to Congress shortly after McCain’s death in 2018. “America’s military superiority… has eroded to a dangerous degree,” they wrote. “The U.S. military could suffer unacceptably high casualties and loss of major capital assets in its next conflict. It might struggle to win, or perhaps lose, a war against China or Russia.”

Excerpt From: Christian Brose. “The Kill Chain.” Apple Books.

“One story from a Ukrainian officer stuck with me. His fellow commander was known to the Little Green Men as a highly effective fighter. One day during the conflict, the man’s mother received a call from someone claiming to be the Ukrainian authorities, who informed her that her son had been badly wounded in action in eastern Ukraine. She immediately did what any mother would do: she called her son’s mobile phone. Little did she know that the call she had received was from Russian operatives who had gotten a hold of her son’s cell phone number but knew that he rarely used the phone for operational security reasons. This Ukrainian commander, being a good son, quickly called his mother back, which enabled the Little Green Men to geolocate his position. Seconds later, while still on the phone, he was killed in a barrage of precision rocket artillery.”

Excerpt From: Christian Brose. “The Kill Chain.” Apple Books.

“Cyberattacks would grind down the logistical movement of US forces into combat. The defenseless cargo ships and aircraft that would ferry much of that force across the Pacific would be attacked every step of the way. Satellites on which US forces depend for intelligence, communications, and global positioning would be blinded by lasers, shut down by high-energy jammers, or shot out of orbit altogether by antisatellite missiles. The command and control networks that manage the flow of critical information to US forces in combat would be broken apart and shattered by electronic attacks, cyberattacks, and missiles. Many US forces would be rendered deaf, dumb, and blind.”

Excerpt From: Christian Brose. “The Kill Chain.” Apple Books.

How outdated US’s military is

“And yet, when members of our military put on their uniforms and report for duty, hardly any of this technology is available to them. Instead, they consistently have to do dangerous and important jobs with technology that might be many years behind what they use in their daily lives. This was reinforced again for me at a major Air Force conference last year, where I spoke on a panel about how new technology could help build better networks of military systems. An airman in the audience asked the panel how this would be possible when most servicemembers currently deal regularly with long network outages that leave them disconnected from email and the internet. Nearly everyone in the audience, more than one thousand people, erupted in applause.

Excerpt From: Christian Brose. “The Kill Chain.” Apple Books.

“It is a story of how the worlds of national defense and high technology in America increasingly grew apart. At a deeper level, it is also a story of how the United States was spoiled by its own dominance—a cautionary tale of how a prolonged period without real geopolitical competition bred a false sense of invincibility. In short, it is a story of how the United States got ambushed by the future.”

Excerpt From: Christian Brose. “The Kill Chain.” Apple Books.

“The bigger issue is that most of these allegedly information age military systems struggle to share information and communicate directly with one another to a degree that would shock most Americans. For example, the F-22 and F-35A fighter jets cannot directly share basic airborne positioning and targeting data despite the fact that they are both Air Force programs and built by the same company. They were architected with different means of processing and transmitting information that are not compatible. It is as if one speaks Greek, and the other speaks Latin.”

Excerpt From: Christian Brose. “The Kill Chain.” Apple Books.

“Unlike some leading American technology companies, Nvidia is open to doing business with the Department of Defense. I asked how many of its graphics processing units were operating on fielded US military systems. I was not surprised by the answer: none.

As the answer suggests, most US military systems are many years behind the state-of-the-art technology that commercial companies such as Nvidia are developing. The most capable computer onboard a US military system is the core processor in the F-35 Joint Strike Fighter, which has earned it the nickname “the flying supercomputer.” The processor can perform 400 billion operations per second.1 By comparison, the Nvidia DRIVE AGX Pegasus can conduct 320 trillion operations per second right onboard a commercial car or truck.2 That is eight hundred times more processing power.”

Excerpt From: Christian Brose. “The Kill Chain.” Apple Books.

“The information that most US military machines collect is not actually processed onboard the machine itself. It is either stored on the system and then processed hours or even days later when the machine returns from its mission. Or it is streamed back to an operations center in real time, terabyte by terabyte, which places a huge burden on military communications networks. Either way, it is the job of humans, not machines, to comb through most of that data and find the relevant bits of information. In 2020, that is the full-time job of literally tens of thousands of members of the US military. When they are off-duty, they may use Nvidia’s technology to play video games or even assist them on their drive home. But in uniform, they are essentially doing the same jobs that their grandparents did in World War II.”

Excerpt From: Christian Brose. “The Kill Chain.” Apple Books.

“A friend of mine who recently did targeting in the US military told me that the best way his unit could get on one page in identifying a target was with Google Maps. They had to gather up all of their different streams of information about the target from their assorted sensor platforms, come to a time-consuming decision on where the target actually was located, and literally drop a pin in Google Maps to direct their shooters where on earth to fire their weapons. This was around the time that the Google employees wrote their open letter to their leadership demanding that the company cut ties with the Department of Defense lest their technology contribute to lethal military operations. “If those folks only knew how many bombs the US military has dropped using Google Maps,” my friend told me, “their heads would explode.”

Excerpt From: Christian Brose. “The Kill Chain.” Apple Books.

How a great deal of money is wasted every year on military spending and how much bureaucracy there is in Washington

“Over the past two decades, during the peaks of the wars in Iraq and Afghanistan, multiple new weapons programs were started and ultimately canceled with nothing to show for them. The Center for Strategic and International Studies stopped counting the different programs at eighteen, acknowledging that the real number is far higher. All told, the Pentagon and Congress spent more than $59 billion on these programs during the 2000s and got no usable capability by the time the programs were canceled.”

Excerpt From: Christian Brose. “The Kill Chain.” Apple Books.

Many companies resented making these changes, which they felt forced into. But change they did, and they often used their influence in Washington’s byzantine acquisition system to their own advantage: They underbid on contracts to develop technology and then overran on the actual costs and time to produce it. They promised things they could not deliver. And they used their political clout in the Pentagon and Congress to make it harder for new companies and new technologies to displace their programs of record. Put simply, the US government created incentives for defense companies to do the wrong things, and that is often what happened.”

Excerpt From: Christian Brose. “The Kill Chain.” Apple Books.

“That simply does not happen with US military systems, where hardware has always been king and software largely an afterthought. For most military systems, the schedule for hardware updates determines the schedule for software updates. After all, most of the companies building these systems are hardware companies, not software companies. This has created multiyear software development cycles that are doomed to failure. Think of how well your mobile device would work if its software and apps were updated only every several years. That’s how it is for military systems. I cannot tell you the number of defense programs I came across during my time in the Senate—on which the US government had spent billions of dollars over many years—that were failing for the simple reason that their builders were not proficient in how to develop suitable, scalable, adaptable, and constantly improving software. And the result, time and time again, is that members of the US military are handed equipment whose functionality is inferior to what they use in their everyday lives.”

Excerpt From: Christian Brose. “The Kill Chain.” Apple Books.

“A good example of how defense acquisition can go wrong is the Army’s attempt to buy a new pistol a few years ago. It issued a request for proposals that ran over 350 pages of cumbersome details and envisioned years of costly development and testing before soldiers would ever get a new sidearm. Even Army leaders were surprised. They learned about it when McCain and I told them, and then they were as outraged as we were. “We’re not figuring out the next lunar landing,” said an outraged General Mark Milley at the time, when he was chief of staff of the Army. “This is a pistol. Two years to test? At $17 million?” he vented. “You give me $17 million on a credit card, and I’ll call Cabela’s tonight, and I’ll outfit every soldier, sailor, airman, and Marine with a pistol for $17 million. And I’ll get a discount on a bulk buy.”

Excerpt From: Christian Brose. “The Kill Chain.” Apple Books.

“Even basic tasks that used to be routine bodily functions in Congress, such as passing a federal budget, have become nearly impossible. Indeed, over the past ten years, Congress has managed only once to pass spending legislation for the Department of Defense by the start of the fiscal year. When Congress fails to do its job in this way, it passes a “continuing resolution,” which requires the military to spend money on only the things it spent money on the prior year. Not only does this waste billions of dollars in misallocated resources, it literally locks the military into the past and prevents it from implementing its plans for the future. This is how the Department of Defense has spent nearly one thousand days of the past decade. The US military now plans to start each fiscal year without an appropriation of funding. Pentagon planners painstakingly negotiate contracts and structure programs to avoid critical payments in the first quarter of each fiscal year so they do not end up in breach of contract when they inevitably get stuck on a continuing resolution. Even then, problems arise. When Congress failed to pass a budget for six months at the start of the fiscal year, for example, the Navy had to renegotiate roughly ten thousand contracts, which senior Navy leaders estimated cost them roughly $5.8 billion in wasted buying power. That could have bought three destroyers.”

Excerpt From: Christian Brose. “The Kill Chain.” Apple Books.

Weekly readings – 16th May 2020

A scathing critique of AWS from this engineer

Related to the link above, this is quite a blog post from someone who used to work at Amazon and was working at Google at the time of the writing

Content, Cars, and Comparisons in the “Streaming Wars”. Matthew Ball’s essays are always great to read

The secrets behind the runaway success of Apple’s AirPods

How Morning Brew grew to $13m in revenue with 33 employees

Vauban Architecture: The Foundation of Central and Northern Vietnam’s Citadels

The latest memo from Howard Marks

How the most prized degree in India became the most worthless

WeChat Surveillance Explained

If Landlords Get Wiped Out, Wall Street Wins, Not Renters

All applications used at GitLab

Chicago Will Now Require Food Delivery Apps to Disclose Itemized Cost Breakdown. You can protect restaurants or you can protect delivery apps. In this case, I don’t think you can do both. I am glad Chicago went with restaurants

Source: Crunchbase

How Khan Academy Successfully Handled 2.5x Traffic in a Week

The faded beauty of abandoned cars across Europe and the US

“Visa saw an 18% rise in U.S. digital commerce spending during the month of April, excluding the travel category, as face-to-face transactions fell 45%”

From Boston to Saigon: A Coronavirus Quarantine Diary

Lessons From Slovakia—Where Leaders Wear Masks

Senate Votes to Allow FBI to Look at Your Web Browsing History Without a Warrant. I’d argue that this is a bridge too far into user privacy

Next time if you want to support local restaurants by ordering on delivery services like Grubhub or DoorDash, you may want to do a bit of research on how those services treat restaurant partners. Here is an example

Barriers to entry become liabilities during Covid-19 & remote working

Barriers to entry become liabilities

For the past few weeks, I have seen people claim that Disney is doomed because it reported millions of loss due to the closure of its parks and resorts which, in normal times, bring a lot of revenue and margin to the table. In the same vein, airlines are called a horrible business since there are a lot of costs involved and it’s capital intensive, making it extraordinarily vulnerable in the face of a pandemic like the one we are going through.

They have a point.

However, it’s also important to remember that the current liabilities are what make barriers to entry in their industries so high. Restaurants have low barriers to entry, so it’s not unusual to see a new restaurant in town every day. How often do you see a new airline come up? Because the barriers to entry are so high, airlines at least don’t have to worry too much about a new competitor enter the fray often. Similarly, operating a park like Disneyland is no joke. It requires employing hundreds of employees and a tremendous fixed cost as well as maintenance expenses. How many parks at the same scale as Disneyland enter the market every week/month?

This crisis will blow over. It has to. It’s unfathomable to think that we will be in this self-quarantine forever. Once we get back to normal, whatever it may be, people will fly and go to Disneyland again. Although I don’t deny that what reduces new competition for those businesses now becomes sort of liabilities, it’s worth remembering that nothing good comes easy. The same logic applies to business

Remote working

Plenty of discussion online has been about how people will adjust their working style post-Covid19. Even in my company, talk has been going around on how folks will continue to work remotely for a while and how preparation should be looked into to accommodate that need. Personally, I think there will be a mixed working style moving forward. Indeed, working remotely saves everyone time from having to dress up and driving to work. Nonetheless, there is also value in face-to-face and human interaction. There is a reason why companies design common areas, hoping that folks will randomly bump into each other and creativity will spark. Plus, speaking from personal experience, I am sick of sitting at my desk, staring at the screen for hours and putting more time into work. I miss my workplace, my coworkers and casual conversations at work. So, even though folks will prefer working remotely 100% in the short term, in the long run, I expect it to be a mix.

Small yet important things to do in office

The following are some small practices that I have learned so far in my career. They have worked well for me and I’d like to share them openly.

Take initiatives and put in the work early on

When you are new and especially when you are just fresh from school, it’s important to put in the work early on and take as many initiatives as you can shoulder. In my current job and with my severely limited banking experience prior to this role, I took as many JIRA tickets (a system used to manage projects) as I could. I put in hours of going through others’ code, through as all the fields in many tables in the data warehouse. The effort seemed to pay off. I am more comfortable now with the data and how it all works than I was a year ago. Plus, I built myself through the projects a library of code that can be re-used. It helps me get projects done more quickly. It’s more difficult than I thought, but at the same time, that’s why it is satisfying when you can see your personal progress.

Don’t show off or bury others in public

If you can point out a coworker’s mistake privately, do it, instead of hitting “reply all” to a group email. There is no gain in embarrassing others publicly even though that’s not your primary motive. If the point is to ensure all information and output is correct, talk to the person privately.

I have seen people humble-brag in emails about how they put in extra hours or did something great or found something new. I did that myself early in my career. However, I learned that nobody likes humble-brag. At least I don’t. I would tell my younger self the same thing. The reason why many people at work, especially those who came before, didn’t advertise as much is because they didn’t bother to. So why should you? Keep your head down and do the work. Recognition will follow. If you don’t humble yourself, life will do it for you instead.

Feel comfortable saying “I don’t know”

I also have seen folks blurt out answers to questions without thinking them through. Such answers likely have holes that invite further questions. In many cases, it may be the best way to build/keep credibility just to say: “I don’t have an answer right now. I’ll get back to you later”. Executives may have more information than you and can point out numbers or facts that don’t seem right, but I am pretty sure they don’t have all the answers on the cuff either. So why should you try to?

Do your own research first

I had recently somebody at work who is longer tenured than me ask me how to extract a month from a date field in SQL. I guarantee you that if you google it, the answer will be in the top 3-5 results. If you were asked that question, especially from somebody more tenured, how would you feel? My experience teaches me that people are willing to help, but they are happier to when they see that you already tried yourself. It’s very frustrating when somebody didn’t even try and kept bugging you with questions. Nobody is born with knowledge. All is gained and earned.

Document things

If it’s a piece of code, comment on what you wrote. If it’s a fairly complex process that needs screenshots and instructions, put it in a Word document. First of all, somebody else will benefit from the practice. Second of all, you yourself will appreciate that you documented it. As we age, our memory doesn’t get any better. Even if our neurons don’t deteriorate, we have to deal with an increasing amount of information every day.