Weekly readings – 18th July 2020

What I wrote

Uber’s latest chess moves

An interview with AirBnb CEO Brian Chesky on the future of his company and travel

What I think of a potential Twitter subscription feature

A groundbreaking and disheartening study on violence against women in Vietnam

Chris Evans started a project to facilitate communication between voters and elected officials. It’s called A Starting Point

Business

Kroger conducted a test in which they moved plant-based meat into the meat section at some select stores. The test proved that the move lifted sales of plant-based meat. This is great news for suppliers such as Beyond Meat and environmentalists.

In the past, I was somewhat bearish on Netflix’s prospect, but I have grown more bullish over the past year. The high retention figure below bolsters the new position

Source: Second Measure

Lidl’s entering the Long Island market caused competitors to reduce item prices by 8% to 15%. It’s worth noting that Lidl commissioned the study, but it was independently conducted.

Amazon is formidable in online grocery. The company leads many aspects in the latest study on consumer satisfaction with online grocery services.

Technology

US Netflix Subscribers Watch 3.2 Hours and Use 9.6 GB of Data Per Day

This company presents an interesting concept when it comes to encryption. Slack-rival Element wins largest ever collaborative software deal

A government’s role in stimulating demand and widespread adoption of next generation products is at play here. Europeans get substantial subsidies for electric cars from their government

How SHA-2 Works Step-By-Step (SHA-256)

What I think is interesting

According to JP Morgan, 19% of eCommerce transaction value in Vietnam in 2019 was through digital wallets while 34% was through debit and credit cards

How Parmesan cheese is made and how you can identify the real Parmesan cheese. Fascinating stuff

I didn’t know there is a company that has an exclusive deal with airlines to buy lost luggage

‘Absolutely No Mercy’: Leaked Files Expose How China Organized Mass Detentions of Muslims

Scale and Loyalty are more important online than offline

The competition for immigrants will heat up soon as women are giving birth less, especially in developed countries

Graph of number of children women have
Source: BBC

AirBnb CEO on how Covid-19 changed travel and what is going on with the company

AirBnb CEO Brian Chesky had an interview with Bloomberg two days ago. First of all, I think Brian seemed very real and genuine in this interview. Watching him speak didn’t give me a sense that he was a robot reading script or a politician giving all kinds of lip services or false hope. For example, he admitted to being unfocused in the past, working on too many things at AirBnb at the same time. He also publicly committed to publishing data on diversity at AirBnb one year from now. That kind of genuineness and down-to-Earth attitude are refreshing to see. He talked about his commitment to diversity & equality, how he thinks about IPO this year, what mistake he made while running AirBnb, Online Experience, how Covid-19 changed travel behavior and so on. But I will only discuss two topics as follows:

How Covid-19 changed travel

While many people said that travel pre-Covid as we knew it is forever gone and we will never see it again, I am much less certain on that. Humans are quick to forget. Once we have the vaccine or have this virus under control, no matter how many years that will take, I think we can get back to where we were travel-behavior-wise. Things tend to be cyclical, you know. Nonetheless, Brian talked about what he has seen in terms of behavioral changes of travelers:

  • Business travel will take a lot longer to recover
  • EU has recovered solidly from the pandemic. Asia started the recovery path. Latin America hasn’t recovered much. He said that the US “has been really really strong” and it “has seen a temporary recovery”. I am not quite sure how to think about it. The US has repeatedly seen a new high on the number of cases in a day for quite a while now. Even if a portion of the population traveled, what would that do to the full recovery? Would take delay the recovery much longer?
  • Less interest in travel to urban areas with dense population and in cross-border travel
  • Travel will be more local

For the foreseeable future, there will be major changes in how businesses operate in the tourism industry. Attractions will have to take into account social distancing when designing tours. Travel agencies will have to arrange transportation for small groups only and avoid trips to crowded places. Hotels or AirBnb hosts will have to increase the hygiene level and how to communicate that to travelers.

If you look at countries whose tourism plays a huge part in the overall economy such as France or Italy, they were decimated by the pandemic. However, they have recovered since and started to take on tourists. The picture is very different for the US. Not only does nobody want to travel here at this time, unless they absolutely have to, but the people living here are now banned from visiting Europe. The lack of commitment to take on short-term losses for future prospects and, by extension, the absolutely atrocious handling of this pandemic are setting this country back months in recovery and perhaps even longer for the US tourism industry.

Online Experiences

AirBnb launched Online Experiences in April 2020 due to the pandemic. The service allows hosts to craft a unique experience online for a small group of guests. After reservations are confirmed, guests receive a Zoom invitation through which they can live participate in the Experience. For instance, you can book to learn how to cook with this Michelin chef from Italy in a live stream session along with 9 other people around the globe without leaving your home. All you need to do is to make a reservation, prepare ingredients beforehand and join the Zoom session.

Source: AirBnb

Brian Chesky said that it is the fastest growing product of AirBnb, even though he didn’t specify whether it’s the fastest growing product ever or it’s just during the pandemic. He did reveal that the service has had 400 Experiences listed so far and generated $1 million in bookings.

AirBnb is quick to improvise and pivot during this pandemic that severely affects travel. I can see some value in this service. Firstly, for folks who feel lonely during this crisis (and there are a lot of them), this is a great and inexpensive way to meet new people and learn something useful without enduring more risks. The live stream format is key because if this were an on-demand video clip like what we have with streamers like Netflix, it wouldn’t work. There needs to be a real and tailored human interaction. That’s why I think it makes sense to limit the number of participants to maximize the interaction with each person.

Secondly, take Vietnam as an example. Our borders have been closed for months. Hosts can take advantage of this opportunity to offer local tours or experiences and gain revenue that wouldn’t have been possible otherwise.

Regarding the future prospect of this service, I am not convinced yet. Covid-19 necessitates online interaction. However, when this blows over, though it may take some time, how much will people still prefer online interaction and how much time will they have for these experiences? There are many other services that can offer similar online lessons. Once people are free to leave home, they no longer need some strangers on the Internet to bond with to alleviate the loneliness as there are countless distractions. I don’t have any data, but that $1 million bookings in 3 months globally seems a bit soft. Furthermore, the live stream nature and the small group requirement of this service don’t necessarily let host scale their revenue. They are constrained by their time, being the presenter physically and the number of participants. Hence, I suspect that revenue from Online Experiences may just shift to Experiences post-Covid.

In sum, it will be interesting to see what the future holds for the tourism industry and AirBnb, in particular. The pandemic threw its plan to go public in the trash bin and significantly altered its business. If you are interested in the company, have a listen to Brian’s talk. Once again, I really like his down-to-Earth tone and genuineness.

Weekly readings – 25th April 2020

IEEE has an article outlining the role of mainframes even before the crisis. I am always of opinion that mainframes aren’t going anywhere soon. The legacy system has its strengths that work in favor for data-processing companies such as financial institutions. I had a professor in Omaha before who was an executive at Mutual of Omaha. He told me in 2018 that one of the important applications at the insurance company is still on mainframe and they fly periodically a mainframe developer from Chicago for maintenance work.

In the last 70 years, the physical size of Kansas City has quadrupled while the population has remained relatively stable. (Put another way, every resident of Kansas City is on the hook for maintaining four times as much of the city as his or her predecessors.)

Source: We’ve Built Cities We Can’t Afford

Everyone is baking — and entrepreneurs are rising up to meet the demand

Uber’s Paid Sick Leave Policy Is a Perpetually Moving Goal Post

Magic Keyboard for iPad Pro: A New Breed of Laptop

Bloomberg’s story on AirBnb and the state of the known startup

Gruber’s review of iPhone SE

A report by WSJ on how Amazon allegedly uses merchants’ data to launch its own private labels. There is nothing wrong with Amazon launching private labels. The problem is that the company vehemently denied using merchants’ data to help it do so

A decision by Supreme Court that can prove to be defining in the future. I understand the logic behind deporting folks who committed crimes. What concerns me here is that the process didn’t take into account the recent behavior.

A damning report on Bird. I haven’t been a fan of the company or products. I get its value proposition, but coming from a country where scooters are the primary transportation method, I am as enthusiastic about Bird scooters as others. Plus, the high valuation in a short period of time, despite an unproven unit economics, always feels wrong to me.

Weekly readings – 14th November 2019

FDA Approving Drugs at Breakneck Speed, Raising Alarm

Climate change: Oceans running out of oxygen as temperatures rise

Should I delete Tinder? These millennials think so

The lesson to unlearn

Why some of America’s top CEOs take a $1 salary

The Video-First Future of Ecommerce

How Airbnb Profits From Our Love of Experience

This article talks about how Apple’s stance on privacy makes life harder for advertisers.

Startups and Uncertainty

A very interesting study on podcasts

Deceiving pricing practice in hospitality in the US

I am not a fan of the tipping culture here in the US as I wrote about it before. I find the pricing practice in the hospitality in the US equally annoying.

I was trying to book a place in Chicago for an upcoming trip. Here is how a room’s price looks on AirBnb:

The initial listed price you see is just 66% of the final price you pay. All the fees make up 33% of the final bill. Wonder what it’s like on OTAs such as Booking.com?

After everything is added, the final price is 25% higher than the advertised price. Resort fees are basically what hotels charge you for the use of amenities and facilities on top of the base room. Think of it this way, instead of pricing everything (base room + facilities) together, hotels break them out in order to charge more. It’s worth noting that not every hotel charges resort fees.

I am not saying that the properties have to eat up the taxes themselves. Nonetheless, I would feel more comfortable if they could just advertise the final prices, including everything. The prices will be higher, but so will be the competitors. So relatively speaking, there won’t be any loss of pricing appeal, but the consumers such as myself won’t feel deceived.

Weekly readings – 11th May 2019

Charlie Munger, Unplugged. I try to read as much as possible about Charlie Munger. This is a great interview with him. The part I like most about the interview is when Charlie talked about how he read till he slept.

In News Industry, a Stark Divide Between Haves and Have-Nots. An insightful and fascinating piece on the struggle of newspapers as a whole to generate digital revenue to offset the loss in ads dollars. Only a few exceptions and the Big Three (WSJ, The Times and The Post) seem to have managed reasonably well.

Uber Wants to Be the Uber of Everything—But Can It Make a Profit? The “we are going to be the Amazon of transportation” narrative will be used a lot ahead of Uber’s IPO. I can see some value in that, but frankly, I don’t believe that is the case at the moment. The level of competition that Amazon had to face back in the day and Uber has to face now is likely different. I doubt Amazon faced a lot of legal challenges as Uber has had up to now. Plus, the economics of the two companies aren’t the same. Look at the chart below and see if there is any similarity between the two

Eating breakfast is not a good weight loss strategy, scientists confirm.

Can Bird build a better scooter before it runs out of cash? A revealing piece on the scooter business.

Ilargi: Renewables Are Dead. I find renewables polarizing as a subject. There are fans on each side of the argument. No matter what, I guess if we hadn’t tried, we wouldn’t have known what we know now.

New Data: The Airbnb Advantage. According to AirBnb, New York, London and Paris make up less than 3% of its total listings and no city makes up more than 1% of the listings.

Ethiopia’s garment workers make clothes for Gap, H&M and Levi’s but are the world’s lowest paid. Workers in sweat shops in Ethiopia got paid $26/month. The same figure in Vietnam is $180/month.

India’s water crisis is already here. Climate change will compound it.

Weekly readings 4th May 2019

The Airbnb Invasion of Barcelona. A look at how tourism-related problems got out of hand at one of the hottest destinations in the world, Barcelona.

Netflix Fights to Keep Its Most Watched Shows: ‘Friends’ and ‘The Office’. It’s amazing that “Friends” and “The Office” make up of 5% of the total watching minutes on Netflix and yet the streaming service doesn’t own the rights to those IPs.

The bitter truth behind the Nutella economy. If you care about the ethical aspect of business, you may want to read about this. I understand that there are a lot of products or services that we use everyday come from organizations with a record of questionable ethical practices. However, given that Nutella is pretty popular around the world and in America, you may want to know a bit more about it. And it’s not good for your health!

IHG Sees Room for Improvement in Hotel Revenue Management. The article discusses mainly the attribute-based booking trend in the hospitality industry. Attribute-based booking refers to the model that allows guests to choose from a room level such as number of beds, view and room type to amenities inside the room. Everything is a la carte. It can create the maximum personalization and excitement for guests, but it will require a totally different operations from inventory, marketing to housekeeping and revenue management.

The Most Valuable Company (for Now) Is Having a Nadellaissance. A great coverage on how Nadella revived Microsoft. I really like his no-nonsense style that was shown when he refused to celebrate the $1 trillion valuation.

The fight for the bundle is the war for the future of TV. A nice piece on the state of TV

The making of Amazon Prime, the internet’s most successful and devastating membership program. I found it interesting to read stories on how Prime came into beings. The stories show how great Bezos’ business acumen is

Weekly readings – 30th March 2019

What even is AirBnb anymore? Questions that AirBnb will face ahead of its IPO and after.

2018 Theme Report. An informative study on the theatrical and home entertainment market environment in 2018.

How Kirkland Signature powers Costco’s success. A nice coverage on the signature private label of Costco.

2019 State of the Cloud. A framework to look at cloud businesses by folks at Bessemer Venture Partners.

The 2019 Drunk Shopping Census. An interesting piece on drunk folks’ purchase behavior. It must be tough for one to recall back the purchases made when drunk when one participates in the survey. The folks at The Hustle are good with words and sometimes have pretty good content. Give them a follow if you want daily email with overview of what happens in business and tech.

AirPods. I totally agree with the author of this post. AirPods are truly a massive success. Since I bought them last May, I have used them at least 6-7 hours a day every day. Sometimes, I don’t even feel that they are in my ears. Convenience goes up significantly. The sound may be not as good as power users of wireless headphones would want, but it is good enough for average users like myself. The design is just right. You can exercise without worrying about losing them. (Follow Horace Deliu if you are a fan of micro-mobility and Apple)

The State of Online Travel Agencies – 2019. A good overview of Online Travel Agencies’ performance last year.

How Spotify & Discover Weekly Earns Me $400 / Month. A specific and personal example of how Spotify helps obscure artists get paid for their work. This is why I love Spotify.

Weekly Readings – 23rd March 2019

Chi Dung’s R collection. This guy’s work is impressive. If you are interested in R, take a look.

The Big Brexit Short. I really like this kind of investigative videos by Bloomberg. I honestly don’t follow Brexit enough. Hence, it’s good to know about this potential scheme. I highly recommend you check out Bloomberg’s Youtube channel. Treasure trove of good information.

What the hell is going on. A very long, yet informative study on how the switch from information scarcity to information abundance affects business, education and politics.

On the Hunt for Japan’s Elaborate, Colorful Manhole Covers. An interesting story on a beautiful aspect of Japan’s culture.

How India conquered YouTube. I find the article fascinating and informative. A good overview of Youtube’s popularity in India and the media consumption behavior in the country.

Howard Marks’ memos. His excellent and insightful memos are praised and read by Warren Buffets and many investors.

I found two links here and here that are very helpful in understanding the subscription model.

Nine Reasons Why Disney+ Will Succeed (And Why Four Criticisms are Overhyped). A fair and detailed piece on Disney+, Disney’s upcoming streaming service. I cannot wait to try the service myself

Inside AirBnb’s “Guerrilla War” against Local Governments. A very good article on how AirBnb fought local governments in the US to avoid taxes and restrictions that the local lawmakers sought to put on them. I am a believer in the fact that if the law allows you to avoid taxes, you have every right to not pay taxes and stay competitive. However, fighting hard to stop new laws (laws always play catch-up with the business world) intended to make AirBnb pay taxes is a bit too far. Loss of taxes strips a local government of necessary revenue to fund projects that will benefit citizens. If your business earns millions of dollars in revenue and profit, what’s the reason for not paying taxes? Simply by “being a platform”?

Pinterest S-1. The photo bookmarking company filed to go public.