What I wrote last week
Book Review: It’s How We Play The Game
Business
The Demise of Silicon Valley Bank. One of the best pieces on the Silicon Valley Bank saga that I have read so far.
Airlines: Unit Economics, Served Four Ways. An excellent piece on the unit economics of the airlines industry. The key takeaway is that it’s exceedingly complex and difficult to run an airlines company; which, in turn, makes it challenging for investors to really get a firm understanding. I used to be interested in the consolidated power of some US-based airlines. But over time, my interest subsided when I realized that this industry belongs to the “too hard” pile for me.
Amazon’s drone business can’t get off the ground as regulations, weak demand stymie progress. I am going to make a bold prediction that we won’t see Amazon Prime Air in general availability in the next decade. The regulatory challenge is daunting, but I also don’t see the prospect of Amazon operating a fleet of drones smoothly across a vast and diverse country in the US in 10 years. Plus, who can tell the impact on unit economics? Amazon’s culture is about taking long shots and trying things out. Prime Air is closer to the bin than to reality.
($) A Supermarket Megamerger Will Redefine What You Buy at the Grocery Store. Operating a supermarket is challenging. To please customers, operators need to add more values and activities which increase the operating expense and operational complexity. Concentrate too much without unique selling points and operators will lose ground to competitors. Whoever can hit the sweet spot of rich offerings and operating leverage; AND manage to stay there for a while will have an upper hand. On paper, Albertson and Kroger seem to make sense, but we all know that there are other factors that can doom acquisitions and mergers.
Update on Meta’s Year of Efficiency. The one thing that I do not like about this open letter is that they announced layoffs in advance while the affected employees have to wait for months to find out if they have a job. Nobody should enjoy the anxiety of not knowing whether their livelihood will be intact. If you are an immigrant, it’s even worse. I assume there are reasons why Facebook did it this way and I wish they had been more transparent. With that being said, Zuck shared a few good points here on the direction of the company in “the year of efficiency”. “Since we reduced our workforce last year, one surprising result is that many things have gone faster. In retrospect, I underestimated the indirect costs of lower priority projects. Indirect costs compound and it’s easy to underestimate them. Our early analysis of performance data suggests that engineers who either joined Meta in-person and then transferred to remote or remained in-person performed better on average than people who joined remotely. This analysis also shows that engineers earlier in their career perform better on average when they work in-person with teammates at least three days a week. This requires further study, but our hypothesis is that it is still easier to build trust in person and that those relationships help us work more effectively.“
Google nixes paying out remainder of maternity and medical leave for laid-off employees. If I really try, I can see why Google management wants to do what the article claims. After all, when employment contract is terminated, the benefits reserved for employees may be ended too. The keywords here are: IF I REALLY TRY and MAY. The reality is that I am baffled by this kind of cold-blooded and vindictive move by Google. The savings wouldn’t make a dent to the bottom line. But as an employer that wants to attract talent, this would inflict a lasting harm.
Other stuff I find interesting
($) How Beijing Boxed America Out of the South China Sea. “In the years after Mr. Xi rose to power, U.S. officials didn’t realize the degree to which he would break from the past in taking a more confrontational foreign-policy approach, said former U.S. political and military officials. The disputed sea is ringed by China, Taiwan and Southeast Asian nations, but Beijing claims nearly all of it. It has turned reefs into artificial islands, then into military bases, with missiles, radar systems and air strips that are a problem for the U.S. Navy. It has built a large coast guard that among other things harasses offshore oil-and-gas operations of Southeast Asian nations, and a fishing militia that swarms the rich fishing waters, lingering for days. The U.S. missed the moment to hold back China’s buildup in part because it was focused on collaborating with Beijing on global issues such as North Korea and Iran, and was preoccupied by wars in Iraq and Afghanistan. China also stated outright in 2015 that it didn’t intend to militarize the South China Sea”
Migrants must overcome a new barrier at the border: The U.S. government’s terrible app. I have my fair share of anxiety dealing with paperwork here in America, but I never have to stay up all night or get up by 6AM every day and try to use a horribly built app to book an appointment. I believe that the US government can make a lot of people’s lives much better, including their employees’ lives, by upgrading their IT infrastructure. As the so-called wealthiest country on Earth, you can do that, America.
Mediterranean diet may lower dementia risk by a quarter, study suggests. “A Mediterranean diet of nuts, seafood, whole grains and vegetables could lower the risk of dementia by almost a quarter, according to promising early research that could pave the way for new preventive treatments. The findings, published in the journal BMC Medicine, are based on data from more than 60,000 individuals from the UK Biobank, an online database of medical and lifestyle records from more than half a million Britons.”
Banking on the Seaweed Rush. A great piece on seaweed
Stats
About 50% of startups dissolve within five years
Total value of venture capital deals fell by 38% globally in 2022
Minh Quang Duong 