I’ll take Heartland B-Cycle over E-Scooters

E-scooters have been taking over for the past couple of years. Brands such as Lime or Bird have received millions of dollars in funding and expanded to countries all over the world. Names like Lyft also ventured into this area. In big cities and even smaller ones such as Omaha, folks, mostly younger ones, can be seen riding scooters pleasurably.

Personally, I; however, prefer riding the rentable bikes from Heartland B-cycle. They are bikes available for rent for $10/month or $80/year at stations throughout an area of Omaha. Riders can use the bikes for one hour before having to return them to a station to avoid additional charges. There are a few reasons that can explain my preference for the rentable bikes.


My last ride with Lime was 0.7 mile long and it cost me $2.45. With $10/month, I can have unlimited rides with B-Cycle

Health issues

There is virtually no health benefit that can be gained from e-scooter. You hop on the scooter, turn it on and go. With B-Cycle, at least it’s going to be a nice cardio workout.


Already in Omaha have I seen many e-scooters left carelessly everywhere downtown. Folks have no regard in where they should leave the devices after use. On the other hand, you have to return B-cycle to its stations, unless you want to pay a significant fee afterwards.

According to Quartz, an e-scooter’s lifespan is 28 days. The Information reported that two of Lime’s models can last a bit longer, up to 17 weeks. In addition to expensive marketing and promotions, e-scooter companies burn a lot of cash in maintenance their fleet. Each Bird scooter costs $550. Imagine having to replace hundreds of them every 3 months. Bird has raised $415 million to date with the latest round announced just 5 months ago, but it is said to have around $100 million left in the bank and to have reduced its fleet.

The unit economics for e-scooters doesn’t look very appealing and there is no clear path to profitability. I do think more good would be done from having all that money invested in public transportation or alternative such as B-Cycle.

Some may argue that e-scooters are more flexible and can get riders to more places. Nonetheless, within 2-3 miles, a well-planned network of B-Cycle can get us into walking distance to anywhere. For a reasonably long distance, it would be much more expensive to ride e-scooters. And for a long distance, it’d be best to use other alternatives such as buses, cars or services like Uber of Lyft.

For your imagination, take a look at what Germany has for bikers

Amazon Secured Credit Card for those with low credit profile

Amazon partners with Synchrony to offer a secured credit card to those who have a low credit score. Normally, a low credit score results in a rejection of a credit card application at a financial institution due to default concern; which, in some real-life cases, can lead to significant trouble. With the Amazon Secured Credit Card, potential customers put in an amount of money that serves as collateral and their credit limit. Customers then gradually build up credit profile by being financially responsible before graduating to a better credit card.

I think it’s smart of Amazon to implement this initiative

They can tap in a new customer segment

It’s hard to imagine that folks with low customer score can be Prime members and Amazon’s profitable segment. Yet, after years of exploiting the higher customer tier, Amazon will likely need to widen the customer pool for growth and more than 11% of the population in the US is a sizable segment to appeal to.

This will increase switching costs and customer loyalty

Amazon Secured Credit Card comes with 5% cash back on purchases like the ordinary Store Card. A pretty competitive cash back rate on every purchases. Convenience, a variety of choices and generous cash back can definitely encourage purchases on the Seattle-based company’s website.

More customers and purchases mean more vendors and advertisers

Vendors who wish to appeal to low-credit-score customers will want to get on the e-commerce platform if there is enough demand. Advertisers will be willing to pay to put their products, services or brands in front of the new customer segment, in addition to the existing customer base.

The value of trust

Watching Apple WWDC event made me think about the value of trust in business.

During the two-hour event, Apple repeatedly emphasized the trustworthiness of its products and services. The message that Apple protects your privacy and secures your data was told in one segment after another. The thing is that consumers seemed to find Apple’s claim more credible than that of other companies. They trust Apple more in this sense. With that trust, Apple seems to have an easier time introducing very personal products or services to users than others. In addition to a continued push into healthcare, Apple introduced Apple Pay, HomeKit Secure – which allows you to monitor the camera at your front door and sends an encrypted copy to iCloud and Single Sign On. Without trust, I don’t think the enthusiasm would have been as much as that shown during the event. And if they want to introduce something similar to HomeKit Secure, well, good luck with that.

One of a notable releases was Mac Pro, which will cost around $6,000 apiece. though the figure itself does sound expensive, it’s not out of character for Apple. The company has been able to charge users outrageous prices for its devices, yet their annual revenue for the past decade has grown dramatically. It is evidence that consumers trust Apple enough to spend a significant sum on its hardware. In order to pay for a premium, you will need to trust that it carries out basic functions first and on top of that it is worth it. After trouble with Note 7 and the foldable phone, would you still trust Samsung enough to pay $2,000 for its phone?

Trust requires hard work and consistency. Yet, once form, it is a powerful competitive advantage and can open many doors. In some cases, I think it can be the most valuable asset a company can have.

Boeing Max – Failure from incentive, negligence and irresponsibility

“Show me the incentives and I’ll show you the outcome” – Charlie Munger

This is a stunning investigative story on the gross negligence and irresponsibility at Boeing regarding the design of the Max; which ultimately led to two crashes and 346 deaths.

The fatal flaws with Boeing’s 737 Max can be traced to a breakdown late in the plane’s development, when test pilots, engineers and regulators were left in the dark about a fundamental overhaul to an automated system that would ultimately play a role in two crashes.

A year before the plane was finished, Boeing made the system more aggressive and riskier. While the original version relied on data from at least two types of sensors, the ultimate used just one, leaving the system without a critical safeguard. In both doomed flights, pilots struggled as a single damaged sensor sent the planes into irrecoverable nose-dives within minutes, killing 346 people and prompting regulators around the world to ground the Max.

Boeing never disclosed the revamp of MCAS to Federal Aviation Administration officials involved in determining pilot training needs, according to three agency officials. When Boeing asked to remove the description of the system from the pilot’s manual, the F.A.A. agreed. As a result, most Max pilots did not know about the software until after the first crash, in October.

The disasters might have been avoided, if employees and regulators had a better understanding of MCAS. A test pilot who originally advocated for the expansion of the system didn’t understand how the changes affected its safety. Safety analysts said they would have acted differently if they had known it used just one sensor. Regulators didn’t conduct a formal safety assessment of the new version of MCAS.

On March 30, 2016, Mark Forkner, the Max’s chief technical pilot, sent an email to senior F.A.A. officials with a seemingly innocuous request: Would it be O.K. to remove MCAS from the pilot’s manual?

The officials, who helped determine pilot training needs, had been briefed on the original version of MCAS months earlier. Mr. Forkner and Boeing never mentioned to them that MCAS was in the midst of an overhaul, according to the three F.A.A. officials.

Under the impression that the system was relatively benign and rarely used, the F.A.A. eventually approved Mr. Forkner’s request, the three officials said.

Boeing wanted to limit changes to the Max, from previous versions of the 737. Anything major could have required airlines to spend millions of dollars on additional training. Boeing, facing competitive pressure from Airbus, tried to avoid that.

Despite whatever Boeing has to say about safety being the number priority, actions speak louder than words. As the article and the last paragraph in the quote section above show, they care more about profitability than about passenger safety. I am sure safety was mentioned somewhere in the process by caring and responsible individuals. However, in the end, getting ahead of competition and generating money seem to trump everything else. To make matters worst, the FAA leaves the required safety checks to employees of airplane manufacturers since it doesn’t have the necessary resources. When Boeing can play the judge role to its own performance in a game in which it’s incentivized to not be honest or critical of itself, what would the FAA expect then? You’d have all the recipes for a disaster to happen and it did, twice.

Incentives, unless done prudently and strategically to align with desired goals, could lead to unfortunate failures, sometimes of a great magnitude.

I used to feel safe when flying several years ago. Lately, there have been several unfortunate tragedies involving airplanes. Nowadays, I feel uneasy and anxious whenever a flight takes off or when there is turbulence, and I breath a sigh of relief whenever we land safely. The article doesn’t really help the issue here, from how manufacturers have interest in not doing their full due diligence to the authority not having enough resources to work properly.

China’s Mega Projects Series

This series on China is pretty amazing. It covers important, strategic and ambitious projects that the neighboring country of us Vietnamese has been working on.

It is understandable to compare Vietnam to China. There are a lot of similarities shared between the two countries in terms of history, culture, political systems and economic models. Yet, the difference I notice is that China has been light years ahead with regards to not only generating money/growth, but also investing in growth.

In Vietnam, we don’t have that kind of projects covered in the series above. We have been working on the first ordinary metro for almost a decade and the project is only about 60% done. In the meantime, China has super fast trains operated in the country and a magnificent highway network. We don’t have the advances in technology that China has boasted about for years. On the global stage, we don’t command the respect that China does. If some of universities in China are now among the world’s best, those in Vietnam still lag so far behind.

Sad to say, but I have to admit that Vietnam blew a chance some 40-50 years ago. We used to be the Singapore of the region. Now, we are so far behind our peers and neighbors, and there aren’t many reasons that can convince me that things will be turned around in the future.

Are autonomous vehicles the answer to many businesses’ problems?

It’s not uncommon nowadays that businesses mention autonomous vehicles as an opportunity for growth and profitability. Unless their vehicles are self-driven, ride-sharing services such as Lyft or Uber don’t particularly promise a sure path to profitability at the moment. In an article published last week, the CEO of AT&T mentioned self-driving cars as a reason for his optimism

Even Warren Buffett quails at the prospect of competing in such a powerful field of rivals. “Everybody has just got two eyeballs, and they’ve got x hours of discretionary time … maybe four or five hours a day,” he said recently at a charity event, speaking generally about the entertainment industry. “You’ve got some very, very, very big players that are going to fight over those eyeballs. The eyeballs aren’t going to double. You have very smart people with lots of resources trying to figure out how to grab another half-hour of your time.” His assessment: “I would not want to play in that game myself. That’s too tough for me.”

Any business that Buffett wants to avoid sounds unpromising, but Stephenson rejects the legendary investor’s premise. Acknowledging that “there are only 16 waking hours in the day,” he says, “Well, we haven’t filled up the 16 hours yet.” He nods toward his office window over Commerce Street with its busy traffic, which he says will ease when 5G networks enable autonomous cars. “When you have the lion’s share of those cars autonomous, for the average person that’s another two hours of availability of screen time, consuming video.”

AT&T Has Become a New Kind of Media Giant

Are autonomous cars the answer though?

Let’s say, generously speaking, 10 years from now all the cars would be self-driving. What would it look like? If the cars don’t carry passengers, without drivers, where would the cars go? Would all the cars keep driving endlessly till they are called to pick up passengers? Would the cars park on the street and if so, would there be enough space to accommodate all the cars? If the cars park in a garage somewhere, how would the garages be planned and constructed so that the garages are all well spread throughout a decently big area?

There can be many more questions that would result from having mainly autonomous vehicles on the streets. I can’t think of them all, but you get the idea. Right now, we don’t even have many on the streets yet, let alone answering questions and tackling problems that ensue the arrival of self-driving cars. Additionally, I personally don’t believe that we can have all cars or the majority of the cars self-driven on the streets in the next 10 years. I wrote something about it here.

If it takes a long time for self-driving cars to be realized and populated, can the likes of AT&T, Uber or Lyft wait till that time? AT&T’s debt is almost $200 billion and as Warren Buffett said above, and I agreed with his view, that the competition for eyeballs wasn’t going to get any easier. Uber or Lyft keeps losing money operationally and will be expected to continue that path, unless self-driving cars come along. 10-15 years of losing millions, if not billions, of dollars every year doesn’t seem a sort of business that investors like. And before any comparison between Uber and Amazon is raised, the two are far from being similar to each other. Look at their respective operating income.

Source: Wall Street Journal

Obviously, some years from now, it is possible that I may be embarrassed for saying all this and the fine folks in Silicon Valley or that somewhere in the US can deliver the miracle. Until then, I prefer being pragmatic to venturing out too far into fiction and imagination.

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.

How do chained hotel brands make money?

You must be familiar with famous chained hotel brands such as Marriott, Sheraton, Hyatt, Accor or IHG. They are affiliated with a huge number of hotels across the globe. But how do they actually make money? Below is a snapshot of how such brands generate revenue

The bulk of their revenue comes in the form of management and franchise fees. 77% of IHG revenue in 2018 came from management and franchise fees. The figures for Marriott and Accor are 82% and 93% respectively.

Source: IHG 2018 Annual Report

Additionally, these fees typically have very high margin as the expenses are low. The hotel chains receive compensation for their brand power and expertise, which can be easily leveraged. In 2018, the fee business margin for IHG after overheads is 52%, compared to the 7% of owned, leased and managed lease.

Source: IHG 2018 Annual Report

That is why, at the hotel chains, sales department has a target to hit in terms of how many hotels are to be signed in a period. The more hotels are signed, the more fees will flow into these chains.

CrowdStrike looks impressive in their IPO filing

Today, the security startup CrowdStrike filed to go public and the numbers look impressive in my opinion.

Company background

Founded in 2011, CrowdStrike is a cybersecurity startup that offers their services mainly on a subscription basis. The primary offerings include endpoint security, vulnerability management, threat intelligence and a PaaS solution for cybersecurity.


  • Subscription customer base grew from 1,242 at January 31, 2018, to 2,516 at January 31, 2019 – a 103% increase
  • Customers include 44 of the Fortune 100, 37 of the top 100 global companies, and nine of the top 20 major banks
  • Total revenue grew from $52.7 mil in 2017 to $119 in 2018 and $250 mil in 2019, an increase of 125% and 110% respectively
  • Subscription revenue grew from $38 mil in 2017, to $92.6 mil in 2018 and $219.4 mil in 2019, an increase of 144% and 137% respectively
  • ARR growth is impressive as shown below
  • Dollar-based net retention rate grew from 104% in Q4 2017 to 147% in Q4 2019
  • 23% of the company’s revenue came from customers outside of the US in 2019, up from 13% in 2017

Partner & Customers

  • CrowdStrike is deployed on AWS GovCloud after receiving FedRAMP recently
  • Dell & SecureWorks use CrowdStrike’s endpoint security solution
  • Customers include AWS, HSBC, ADP, Hyatt Hotels, The Pokemon Company

Listed Competitors

  • McAfee, Symantec, Palo Alto Networks, FireEye, Cylance and Carbon Black


  • The company grew the top line significantly while the operating loss had a much smaller increase
  • The increasingly profitable subscription that already has higher gross margin than professional services makes up a bigger piece in the revenue while expenses are better leveraged


The company claimed to have a TAM of $24.6 billion and $29.2 billion in 2019 and 2021 respectively. It is a huge market and as companies go digital and have increased exposure due to more endpoints, more data, more cloud environments and more applications, the cybersecurity need will be there. With that being said, it is also a competitive market. Not only are there quite tough competitors such as Palo Alto Networks, McAfee, Symantec, FireEye, but there are also some smaller ones and on top of that, public clouds such as AWS or Azure also have their own security offerings.

I don’t know how they will compete moving forward, but the numbers look pretty good so far. Like many enterprise SaaS companies filing to go public, the company hasn’t been profitable operationally yet, but the situation looks promising with increased revenue and leveraged expenses. Their growth in ARR, negative churn and customer base is impressive. At least, there is a reason to believe that they are heading to the profitability land.

The partnership with Dell, I think, will be very helpful moving forward.

Unsplash’s infrastructure cost and companies’ practice of sharing information

I came across a very interesting post on the infrastructure cost of Unsplash, a site that offers Internet users high quality images that can be used for commercial purposes for free. It’s a nice read to learn about the costs of hosting thousands of images that are accessed by millions of folks. However, what I want to talk about is the practice of (not) sharing information by companies.

Unsplash isn’t required to disclose this information. Yet, they did and I appreciate that a lot. Data and information shared in the post can act as useful reference in the future. The more information you know, the less likely you are on the undesirable end of asymmetric information. For that, thanks a lot Luke and Unsplash.

Nonetheless, you see publicly traded companies try hard to shield away information on important business segments. Take Google for an example. The company’s revenue still grew according to the last earning call, yet failure to provide sufficient insights on their YouTube business caused the stocks to drop significantly. They didn’t disclose information on Google Cloud Platform either. The Mountain View based company isn’t alone. Microsoft doesn’t separate out financial data of Azure and Office 365. Facebook aggregates data of their apps rather than individually report on each of them.

Obviously, I can’t speak for the companies on why they aren’t more transparent. On the other hand, the lack of disclosure comes with the lack of confidence and of the benefit of the doubt. It wouldn’t be surprising to see folks start to wonder: if things weren’t bad, what would they try to hide?