Weekly reading – 27th August 2022

What I wrote last week

Do as I do

Should you stay at a job for more than 2 years, no matter what?

Business

($) Amazon Adds Revenue Streams as Holiday Season Approaches. I wrote a bit about Amazon’s influence on US-based merchants. Let’s say if these merchants manage to sell 10,000 items per minute on Amazon, the increase in fees will result in an extra $5 million per day for Amazon or approximately around $375 million for the quarter. It’s not insignificant, even for a firm that big. I am curious to see the reaction from sellers. On one hand, nobody likes to see costs rise. On the other hand, can these sellers afford to leave Amazon?

How Amazon’s DSP program has created $26 billion in revenue for owners. Amazon has more than 3,000 delivery partners around the world. It may not sound like a lot, but I don’t imagine it’s easy to figure out the kinks of running a complex delivery system involving the internal operation and that of external partners. VRIO is about finding and cultivating Valuable, Rare, Inimitable and Organized capabilities or resources. This can be Amazon’s one of many such capabilities.

($) Instacart Revenue Growth Accelerates Ahead of Planned IPO. Now is not a great IPO environment for Instacart. Growth yet unprofitable companies have seen their stocks plummet in the past 10 months. It’s very likely that Instacart will be another name in that group. A quick comparison of the quarter ending 30th June 2022 between DoorDash’s publicly reported numbers and Instacart’s numbers reported in this piece – Booking volume: $13 billion for DoorDash vs $7.1 billion for Instacart; Revenue: $1.6 billion for DoorDash vs $621 million for Instacart.

Consumers Are 19% More Likely to Complete a Purchase with Venmo Over Traditional Payment Methods. Venmo is incredibly popular among end users, especially the younger crowds. To merchants, Venmo can be a value add as well. “In another study of more than 300 thousand U.S. consumers and an analysis of more than 3.4 million transactions,1 we found that Venmo users shop over 2 times more frequently than the average shopper and are 19% more likely to make repeat purchases. ” How PayPal monetizes Venmo will play a crucial role in the company’s future.

Secret ‘Batgirl’ Screenings Hit the Warner Bros Lot. Putting away content that took hours and millions of dollars to create just for tax write-down purposes seems a bit extreme.

Amazon bought Whole Foods five years ago for $13.7 billion. Here’s what’s changed at the high-end grocer. One frustrating aspect of following Amazon is that the company doesn’t break out Whole Foods’ financials. It’s almost impossible to gauge the success of this expensive acquisition. Nonetheless, it’s good to read through the operational changes since then.

Microsoft employees love Figma, and it’s testing the company’s cozy relationship with Adobe. Usually, an upcoming challenger is more popular among small companies while the incumbents are favored by big corporations. In the case of Figma, it’s widely popular at a giant shop like Microsoft. It’s good for them, but a warning for Adobe

WhatsApp grocery shopping is already huge in Brazil. One startup wants to take it over. An intriguing concept to use Whatsapp groups for e-Commerce. Trela manages multiple Whatsapp groups, posts weekly deals in the groups so that users can place orders as well as manages orders and deliveries. Merchants save time. Users get informed of the deals and can buy goods conveniently. What concerns me are the management of groups and scalability. First, Whatsapp groups are limited to 256 users. A medium-sized city will require like more than 100 groups. What about a big city then? How does Trela manage the groups, the communication and the orders? Second, people move from one city to another. How does Trela manage the changes? What if somebody leaves the old group but can’t find a spot in any new group?

Other stuff I find interesting

Deep Time Sickness. An interesting long read on Mexico, its history of earthquakes and the consequences.

Fleeing Putin, Russian tech workers find a home in Armenia. Reading this article, I cannot help but feel that Russia is living off only its natural resources and former glory. The brain drain will deplete the country of valuable human capital and innovation; something that is not easily reversed.

France is now offering a €4,000 e-bike subsidy to people who trade in their car. The initiative sounds great on paper: stimulate exercise, encourage folks to ditch cars for e-bikes. The 2nd-order effect will be more space for cities and outdoor activities for everybody. I am sure there will be scientific research into how much this initiative benefits the country and cities and I really look forward to reading such research.

The utterly delightful site dedicated to classifying plastic bread tags. Such a quirky hobby

For Japanese Uber delivery drivers, gig work is working. “The word “freedom” crops up when talking to Tokyo’s delivery drivers. Their full-time employment alternative, after all, is likely an all-consuming office job, involving long, draining hours and a demanding work culture; part-time at a bar or convenience store, they’d face fixed shifts and constant supervision. While the gig worker industry has come under fire around the world for years of shrinking wages and poor conditions, Japan’s experience, so far, is different; in stark contrast to global lawsuits, protests, and strike action, Japan’s workers, by and large, appear content with the rare flexibility their jobs provide. A recent Japanese study, the first of its kind, surveyed roughly 14,000 delivery drivers from major companies across the country. While most of the workers were new entrants — around 60% have been working less than a year, and the vast majority worked 40 hours or less — 63% said they were “satisfied” with their work; 82% reported that they would like to stay in their jobs “for a while” or “forever.”

Stats

35% of Venmo customers are between 18 and 29 years old, versus 23% across the US

‘House of the Dragon’ draws nearly 10 million viewers

Bank of America Clients’ 1 Billion Digital Logins in July 2022

Do as I do

When I started working 10 years ago, I joined a local advertising agency in Vietnam. I was an Account Executive, the lowest rung of the ladder. I worked under an Account Director named Quang. I didn’t know much about her. In fact, I never got a chance to get to know her better at the time since she left two weeks after I joined. But she taught me an important lesson. One time, we were preparing a pitch deck for a potential client. I was tasked with doing some market research and putting together a few slides. Upon review, she told me that my slides didn’t have smooth transition because images were off by a few pixels from one slide to another. What she wanted was that when the audience moved from one slide to the next, everything would stay in the same position and there would be no movement, no changes in size of the images. Only the content of the images would change. I was shocked at the attention to detail and more when I saw the final product and other pitch decks from her. She did what she asked of me, even though I didn’t know her credentials at the time.

Almost two years ago, my company recruited a new person. This guy didn’t have any experience managing a credit card portfolio at an issuer before. Somehow, he was trusted by the leadership team to manage the acquisition side of a portfolio worth millions of dollars. The first few months on the job, he kept preaching about data-driven decision-making. Whenever somebody proposed something, he challenged by asking what data supported this. To me, that was a legitimate question. You need to back up your hypothesis with concrete numbers. The thing is that the standard doesn’t seem applicable to him. He repeatedly makes suggestions and decisions by starting with “my guts say” or “my hunch is”. A case of “do as I say, not as I do when the track record is non-existent”.

Amazon is known for putting a lot of thoughts to ideas before execution, even if such ideas might be crazy and far-fetched. The objective is to make the initiator think through the idea as much as possible. In “Amazon Unbound”, Brad Stone described two stories that were contrary to that reputation. In one instance, Jeff Bezos, the founder and legendary former CEO of Amazon, proposed off the cuff that the company should launch food trucks that roll into neighborhood and sell steaks to residents. Internal teams were tasked to develop a plan for that idea and execute. After more than one year and numerous days and nights worth of efforts, the service went live. But it was unsuccessful and abandoned shortly.

In another example, Jeff Bezos wanted his team to create a “single cow” burger that can only be bought from Amazon. The idea is that this Amazon burger would have meat from only one cow whereas commercial burgers on the market sourced the meat from several. It was even designated as one of the high-priority goals, directly tracked by Bezos himself and his direct reports. After almost one year, the product launched with great customer feedback initially. But the unit economics of this product didn’t make sense, as feared. Consequently, it eventually fizzled out.

You see, the one common theme of the three stories above is that a person in power asks somebody down the food chain to do something. The difference lies in whether the authority has credentials and whether such authority sets examples. My first manager showed leadership by setting examples, even though I had no idea about her credentials. The guy at my company didn’t adhere to the standard he set despite non-existent track record. Jeff Bezos didn’t demand of him what he demanded of others, but he had a monumental track record of great decisions.

The lesson here to me is that leaders should lead by examples. Show the troop that the standard is applicable to everybody, not selectively only when the situation suits those in authority. That’s especially important when a previous track record doesn’t exist. An established successful credential will earn a leader some leeway, but he or she should not use up the rope and act like they are THE culture and the expectations don’t apply to them. Aldi wouldn’t be what it is today if executives drove fancy cars and splurged the company’s money on themselves while forcing employees to find ways to cut expenses. Warren Buffett wouldn’t command respect and following if he showed up on newspapers with a scandal every 6 months, would he?

The longer leaders lead by examples, the stronger a culture becomes.