Attention to detail matters

Great executives pay attention to detail. Here are a few examples:

Vic Gundotra, who managed Google+, had a legendary interaction with the late Steve Jobs. In 2008, Steve called Vic on a Sunday while he was in a religious service. Vic didn’t pick up so Steve left a message saying that he had something urgent to discuss. Vic called back and it turned out that Steve was unhappy the second O in the Google logo on the iPhone at the time didn’t have the right yellow gradient. A CEO like Jobs paid attention to the gradient of the second O in the Google logo on a Sunday!

Tim Cook is another example of leaders who pay attention to even small details. When Tim first joined Apple, he held an operations meeting to learn everything he could about the company’s supply chain. Tim probed about the percentage of produced units that passed quality assurance before shipment. When told that the yield was 98%, Tim would ask: how did the other two percent fail? Tim also has a habit of waking up early to review sales data. He once discovered that one model of iPhone was more popular than another model in a small city in Georgia. The difference was due to different promotions run across the state.

Jony Ive was instrumental to the success that Apple had had for the past 20+ years prior to leaving the company in 2019. A great product designer, he was known for perfectionism and a maniacal focus on details. To demonstrate, here is an excerpt from Tripp Mickle book “After Steve” on Jony

IVE’S PERFECTIONISM intensified under Jobs. In 2002, Apple’s leadership agreed to change its laptop cases from titanium to aluminum, a more versatile metal. It tapped a Japanese manufacturer to produce the computer casing, and Ive traveled to Tokyo to evaluate their work with Bart Andre, the product’s design lead, and Nick Forlenza, an engineer who brought designs to life on the factory floor. Ive arranged to meet at the Hotel Okura Tokyo, one of the city’s oldest luxury hotels.

On the day of the meeting, the delegation from Apple and the manufacturer breezed through the hotel’s gold-hued lobby past shin-high tables to a private room. A Japanese executive pulled several aluminum laptop casings out of a manila envelope for Ive to review. The supplier had polished the parts to a shimmering satin silver that reflected the artificial light from the ceiling. Ive hovered over a casing and lifted it toward the light. His hands trembled with panic as his eyes glimpsed small deviations from his design specifications. He abruptly rose and left the group, upset.

Ive held an aluminum sheet above his head and rolled it beneath the overhead lights, showing Forlenza how the reflection revealed almost imperceptible blemishes. He wanted them eliminated. Forlenza explained the problem to the supplier, and when the group returned two weeks later to review the part again, the blemishes were gone.

Ive ratcheted up scrutiny of the supply chain as Apple’s product line expanded. When SARS broke out in 2003, the company was preparing to produce its first desktop made of aluminum, the Power Mac G5. The tower computer was the width and height of a paper grocery bag with smooth aluminum sides framed by front and rear panels that featured tiny holes like those in a citrus zester. Ive wanted to be there as it rolled off the assembly line, so he and members of the operations team flew to Hong Kong on some of the first post-SARS flights. They then headed to Shenzhen, where Ive spent the next forty days sleeping in the factory dormitory and walking the manufacturing floor. He could be intense as he surveyed an assembly line. During the assembly process, he would grab colleagues and point at a factory worker who was crudely handling parts.

“I don’t want him touching our products,” he would say. “Look at how’s he’s touching the side of it!”

Before being appointed to succeed Jeff Bezos and lead Amazon, Andy Jassy was the CEO of AWS, which he helped build from the ground up, and involved in every aspect of the division. He reviewed every press release and had input in branding decisions. He personally spent time picking artists for an AWS event in 2012 as well as took weeks to settle on the name Redshift for the new data analytics product. When there was a major outage at an AWS data center in Virginia, Andy personally got involved to figure out the problem. As it turned out, it was a fluke. While checking in a generator, a technician shut the door and accidentally turned off the generator. To keep employees to a standard that he subscribes to, Andy regularly holds meetings to pick teams, at random, to give a presentation on their business and fires pointed questions. Unprepared teams will be called out.

Toto Wolff is a team principal managing the Formula 1 Mercedes team. Under Toto’s leadership, Mercedes won 8 consecutive constructor titles and 7 driver championships between 2014 and 2021, establishing the dominance unrivaled in a sport as tough as Formula 1. In addition to many great leadership traits, Toto is also a stickler for the smallest of details. On his first trip to the Mercedes team’s headquarters in Brackley, England, Toto noticed a crumpled newspapers and two old paper coffee cups on a table in the lobby. After his meeting with the previous team principal, whom he replaced, Toto brought up his observation and said that it was below the standard of an F1 team to have a lobby like that. In another instance, Toto was upset about how dirty the bathroom in Mercedes’s hospitality area was the first team he visited. He hired a full-time hygiene manager, physically showed the manager how he wanted the bathroom cleaned and ordered the manager to keep the bathroom spotless after every guest on a race weekend.

F1 is a sport of details. Every race, drivers and their engineers analyze telemetry data like below to find out which MINI sectors and corners they lost lap time. Every thousandth of a second can determine a race’s pole and often a race win. Lewis Hamilton, the 7-time world champion, noticed others drivers were wearing fewer cables and as a result having an advantage of probably a few grams. He relayed that feedback to his team so that they could look into doing the same. Back when Lewis was still teammate with Nico Rosberg, Mercedes changed their drivers’ gloves and the way they were sewn so that they could get better race starts.

Source: Reddit

Weekly reading – 24th September 2022

Business

The small town that saved its only grocery store — by buying it. A fascinating look into grocery stores in rural areas and the monumental challenges that these stores have to face.

Why Toyota – the world’s largest automaker – isn’t all-in on electric vehicles. In my opinion, given the lack of infrastructure and adoption of electric vehicles at the moment, prudence by Toyota totally makes sense. Their conservative stance doesn’t necessarily mean that they won’t invest when the right time comes. Of course, Toyota’s bet could put them on the back foot, but who is to say that aggressive investments by Toyota’s competitors are without risks and totally justified? Some other manufacturers vowed to have all EVs in 10 years, but these vows aren’t binding in any sense. As a result, what matters to shareholders is what is best for the business, not meaningless promises. If being prudent benefits shareholders, Toyota’s management should stick to their guns.

Siting bank branches. An interesting post on bank branches. To be honest, as someone who works in the banking industry, I learned something new.

($) Professor Behind $12 Billion Empire Fuels China’s Tech Rise. “Li was among the first Chinese to study in the US before returning to teach in Hong Kong’s pre-eminent technology university. From there, he’s groomed a generation of entrepreneurs and set up an incubation academy, funding or nurturing promising players in robotics and artificial intelligence valued at almost $12 billion.

Made on YouTube: supporting the next wave of creative entrepreneurs. YouTube attracts digital creators with new initiatives, including a revenue-share scheme and more access to a music catalog to create long-form videos.

dunnhumby Retailer Preference Index: Special Inflation Edition 2022. This RPI score measures how well retailers meet consumer needs and strengthen the emotional bond with shoppers. My favorite place to shop, Aldi, is the 2nd best retailer (I wrote about Aldi before), while Trader’s Joe and Lidl follow closely behind. If I were among the executives at Walmart, I would not be pleased when reading this report. Walmart prides itself at a low price retailer, but it came in at 16th and 17th place in this ranking. It’s worth noting that the bond forged during a difficult time like right now should last for a long time.

($) The Sneaky Genius of Apple’s AirPods Empire. “Apple doesn’t disclose sales of its headphones—its quarterly filings lump AirPods in with its watches, home speakers, and other accessories—but outside analysts say it sold 120 million or so pairs in 2021. IDC and Bloomberg Intelligence estimates suggest that AirPods account for roughly half of sales of what Apple calls “Wearables, Home and Accessories,” its fastest- growing line of business. From 2016 to 2021, sales in this category rose by 245%, to $38 billion. Piper Sandler Cos., the investment bank, estimates that 3 in 4 US teens own AirPods. Apple has set the standard for wireless headphones and turned a free pack-in accessory into a $200 must-buy. Of course, AirPods aren’t really a standalone product. They’re an extension of Cook’s larger project: a mutually dependent ecosystem of hardware, software, and services that keeps customers spending more all the time“.

Other stuff I found interesting

Guide to F1. A cool website that will ease beginners into the world of F1 with an overview of the sport’s history, cheat sheet and explanations on key terminologies.

We Spoke With the Last Person Standing in the Floppy Disk Business. The world is such a fascination because of people like him.

I enjoy John Gruber’s writing, especially when it comes to Apple. His latest review on iPhone 14 and iPhone 14 Pro is masterful.

How Europe Stumbled Into an Energy Catastrophe. “They’re burning coal like they never have in Germany. So — climate what? I mean, does Germany actually care about climate change? If it cared about climate change, I guess Germans would all shiver instead of burning coal. Climate change is going to happen over multiple decades in a century. The war is here. The war is before us. There’s no such thing as the unicorn buffet where we have no trade-offs and every decision is a good one. It’s unthinkable that Germany would still be debating whether they should keep the nuclear power plants on. It’s unthinkable that Germany would be debating whether or not to go turn back on the ones they just turned off. And we keep saying, How much pain do you need to suffer before you reacquaint yourself with reality?

Stats

U.S. retail sales expected to grow 7.1%* this holiday season

Transactions on Zelle exceeded the 5-billion mark

Visa Tap-to-Pay Hits 1 Billion Transit Transactions

Amazon Prime averaged 13 million viewers for its debut live stream of “Thursday Night Football,” 

Source: Bloomberg

Breakdown of Formula One, a fascinating business

Patrick O’Shaughnessy released a wonderful podcast episode on Formula One as a business. If you are not familiar with the sport, Formula One is the pinnacle of motorsports. It features more than 20 races in a calendar year around the world with 10 teams, some of which are iconic brands such as Ferrari, Mercedes, Aston Martin, McClaren or Renault, and, arguably, 20 best drivers that we have to offer. Teams compete for driver and constructor championships. The higher a constructor finishes in the standing at the end of the season, the more money it receives. The more successful a driver is, the higher salary he can demand. The likes of Alonso, Vettel, Verstappen and Hamilton earn between 10 – 40 million dollars a year. These cars can easily hit 180mph on the straights and take corners at a speed that normal cars have on a highway. This is a sport that uniquely combines entertainment, legacy, world-class engineering, science, data analysis, drama and strategy.

I have been a fan of Formula One half of my life. While I am pretty familiar with the sport, I still get to learn about the business from this podcast episode. If you want to know about the sport itself or if you are looking to learn about the business, have a listen. It’s definitely worth the time. Here are some of my notes:

Even though Formula One has a big global fanbase, it is still somewhat under-monetized, compared to other sports

There are 400 million or so unique fans globally. And just to give you a comparison point there, the NFL might have more like a hundred million. And even the Premier League is probably closer to 300 million. And the Premier League is truly a global sport in some ways, even though the avid fans are more regional and local. And so there’s just a huge fan base here. And the fans are really, almost all of them, tend to be avid because it’s such a technical sport. Now the Drive to Survive series on Netflix has changed that a little bit with a little bit more of the casual fan coming in, which is why there’s probably an opportunity to grow that 400 million number even further. But it is one of the largest, if not the largest league in the world by the fan base, depending on what metric you use.

Just to step back and stay at the macro level, for a second, we talked about $2 billion of revenue, more or less, and 400 million fans. So if you want to think about it, that’s about $5 of monetization per unique fan. In the NFL, we talked about 16 billion with about a hundred million fans. So that’s over $150 per unique fan. The premier league does 6 billion in revenues with 300 million, that’s $20 per unique fan. So without getting into the specifics for a second, if you just step back and say, what’s the opportunity to monetize, it’s there. It’s just, it’s there. Right? So now the question is, how do you go execute that?

Breakdown of revenue: 33% from promoter fees, 33% from broadcast, 15% from sponsorship & advertising and the rest from paddock club

Absolutely. There are three main primary drivers of revenue. The first is race or promoter fees. Those are essentially the fees that a local partner pays Formula One to host a race. Formula One isn’t actually putting on the race itself. It charges a fee to a local partner, who then hosts the race, sets up the race track, sets up all the entertainment around the race. And that’s just under a third of revenues today.

The second bucket is broadcast revenues, obviously just transmission of the broadcast, rights at the sport, across the world to different broadcast partners. That’s just a touch over a third of revenues. And then finally there’s sponsorship and advertising today. That’s about 15% of revenues. Though, I would say that’s probably where there’s the most opportunity for growth versus the other two.

There’s a final bucket, let’s call it, which is, other. That’s about 15% of revenues as well. The primary driver there is paddock club revenues. So paddock club is essentially the VIP section at a race and the league, Formula One has the right to sell tickets to that and to host the VIP section in a handful of races. And so that’s kind of the biggest driver. There are other drivers. Formula One’s involved with Formula Two and Formula Three racing, kind of the minor leagues, if you will, and generate some revenue from there. There is some revenue tied to transporting the team’s cars around. There’s a fleet of 747s that basically help this circus go from one spot to the other around the world. But those are all lower margins if you will than the primary three. So even though it might be 15% in that final bucket of revenue, it’s a smaller portion of profits. And so I would really think of the big three that we just talked about as the primary drivers of the business.

Promoters can pay more than $30 million for a race, but those who pay the highest fees tend to generate the most revenue and profits. Vietnam GP was cancelled twice because of Covid. I wonder how much we paid the sport to host the race

If you want to think about the way that revenue works, is, as you said, the promoter will usually agree to pay a fee to Formula One. That fee can be anywhere from near zero, which is what a Monaco is given the historic importance and historic relationship that city, it’s not even a race track, has had with the sport. Typically, you’ll have a group of what they call core races in Western Europe that might pay more like a 10 to 20 million fee depending on the race. And again, these are individually negotiated. They are not publicized, so they’re not readily available. Nobody likes to talk about them. And then finally, you have flyaway races. These are races and kind of the emerging world where usually the promoter or the government has an interest in trying to use the F1 name to bring tourism or to bring some of that VIP pizazz, if you will, to the local market where you’ll see 30 million-plus race fees.

And there’s been a big debate about whether or not fees that are paid are sustainable. In other words, do the promoters get to generate a return on that. It’s very expensive to put on a race like this. The FIA requirements for a Formula One race track are very high. You can imagine if you have a car going at the speeds these things are going at, potholes are not okay. And so things just have to be exacting standards. That said, I think there is good evidence that it’s funny, the relationship to the profitability of a race versus the fee to a race is not direct. So some of the more profitable races also happened to be the highest fee races. It’s really increasingly become evident that it’s how well someone does at monetizing the race itself. How good a job do you do, creating demand for the sport? How much of a show do you put on? Do you have concerts? Tier one musical acts? Do you bring in different famous people to kind of try to draw more attention to it? Do you start tiering your offering so that there’s something even beyond the paddock club, VIP club that you can charge even more for? And the best promoters are very good at doing that and can pay high fees and yet also generate a profit. And some of the promoters have a harder time doing it.

Formula One has a few costs it bears, mainly around creating the broadcast, which then it resells to its broadcast sponsors. But in terms of actually putting on the race, all of the costs associated with that are with the promoter. And then the primary revenue is ticketing. As you said, sometimes it doesn’t include VIP because the squeak has kept it, in some agreements, it does. And then like you said, Austin does a very good job. For example, they’ll have a, usually a headline musical act associated with it. If you buy a higher-tier ticket, you can get access to that act. And so they can create some monetization that way.

Formula One from the perspective of an OEM

…There are two OEMs and an FMCG consumer business, they really view this in a holistic way with their core businesses, in terms of brand building and advertising. Mercedes has come out and said, they think there’s $1 billion of advertising equivalent value to being a part of Formula One. Ferrari talks about it in their public filings, about how Formula One is a key competitive advantage for the brand and strategic folks for the brand. For Ferrari, I mean their primary marketing budget is F1. That’s how they market the business. If you go to a race, they have their own club. All the Ferrari owners in the local market come to those races and are hosted there. It’s a huge part of that brand, its history, and its success.

And Mercedes similarly, and Red Bull, a little bit different, not so much an OEM, but essentially that whole idea of an extreme sport and 200 miles per hour plus cars are pulling multiple Gs, it certainly fits that bucket. McLaren is a little bit different. McLaren is essentially a racing team. They’ve now created an OEM out of that. McLaren started as a racing team and that was kind of their singular focus, and they and Renault, which obviously is another OEM, certainly see value in terms of the brand. Now they’re both OEMs where the racing team, in McLaren’s case, was the primary driver. And in Renault’s case, they, like Ferrari and like Mercedes, see value for the brand in being part of the sport. And they’ve been able to spend more as a result and kind of, not quite as much as the largest teams historically, but enough to be competitive year in and year out.

My thoughts

Formula One is in a unique position because there is nothing else like it in the world and Liberty Media has a complete monopoly over the commercial side. Yes, there are many sports that, like Formula One, love to attract eyeballs and money from viewers, but it is not a zero sum game in this case. People can pay and spend time to watch Premier League and Formula One at the same time. In some situations, you pay for a TV subscription and can watch multiple sports, including Formula One. Even with that unique advantage, the monetization of the sport, in comparison with that of others, shows that there is a lot of value to unlock. There are countries where Formula One presence and popularity leave much to be desired. Take America, for example. It’s arguably the biggest media market in the world. Haas team is owned by an American and the country is going to host two races soon. Yet, not a lot of people in this country understand Formula One, let alone coughing up some money to watch it.

The question now is how Liberty Media can make the sport more understandable and accessible. On the surface, Formula One looks to be simple and even boring. 20 cars complete the same track layout multiple times in 2 hours to determine the standing. Mercedes has won the last 7 driver and constructor championships in a row. What else is there to watch for, right? But the beauty of the sport lies in the intricacy and complexity that are not often understood. How does a shift of a couple of degrees on the track surface change the competitiveness of the cars drastically? Why does a team opt for a two-stop strategy while its rival goes for one stop only? Why are some cars fast on soft tires and others on harder tires? How can drivers find more lap time?

Unfortunately, these details are often glossed over and not explained well on TV to average viewers, myself included. If viewers don’t fully grasp the beautiful complexity of the sport, they won’t fully get the appeal of Formula One. When they don’t get the appeal of Formula One, that effect will cascade down into the commercial side, particularly the promoters, broadcasters & teams. But if Liberty Media can bring the sport closer to viewers, fans will engage and pay more. Then, promoters are more willing to pay to host races as there is always a limit on how many races can take place every year. Broadcasters will also put up more money to earn the rights to broadcast races. This influx of money will directly benefit teams which, in turn, will be more committed to making the spectacle more spectacular.

On this note, I have been very pleased with what Chase and Liberty Media have done so far. The series Drive To Survive on Netflix has been a hit and a great user acquisition tool. There has been a lot of interest on Twitter in Formula One out of the series. According to Sportpromedia, “a recent study published by Nielsen even cited the docuseries as a key reason for the sport’s increasing popularity among those aged between 16 and 35, who accounted for 77 per cent of Formula One’s audience growth in 2020.” It really is a nice place to start if you want to learn about Formula One.

In addition, Liberty Media has created some great content on YouTube that helps average viewers understand more the technicality embedded in the sport. Take this one as an example. This is how drivers and their engineers can use data to identify where on a track they lose time and what correction actions they can take. It’s hard enough to correct how you approach a corner with a normal vehicle. These guys have to do it at an insane speed. Or this video which helps explain in layman’s terms some of the common phrases used in Formula One such as oversteer, understeer, apex…Understanding these terms will enable viewers to get why some teams and drivers struggle with their pace than others.

In short, I am really glad that the sport I love is getting more recognition and interest that I think it deserves. Liberty Media has done a great job so far with the marketing and some important behind-the-scenes issues such as Concorde Agreement that can ensure the sustainability of Formula One. I really look forward to two things: a Grand Prix in my homeland and discussing Formula One with more people here in the U.S.

Weekly reading – 24th April 2021

What I wrote last week

On Apple’s new product: AirTag

Apple TV+, Netflix and the battle between Walmart and Amazon

Business

Google used ‘double-Irish’ to shift $75.4bn in profits out of Ireland. It’s good to know that 2020 was the last year that the “double Irish” loophole could still be exploited. I am curious to see the impact that the phase-out has on US corporations.

WSJ’s short profile of Korea’s “King of Ramen”

AirTag location trackers are smart, capable and very Apple

The Future of Apple Podcasts

Etsy SEO: How to Optimize Your Shop & Listings for Search

How Netflix and social media helped F1 buck a global sports sponsorship slump. F1 is an extraordinary sport and deserves to be the pinnacle of motorsports around the world. If you look below this entry, you’ll see a graphic showing how F1 cars can go into corners at a speed that we travel on a highway. On the straights, F1 cars can hit 360kmh. The technology that goes into building these cars and the skills that go into driving them are the best in the world. Yet, I still feel that F1 isn’t as popular as it should be. “Drive to Survive” and the resilience shown during 2020 really helped the sport become better known

What I find interesting

Typography at U7 station in Berlin

You can pay at Whole Foods Market with your palm now. While it is incredibly cool and convenient, I don’t think I will jump at the chance to use it soon. Amazon isn’t really known for their privacy practices. I am not too willing to give away my biometrics to them yet.

F1 cars can slow down by 144kmh in 1 or 2 seconds and carry over 150kmh into corners. Just think about that for a second. These cars drive into cars at the speed that is often the top you can reach on the highway

Source: F1

Stats that may interest you

Morning Brew has 3 million subscribers. It’s amazing what you can do with great writing skills and consistency

iPhone 12 models accounted for 61% of US iPhone sales in fiscal Q2 2021

Weekly reading – 3rd April 2021

What I wrote last week

Handling a lot of data isn’t easy

Business

A drive to survive: How Liberty Media used Netflix and esports to win a new generation of fans and safeguard the future of Formula 1

Apple Watch can function as a reliable indicator of cardiovascular activities

The a16z Marketplace 100: 2021

Credit Suisse’s research on Stripe

Credit Suisse’s research on Payments, Processors and Fintechs

How Vietnam can reimagine tourism

What I found interesting

The Ancient Method That Keeps Afghanistan’s Grapes Fresh All Winter

Who owns the Nile? Another geopolitical conflict that will take years to resolve, if we can even do so.

Stats you may find interesting

A survey by Brickmeetsclick shows that online grocery hit $8 billion in February 2021, down from $9.3 billion in January 2021

Meat sales in the US increased by 20% in 2020, compared to 2019

88% of Berkshire Hathaway Energy’s investment in Property, Plant & Equipment in 2020 was in renewables

Berkshire Hathaway Energy's PP&E in 2020

Berkshire Hathaway Energy’s renewables output made up 34% of its total production in 2020, compared to 12% in 2006

Berkshire Hathaway Energy's Renewables Output

Weekly readings – 22nd February 2020

The Merits of Bottoms Up Investing

I admit that I was initially fond of Lambda, but there has been growing coverage of the challenges that the startup faces and of what the company really is about. Here is one of the most damning articles: THE HIGH COST OF A FREE CODING BOOTCAMP

The Ride-Hail Utopia That Got Stuck in Traffic

Student debt in the US reached $1.6 trillion, yet graduates are having the hardest time ever to find employment

Unemployment among Americans aged between 22 and 27 who recently earned a Bachelor’s degree or higher was 3.9% in December — about 0.3 percentage point above the rate for all workers.

Source: Bloomberg

What Can the Stock Market Tell Us About the T-Mobile/Sprint Merger?

In light of the Coronavirus, here is how WHO advises us to wear a mask

Masayoshi Son and SoftBank struck again, this time with Oyo. Given the magnitude of capital involved, it’s incredulous to read this kind of shocking articles.

There were missteps at Oyo from the start. The Japan hotel team, led by a transplant from India named Prasun Choudhary, figured they could get to as many as 75,000 rooms in the first year, which would put them ahead of the Apa Hotels chain in the No. 1 spot. But they took as their starting point an inflated addressable market of 1.6 million rooms based on numbers from the local tourism authority: They included campgrounds, bed-and-breakfasts and pay-by-the-hour love hotels, which weren’t part of Oyo’s business plan, according to people involved at the time.

Oyo Life, the apartment rentals business led by another Indian lieutenant called Kavikrut (who like many Indians goes by one name), set the goal of 1 million rooms in part because it was a stunning, round number that would exceed the capacity of the Japan market leader, the people said. That was the target that caught Son’s attention in March.

The unpredictable economics of pawn shops

An interesting report by PwC on the consumer preference in the streaming battle

An interesting read on a software startup that helps coffee farmers

How Saudi Arabia Infiltrated Twitter

a16z compiled a report on Top 100 Marketplace startups

What is the proper way to drink whisky?

How to write usefully

An amazing piece of innovation from F1 Mercedes team that is an immensely ominous sign for their rivals

Do host countries really benefit from F1 races?

Vietnam is going to hose our first ever F1 race in April 2020. It will be a historic moment for my home country since as far as I can remember, we never have an international sporting event. As an F1 fanatic, I am excited about my fellow Vietnamese getting to know the sport I love. However, do host countries usually benefit from hosting an F1 event? Let’s take a look at a few cases

The bull case

In 2017, Singapore Tourism Board announced its plan to retain the race through 2021. STB outlined its rational below:

The announcement comes against the background of a year-to-date 19% increase in ticket sales, with the weekend sales still to be included. In its first decade, the race has yielded significant economic benefits, attracting over 450,000 international visitors to Singapore and about S$1.4 billion in tourism receipts[1]. With more than 90% of the race organisation sub-contracted annually to Singapore-based companies, the race also contributes to the local economy, over and above the tourism outcomes. This event has also showcased Singapore as a beautiful, vibrant and attractive destination to over 780 million international broadcast viewers.

Source: Singapore Tourism Board

If you watch F1 often enough like I do, drivers love to come to Singapore and it’s one of the most anticipated races on the calendar. In 2018, the race attracted the second biggest crowd, only behind the inaugural race in 2008. Hence, it is safe to say that Singapore benefits from having an F1 race.

Bahrain became the first country in the Middle East to host an F1 race in 2004. Since then, it has become one of the favorite tracks of drivers and fans. According to an E&Y audit report in 2015, the race generated a net gain of $95 million for the country and added multiple jobs directly. It was also reported that the race ignited some aspects of the country’s economy. As a result, Bahrain is a beneficiary of F1’s draw.

I didn’t know much about Azerbaijan or its capital Baku until 2016 when it first joined the F1 calendar. Since then, Baku has been responsible for some of the most exciting races. In 2018, a PwC report claimed that “more than $270 million has been added to the local economy as a result of the race, $164 million of which is “direct spend” or money spent by visitors and participants”. the 2018 race attracted 94,000 attendees and was watched by millions of viewers around the world.

The bear case

  • Indian GP ran only for three years and was discontinued after 2013 due to the lack of attendance
  • Korean GP was cancelled after three years as well after failing to generate interest and money
  • Malaysian GP was stopped after almost 20 years of hosting a race since the “numbers don’t add up any more”

It is telling that two new Asian races were discontinued after 3 years due to financial infeasibility. Whether Vietnam will follow the footsteps of Singapore or become another example of the bear case category above remains to be seen. A lot will depend on the execution and whether the races will be good. For the sake of my country, I hope that we will strive to emulate the success that Singapore has had.

Future looks bleak for Sebastian Vettel

Sebastian Vettel is a 4-time Formula 1 champion. He is the first ballot hall of fame in the future with his trophy cabinet and the record of the youngest pole sitter ever. He has been the lead driver in Ferrari since 2015, and up to, possibly, today. In the Italian Grand Prix today, Vettel started fourth behind the Mercedes drivers and his much younger and less experienced teammate Charles Leclerc. Instead of fighting in the top, he spun, came back to the track dangerously, hit Lance Stroll and received a 10-second stop and go penalty, the most severe punishment behind only disqualification. His race was over at the point. Luckily for Ferrari and all the Tifosis, Charles Leclerc withstood the assaults from the Silver Arrows to win the race, first for Ferrari since 2010. As a result, Leclerc has now beaten Vettel in qualifying 7 races in a row, leapfrogged the German in the driver standing and been responsible for Ferrari’s two wins this season. The changing of the guards seems completed.

What went wrong for the 4-time champion? Every problem and mistake he has made for the past months looks to stem from his disastrous race in Germany last year. He was cruising to the win, but crashed out of the race on his own. Since then, he hasn’t been himself. Mistake after mistake and after each one, the pressure kept piling on. There is an argument that Vettel can’t cope with hungrier and younger teammates. At Red Bull, he was thoroughly beaten y Ricciardo. Now, Charles Leclerc has gotten the better of him. The pressure to win at Ferrari is incredible. His failure to win a world title with the Reds isn’t completely his fault. The team failed to give him a competitive car all year long. But his mistakes recently have been nobody’s but his and his alone.

Ferrari repeatedly said he would still race for the Red team next year and I am confident that is the case. Nonetheless, what if next year will be even worse since Leclerc will likely be more settled at Ferrari. He won’t secure a drive at Mercedes. Nor will he at Red Bull now that Max is the team leader and Red Bull is known for promoting drivers internally. Where would he go? Rumors of retirement have been circulating around the paddock and I would hate to see him retire at 33. He has still much to offer. But I think Ferrari should take him off the grid for the remainder of 2019 and install a young driver next to Charles. Doing so will give Vettel time to collect himself and get ready for next year as well as test a potential option in case the German walks after 2020. If a break can’t get him back to his formidable old self, I doubt leaving him on track for the rest of the season will do him any better.

Nonetheless, I wish for his sake and the team’s (I have been a Ferrari fan since 2005 and the last 10 years has been rough) that Vettel would find his way back to the top of the echelon of F1 soon.

If you are intellectually curious, these facts about Formula 1 will intrigue you

I am a Formula 1 fanatic. The sport is unpredictable, exciting and intellectually intriguing. Everything about the drivers and the cars is about maximizing every last drop of performance and gaining even one hundredth or one tenth of a second. The level of attention to details and state-of-the-art technologies that go to every aspect of the sport is astonishing. Here are a few clips that I found very helpful in understanding the sport. Even if you are not interested in the racing, I think it’s interesting when you are just curious about how stuff works

Car setup

A car setup is instrumental to the performance of the car. It’s more of an art and trial-error than science and there are a lot that go into the setup such as the nature of the tracks, driver preference, strengths & weaknesses of the cars, weather, tyre…The video below explains how one millimeter can mean the world in a car setup!

Braking System

Brakes are crucial in racing, even in commuter cars. As F1 cars travel at such a high speed and brake multiple times in one lap, brakes can get hot and fail, causing drivers to crash and fall out of races. The video below from Mercedes explains how brakes work and how setting up brake systems in certain races can be an engineering nightmare. For instance, Monaco Grand Prix is a twisty street track where speed is low and brakes are applied almost constantly. After every corner, brakes get increasingly hot. Cooling down brakes is a challenge as they are usually cooled when drivers accelerate in straights; which is, as mentioned, not what happens in Monaco.

In Baku Grand Prix, the challenge is different. Half of the track is made of long straights and the other half is a street circuit. At the end of long straights, brakes are cold and drivers run the risk of not having the best performance from brakes for the twisty part. Then, during the twisty part, there is not enough cooling for the brakes.

Logistics

A F1 calendar consists of around 21 races a year, spanning across the globe over a period of 9 months. Teams have to manage car parts, communication equipment, hospitality settings, fuel, kitchen, etc… Managing the logistics of a race, especially back-to-back races in different countries miles away from each other is a daunting challenge. This video explains very well this aspect of Formula 1

Steering wheel

Do you think you can remember how all the buttons work and make them work while driving at 180mph?

British GP – Some of The Best of F1

I have a love-hate relationship with F1. Normally, I am a crazy fan of the sport that is unpredictable, exciting, glamorous and sophisticated. To win a race, let alone a long season, a team/driver needs a perfect weekend, starting from preparation, practice to qualifying and the real race. Factors that play a significant role in a race include tires, strategy, luck, weather, drivers, pit crews and circuits. Nonetheless, F1 tends to be dominated by one or two teams before regulation changes. In the past, it was Ferrari with Schumacher, followed by McClaren, Red Bull and Mercedes. Some races are incredibly boring as there is no overtaking (I am talking about you street circuits and Australian GP)

The very last Grand Prix in UK featured some of the best F1 has to offer. The fastest pit stop ever is 1.91 seconds. In that insanely short amount of time, the pit crew lifted the car up, removed the old wheels, fitted in the new ones, lowered the car down, signaled to the driver and got out of the way. The muscle memory and the collaboration are unreal. Pit crew work can play a tremendous factor in a team’s success as you will see later on, but first enjoy the world’s record pit stop

The next highlight is the battle between two great young stars Charles LeClerc and Max Verstappen. Both of them are 21 years old or younger. The battle was enthralling and showed the talent two young men possessed. It’s incredible they fought at 180mph with the masterful control and techniques