Tag: Google

Weekly readings

Weekly reading – 18th March 2023

by MQDuongLeave a Comment on Weekly reading – 18th March 2023

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

There are 3 million households in America that are still renters despite earning $150,000 or more in annual income

Total value of venture capital deals fell by 38% globally in 2022

The number of US women who died during pregnancy or shortly after child delivery increased by 40% in 2021

Weekly readings

Weekly reading – 11th March 2023

by MQDuongLeave a Comment on Weekly reading – 11th March 2023

What I wrote last week

Book review: Twelve years of turbulence

Business

Google execs tell employees in testy all-hands meeting that Bard A.I. isn’t just about search. Leadership is about providing vision and belief. If you are paid to think of big pictures, instead of doing the dirty work every day, wouldn’t it be disappointing to provide ambiguity and inconsistent answers to a high-profile product like Bard? I get that it’s difficult to know what to do with an experiment like Bard. But a rushed announcement, followed by ambiguity and a botched demo, erodes trust in the leadership of Google.

Buffett ❤️ Apple: Case Study. I often see folks go out of their ways to be contrarian and find whatever reasons they can to justify buying other stocks than Apple. But as Buffett said: you get paid to be right, why wouldn’t anyone consider Apple as an investment? I am not saying that it’s THE best investment choice out there as any given time. I am saying that Apple and the boring index fund are a lot better than many stocks out there.

($) How Chili’s Is Prepping for Tough Times, Starting With the Fries. The article offered a couple of good examples on what CEOs can do to increase productivity and save costs. Chili’s CEO considered the practice of counting shrimps a time-waster. By ending that practice, the company estimated cost savings at $6 million a year. The changes made at Chili’s restaurants aren’t popular with everybody, proven by comments cited in the article. However, the stock price rebounded handsomely this year and same-store sales increased despite declining traffic. At least there is that.

Amazon’s big dreams for Alexa fall short. Alexa is an interesting innovation in that it enabled the birth of many smart devices; which offers value to consumers (I am one of those), while lacking a way to monetize its value. Amazon has not been able to prove that Alex is additive to sales on its platform and I am not surprised. How many shoppers call Alexa when they want to discover something? If it’s a routine purchase, there is already Subscribe and Save. I don’t believe that Amazon staff lacks the effort to prove Alexa’s worth. I do believe that they couldn’t find it because there likely isn’t any

Business Breakdowns on Wise. A really interesting Business Breakdowns episode on Wise. Wise is my go-to platform whenever I want to send money back home to Vietnam. There are two factors that affect the net amount that my family receives: exchange rates and platform fees. Accounting for these factors, Wise usually beats other alternatives such as Xoom or Western Union. Hence, it’s really fascinating to learn about Wise’s origin, how it works in general and what competitive advantages the company enjoys

Other stuff I find interesting

($) The Surprising Ways Walking Delivers a High-Intensity Workout. “Walking with more intensity can burn as many calories as higher-impact activities such as running or even HIIT classes, experts say. That could mean incorporating weights, hills, intervals or a faster pace without breaking into a jog. Taking an 11-minute brisk walk daily will also lower your risk of stroke, heart disease and a number of cancers, according to a study from the University of Cambridge published in February.”

This website collects many dark patterns on the Web

The tech workers exiled from Europe’s last dictatorship. It’s always disturbing to learn about a dictator suppressing citizens’ wishes. It’s equally sad that some good folks have their lives turned upside down and must live away from their family & friends, just because they have the courage to do something.

In Scramble for Clean Energy, Europe Is Turning to North Africa. “Solar panels in sun-rich North Africa generate up to three times more energy than in Europe. And North Africa has a lot more room for them than densely populated Europe. Result: Europe’s drive to end its reliance on Russian natural gas supplies, triggered by the Ukraine conflict, is resulting in a rush to install giant solar energy farms and lay underwater cables to tap into North Africa’s abundant renewable energy.“

A lack of water leaves Vietnam’s coffee farmers high and dry. Another example of unsustainable growth.

Stats

Uber CEO revealed at Morgan Stanley Technology, Media & Telecom Conference that New York makes up 2% of its global delivery bookings

2.1 million people visited Kentucky Bourbon Trail in 2022

U.S. solar and storage manufacturing jobs expected to grow to 115,000 by 2030

Weekly readings

Weekly reading – 18th February 2023

by MQDuongLeave a Comment on Weekly reading – 18th February 2023

What I wrote last week

Updates on Uber

Business

Exploring ALDI’s Unlimited Success With Limited Assortments. If I could buy shares of a privately held company, that’d be Aldi. I wrote about Aldi here

($) Louis Vuitton’s Formula for World Domination. “Even as it took steps to broaden its appeal, the brand put in place measures to manage the risks associated with becoming too widespread and easy to get. Its number of stores has changed little over the past 10 years, closing some as it opens others. Vuitton doesn’t sell through wholesalers and it doesn’t license its designs. There are no end-of-season sales. Its perfume production is limited to small batches, available only at Louis Vuitton retailers and on the brand’s website. Its fragrances aren’t available in the LVMH-owned retailer Sephora. Louis Vuitton has also intentionally limited supply to retain a sense of exclusivity. The brand makes small production runs for products in each collection. The idea is to always make slightly less than demand.“

How Spotify’s podcast bet went wrong. Growth at all costs and through M&A is usually not the answer for sustainability.

($) Goldman Sachs Steps Back From Bidding for New Credit Card Programs. The move to scale back consumer credit card ambitions of Goldman Sachs is surprising to me. First, they abandoned plans to have Goldman-Sachs-branded credit cards. Then, they don’t bid for co-branded portfolios. The infrastructure that they built for Apple Card (which I suspect involves a lot of concessions) only makes sense economically if it’s used for many other portfolios. I can understand if the bank is being more conservative now than it used to be, but this type of retreat seems like an over-correction at best or at worst the beginning of the end for consumer banking ambition.

Inside Flipkart, the Indian giant beating Amazon. “Krishnamurthy had a simple approach for the sale: Go all-in on smartphones. The company offered customers interest-free loans and Krishnamurthy personally visited the offices of phone brands to make exclusive sales deals. One Flipkart executive who worked with him at the time recalled him pleading with a phone manufacturer, “Give me a chance.” His strategy worked. In terms of gross merchandise value (GMV) — the total value of goods sold — Flipkart achieved a 50% market share during the sale, compared to Amazon’s 32%, according to market research firm RedSeer. Amazon was rattled. One former executive in Amazon’s payments unit told Rest of World that within the company, some leaders still regard this period as a missed opportunity to kill off Flipkart.”

Other stuff I find interesting

($) For Remote Workers, These U.S. Cities Are Great Places to Live. I am more of an office or hybrid guy myself as I believe in the value of separating work from home as well as human interaction in an office. But if remote working is your thing, this list can be valuable. I’d throw the city of Omaha to the mix as well.

Milled is a great tool to search for email newsletters by brands

The maze is in the mouse. While there are some criticisms over parts of the article, the consensus is that it reflects the culture and inner workings at Google. As a result, Google has a big problem at hand. Given the hiring frenzy, the layoff and the botched launch of Bard, one must wonder if Sundar is the right man to help Google fix these problems and once again roar in the future.

Why cash is still king in Iraq. It makes one reflect on how much banking regulations in the US protect consumers and create trust. And how often we tend to take it for granted.

Amsterdam’s airport was brutally honest about its ‘poor’ 2022 performance. How often have you read something this refreshingly honest from a company?

Why African EV startups are struggling. “Two years on, however, industry advocates believe the company’s goals are too ambitious given the high EV prices, unfriendly government policies, lack of charging infrastructure, high customs duties, and bad roads in African countries.”

Stats

Three-in-ten U.S. adults say they have ever used a dating site or app

US Credit card balances reached $986 billion at the end of 2022, a record high

Number of active monthly users of major social media platforms in Europe. Source: Politico
Business

Weekly reading – 11th February 2023

by MQDuongLeave a Comment on Weekly reading – 11th February 2023

What I wrote last week

Apple had the first revenue decline since Q3 2019. Why I am not worried

Amazon is no longer on Day 1

Business

‘iPhones are made in hell’: 3 months inside China’s iPhone city. As an Apple shareholder, I condone the working conditions at the company’s suppliers. With the bargaining power that Apple has, it can make a difference in this area, especially when the tech giant doesn’t seem to waste any opportunity to tout its efforts to improve everyone’s lives.

EV Startup Vinfast to Cut U.S. Jobs Amid Restructuring. VinFast delivered almost 1,000 cars to the US, only for them to be stopped there because of “software updates”. While cars haven’t hit the roads yet, VinFast is reportedly downsizing operations not only in Vietnam, but also in North America. I used to work for the conglomerate. I am not foreign to the way Vingroup does business and everything said in the article sounds awfully familiar

Elon Musk fires a top Twitter engineer over his declining view count. Firing employees on a whim, product management by tweets, low morale, lack of leadership. All the things that one can imagine of terrible management are on full display at Twitter owned by arguably one of the greatest business executives that we have seen. What power and wealth can do to a person.

Google employees criticize CEO Sundar Pichai for ‘rushed, botched’ announcement of GPT competitor Bard. The urge to launch an AI tool quickly is baffling to me. I mean, ChatGPT may be cool and offer some value, but it’s still not commercialized. What good does it go for Google to have a half-baked alternative out? Why didn’t they wait to have a working product? This is not a good look for Sundar and his leadership team. As a CEO, he made a mistake in hiring too many employees too quickly. Now, he botched this product launch. And there is a report out there that the company even got the layoff improperly. These make you wonder what kind of CEO Sundar is.

Disney CEO Bob Iger’s potential willingness to sell Hulu is a reversal in strategy. Given the important of bundles to Disney’s streaming business and the subsequent importance of Hulu to the bundles, I doubt that Disney will sell its stakes in Hulu. This interview is just Bob Iger trying to gain some bargaining power and changing the narrative. As much as I was not a fan of Bob Chapek, he is a smart guy (otherwise he wouldn’t be CEO of Disney) and if he and his team thought buying out Hulu was strategically sound, I don’t see how the rationale changed in only a few months between then and now.

Zelle
Net profit per vehicle by car brand
Source: Visual Capitalist

Other stuff I find interesting

How New Ideas Arise. There are two takeaways from this article for me. The first is that ideas can come anytime from anywhere. How ideas come pretty much varies from one person to another. What works for one person may not work for others. Find what works for you. Second, the only commonality is that ideas are puzzles. The more pieces one has, the more likely one can put together the puzzles. Hence, your personal experience in life and what you read matter!

Visual design rules you can safely follow every time. Even when you are preparing for your term paper or a document to your boss, these tips can come in handy

A guide for Van Life in Japan. I found this post inspiring. As a long-time admirer of Japan, reading this blog makes me want to travel to and explore the country even more.

TikTok’s Secret ‘Heating’ Button Can Make Anyone Go Viral. “According to six current and former employees of TikTok and its parent company, ByteDance, and internal documents and communications reviewed by Forbes. These sources reveal that in addition to letting the algorithm decide what goes viral, staff at TikTok and ByteDance also secretly hand-pick specific videos and supercharge their distribution, using a practice known internally as “heating.” “The heating feature refers to boosting videos into the For You feed through operation intervention to achieve a certain number of video views,” an internal TikTok document titled MINT Heating Playbook explains. “The total video views of heated videos accounts for a large portion of the daily total video views, around 1-2%, which can have a significant impact on overall core metrics.”

Fragrant fungi rewards Himalayan foragers. “For a few weeks each autumn, fine-dining kitchens across Japan are rich with the aroma of the matsutake mushroom. Japan consumes more than 500 tons of the delicacy in that short window, despite prices of up to 70,000 yen a kilogram. Ninety percent of the mushrooms are flown in, and foragers in exporting countries can earn a significant premium over their ordinary incomes. One Himalayan kingdom has been reaping the benefits. Matsutake grow wild at an altitude of 2,900 to 3,100 meters. Like that other prized fungus, the truffle, these mushrooms are hard to cultivate artificially. So foraging begins with a climb up the mountain path.”

Stats

Average price of a new car reached $47,362 in January 2023

Total credit card debt to a record $930.6 billion at the end of 2022

On average, Americans eat more than 9 pounds of Mexican avocados a year

Weekly readings

Weekly reading – 28th January 2023

by MQDuongLeave a Comment on Weekly reading – 28th January 2023

What I wrote last week

Layoffs, accountability and leadership

Book Review: Deep: Freediving, Renegade Science And What The Ocean Tells Us About Ourselves

Business

This letter from Patient Capital on Google is a great primer on the giant tech company. While I agree with the tenet that Search is the cash cow for now and YouTube/Waymo/Cloud offers future growth, I don’t see any coverage on the threats: competition, organizational challenges and regulatory scrutiny

Amazon’s drone delivery unit hit with layoffs just as 10-year-old project finally launches. There is no guarantee that drone delivery program will be a game changer for Amazon. Even that possibility is in jeopardy as Amazon laid off hundreds of employees, including many in Prime Air, which operates the program.

Bad batteries, software glitches: VinFast’s EV drivers say they feel like guinea pigs. Despite grandiose promises, ambitious goals and loud announcements, drivers encountered serious software glitches and faulty batteries with VinFast’s EVs. As a Vietnamese, I am happy to see a national brand take it to the world stage, in an industry that Vietnam has never excelled in. The problem is that the one company that has the vision and resources to do it is not known for sustainable growth. The company tends to throw money at a problem, scaling operations up at a breakneck speed without much regard for details. It stood up resorts touted to be luxurious in less than a year. As you may imagine, such properties are not up to par in terms of quality. It’s not rare to hear complaints about how VinGroup’s residential projects deteriorated only after a few years. That’s why I was not surprised to read about their problems with EVs. I never imagine it easy to sell EVs, but the field is very competitive. What evidence is there to prove that VinGroup has the core competencies to compete and win on a global scale?

How the Spotify layoffs impact its podcasting business. It makes sense that Spotify is trying to make its podcasting business leaner and more efficient. However, there are two concerns that stand out from this article for me. The first is that Spotify replaced the head of content, who has a lot of experience and Hollywood connections, with an operations guy. That doesn’t instill much confidence in a shareholder like myself. The second is that Spotify hasn’t been able to incorporate the tech stacks of all the companies it acquired. That leaves synergies and saved expenses on the table. What’s the holdup?

Meta Embraces AI as Facebook, Instagram Help Drive a Rebound. “Indeed, for all of Meta’s efforts to rebrand itself, the core Facebook “Blue” app remains its workhorse. While outside financial analysts have generally estimated that Instagram accounts for between 40% to 50% of the company’s ad revenue, internal statistics viewed by the Journal show that Instagram generates a little more than 30%—and it isn’t rapidly catching up. Making money on Reels remains an additional hurdle. The video feature’s rapid takeoff created a near-term problem: Because ads in Reels videos don’t currently sell for as much as those sold against regular posts and stories, Reels’ growing share of content consumption was denting ad revenue. To protect the company’s earnings, the company cut back on promoting Reels, which lowered watch time by 12%.”

The oral history of how Priceline acquired Booking.com. Expedia made one of the biggest mistakes in the travel industry’s history by not purchasing Booking.com when they had a chance. In fairness, the business models were quite different, but the price to pay is too high

Other stuff I find interesting

Somebody was kind enough to compile and share a 140-slide deck on France’s tech landscape

Inside CNET’s AI-powered SEO money machine. “Under the two-year-old management of a private equity company called Red Ventures, CNET’s editorial staff has often been left wondering: was this story written by AI or a co-worker? Even today, they’re still not sure. “I don’t lay any blame at CNET’s or its masthead’s feet,” one former staffer says. “This is all due to the machinations of the greater Red Ventures machine, and its desire to squeeze blood from a stone.””

($) Little-Known Surveillance Program Captures Money Transfers Between U.S. and More Than 20 Countries. “Hundreds of federal, state and local U.S. law-enforcement agencies have access without court oversight to a database of more than 150 million money transfers between people in the U.S. and in more than 20 countries, according to internal program documents and an investigation by Sen. Ron Wyden.” I don’t dispute the role of monitoring money transfers overseas in tackling crimes and terrorism. It’s a legitimate purpose. However, it’s very disturbing when every law enforcement agency can gain access to citizens’ sensitive data without a court order. Is data even anonymized? That’s just gross negligence and governmental overreach

Welcome to Hillstone, America’s Favorite Restaurant. “It’s never going to win a James Beard Award. Or try to wow you with its foam experiments or ingredients you’ve never heard of. But it is the best-run, most-loved, relentlessly respected restaurant in America. And, oh yeah, Danny Meyer, David Chang, and Shaq all agree. Welcome to Hillstone.”

Seaweed researchers find bright future for underwater crop. It’s fascinating to learn that seaweed could help reduce carbon emissions and fight climate change.

Stats

Axios’s subscription service, launched in Jan 2022, garnered 3,000 subscribers and $2 million in revenue in the first year

7% of US households used a new streaming service in Q4’22

“Global venture funding reached $415.1B in 2022, marking a 35% drop from a record 2021.”

Source: Twitter

Business

Layoffs, Accountability & Leadership

by MQDuong1 Comment on Layoffs, Accountability & Leadership

What is the most important trait of a leader? While being a great leader requires a lot of qualities, the most important is accountability. I firmly believe that a leader should be the last to reap rewards in the good times and the first to sacrifice in a crisis; which is why I am disappointed with how the recent layoffs went down.

188,386. That’s how many people lost their jobs and had their lives severely impacted between 6/1/2022 and 1/20/2023. Regardless of size and industry, company after company announced their plan to shrink workforce. Even the best of them such as Google, Amazon or Microsoft had to take the drastic measure. The message is crystal clear: cut expenses now and gear up for a brutal environment that is expected to get worse in the coming months.

The current bleak outlook is mind-blowingly in contrast with what happened just a year ago. After the WHO declared Covid a global pandemic, folks expected an economic recession. Markets nosedived in March 2020. People were forced to stay at home. Businesses and personal life disrupted. But there was no recession. Instead, the once-in-a-lifetime pandemic pulled forward years of growth for companies and industries. Stocks repeatedly hit record highs. CEOs were optimistic about the future and thought that the favorable market conditions were here to stay. As a result, companies went on a hiring spree to accommodate the growth prospects.

Until the harsh reality set in. Over the past year, the war in Ukraine, the persistent supply chain issues, the change in consumer behavior, high inflation and rate hikes by the Fed created a volatile and hostile environment for businesses. Suddenly, everything didn’t look as rosy as expected. Growth was hard to come by. The stock market contracted. Companies were left with a bloating operating expense due to over-hiring and hyped optimism. To evolve, they needed to get leaner and more efficient. Hence, tens of thousands of good people lost their livelihood.

To be clear, I don’t blame CEOs for optimistically anticipating a growth run and hiring accordingly. As top executives, they must do what is right for stakeholders. If there were actually an opportunity to grow and they didn’t act to take advantage of it, they wouldn’t do their job properly. I give them the benefit of the doubt that they made the best decision with the information they had at the time. Business is always risky and this time, the dice just didn’t fall the right away for a lot of CEOs.

With that being said, I was a little bit disappointed when I read some of the memos that were shared publicly. I applauded CEOs that were candid enough to say that they were responsible for the decisions that led to the layoffs. Below are a few examples:

On 1/20/2023, Google announced that they were cutting 12,000 jobs:

I have some difficult news to share. We’ve decided to reduce our workforce by approximately 12,000 roles. We’ve already sent a separate email to employees in the US who are affected. In other countries, this process will take longer due to local laws and practices.

This will mean saying goodbye to some incredibly talented people we worked hard to hire and have loved working with. I’m deeply sorry for that. The fact that these changes will impact the lives of Googlers weighs heavily on me, and I take full responsibility for the decisions that led us here.

On 1/4/2023, Salesforce said in a filing that they were going to reduce about 8,000 jobs, or 10% of their workforce:

However, the environment remains challenging and our customers are taking a more measured approach to their purchasing decisions. With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10 percent, mostly over the coming weeks.

I’ve been thinking a lot about how we came to this moment. As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.

Last November, Facebook decided to shrink their workforce by letting go 11,000 employees

Today I’m sharing some of the most difficult changes we’ve made in Meta’s history. I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1.

I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.

In November 2022, DoorDash cut 1,250 jobs:

As with all things, I want to start and discuss the factors in our control that led to today’s announcement and take accountability for this decision. Prior to COVID-19, DoorDash was actually undersized as a company. The pandemic presented sudden and unprecedented opportunities to serve the evolving needs of merchants, consumers and Dashers. We sped up our hiring to catch up with our growth and started many new businesses in response to feedback from our audiences. 

Most of our investments are paying off, and while we’ve always been disciplined in how we have managed our business and operational metrics, we were not as rigorous as we should have been in managing our team growth. That’s on me. As a result, operating expenses grew quickly.

Stripe shrank its team by 14%

Today we’re announcing the hardest change we have had to make at Stripe to date. We’re reducing the size of our team by around 14% and saying goodbye to many talented Stripes in the process. If you are among those impacted, you will receive a notification email within the next 15 minutes. For those of you leaving: we’re very sorry to be taking this step and John and I are fully responsible for the decisions leading up to it.

It’s admirable for a leader to own up to their mistakes and admit that they were wrong. Not every leader does that. Nonetheless, in addition to the nice words, I was expecting a concrete course of action as a token of accountability and a show of togetherness. Yet, I haven’t read a single memo that mentioned a CEO’s pay cut or relinquishment of stock grants, let alone a resignation. It’s unlikely that a CEO forgoing a portion of stock grants or a year of salary will make as big an impact on a company’s financials as laying off hundreds of employees. But the sacrifice will signal to every employee that they have leaders that share their pain and sacrifice.

If that is not good enough as a reason, think about it this way: those employees that were dismissed were unlikely to have much influence on the decisions that led to the layoffs. They just did their job and followed orders. Yet, they were the first to go while the decision makers still stay. What message does that say about a company’s leadership? In the good times, Sundar Pichai, CEO of Alphabet, made $280 million in compensation in 2019, most of which came from stock awards. His base salary in 2022 dropped to $5 million. But at least he is still one of the most powerful CEOs in the world, doesn’t have to worry about making ends meet or immigration status. And his stock grants will vest again in a few years. I cannot say none of that about some of the folks that lost their jobs.

It’s not like what I argued above didn’t happen in reality. Two weeks ago, Tim Cook, CEO of Apple, requested and received a 40% pay cut. While Apple hasn’t announced any layoff yet, mainly because it is more disciplined in hiring than others, the company is not immune to the challenging environment. If they followed others in cutting jobs to please investors and chalk up their financials, nobody would blame them. Yet, the CEO voluntarily asked to have his salary reduced. That’s great leadership.

After the first two heavy losses of the season, Manchester United Manager Erik Ten Hag ordered his players to the training ground on what was supposed to be their day off. He made them run more than 13 miles as punishment for the lack of effort in said heavy defeats. What stunned everyone was that the 52-year-old boss participated in the run. He wanted the players to know that he was responsible for the disappointing results too. That act earned Ten Hag a lot of respect from his players. The team is currently in the top 4 and will likely qualify for Champions League next season. A prospect that few predicted a few months ago. The togetherness and leadership that Ten Hag showed set the foundation for the team’s current results.

We learn a lot about companies and people in good times. But we learn even more in the time of crisis. I definitely have learned a few things from the past 3 years, especially the recent months.

Weekly readings

Weekly reading – 28th May 2022

by MQDuongLeave a Comment on Weekly reading – 28th May 2022

Business

Apple Looks to Boost Production Outside China. It’s good for Apple to at least consider operations in other countries to hedge risks. However, it’s not easy to move out of China completely. The book “After Steve” mentioned an episode in which Apple practically had to beg Foxconn to help stand up an assembly line for Apple Watch (I am not 100% about the product in question) overnight because the other chosen supplier screwed up. Foxconn had the resources to do wonders. Replicating such expertise and capabilities in other countries will be very time-consuming and difficult. Plus, doing business in China certainly helps Apple cultivate a relationship with the government. In such a regime, that’s critical.

Cannes: How Japanese Anime Became the World’s Most Bankable Genre. Japanese Anime has incredible IPs. Streaming introduces viewers to content that they had never seen before. Even in my 30s, I am still following some of the anime franchises that I read as a kid. I’d love to explore more if I had the time. It’s not just for kids. Adults love anime too

It’s TikTok’s World Now. Facebook Just Tries to Make People Care About It. The biggest takeaway I have from this piece is that Facebook seems to have trouble dethroning TikTok more than it did any challengers before. Creators still make money on Instagram, but that doesn’t seem to stop TikTok from growing. Interestingly, Facebook had a chance to buy TikTok years ago, but passed. Now, they must rue that decision every day.

Plant-Based Dairy Reinvigorates Milk Category. I do think the popularity of plant-based dairy results from the fact that consumers are more health-conscious. Have you looked at the difference in calorie per serving between meat-based and plant-based milk?

50 years in: Nike’s game plan for winning with women. For obvious reasons, I don’t know anything about women clothing, but it is interesting to read about Nike’s approach to winning this category. Unless there are specific reasons, I naturally support a simple product portfolio. Consumers don’t get confused. Brands can put more marketing dollars and focus behind each product.

Google Takes Yet Another Run at E-Commerce—and Amazon. A super interesting read on Google’s latest efforts into e-Commerce. Based on the article, this time, Google may be onto something. Consumers start to use Google to search for products more than previously, a territory that used to belong to Amazon. E-commerce was also a leading contributor to the bump in search revenue in 2021. With that being said, 2020 and 2021 were great for e-Commerce, but since the economy opened up and folks went back to stores and office, e-Commerce has seen its growth dampened. Whether this trend will affect Google’s effects in the future remains to be seen

Other stuff I find interesting

The Trouble With Lithium. This grim ripping read on Lithium is in line with what I read so far about the element. Demand far outweighs supply, pushing the price to unprecedented heights. The trend will persist for a few years to come. For good measure, even though extracting and producing Lithium have adverse impact on the environment, there doesn’t seem to be an alternative on the horizon.

The butterflies we may never see again in Britain. Super beautiful

The Science Is Clear: Gun Control Saves Lives. For the life of me, I don’t understand how an 18-year-old who cannot get a beer from a bar legally can buy an automatic weapon and shoot dead 19 people. It’s just insane. Take driving as an example. Try driving after either 3 beers or 2 Old Fashioneds and see if you get a DUI. We ban people who consume alcohol from driving, but we close our eyes at folks who may have malicious intent and try to get a weapon. How does that make sense? Look up how Japan regulates gun possession and usage. Then compare the deaths in mass shootings between the two countries. To be perfectly clear, nobody is arguing to take away the right to bear arms. Just like nobody wants to take away the right to drive. We just want access to fire arms to be regulated and controlled so that the tragedies stop. And I read the 2nd Amendment. I don’t think the proponents of the Amendment understand it well…

Stats

Domestic air fares in April 2022 were up 27% compared to April 2019 and 8% month over month

US online grocery sales in April 2022 declined by 4% year over year

45% of devs that earned more than $1 mil in 2021 were not on the App Store or had less than $10,000 in earnings five years before

US Hotel room rates in April and first two weeks of May 2022 were 10-14% higher than the same period in 2019

Source: STR
Weekly readings

Weekly reading – 4th February 2022

by MQDuongLeave a Comment on Weekly reading – 4th February 2022

What I wrote last week

Apple’s financials through charts

Amazon’s financials through charts

Business

Hungarian Refugee Founded Car-Parts Maker Linamar in Canada. An amazing entrepreneurship story from an immigrant who slept on train station benches and had only a few dollars to himself. The so-called American Dream is not exclusive to America. It can happen anywhere if people have the will

Losses Mount for Startups Racing to Deliver Groceries Fast and Cheap. Food or grocery delivery market is competitive and cut-throat. If you don’t have the scale, you’ll have to spend lavishly in the beginning to acquire merchants and users. Hence, every order is a money loser. Surely, new comers add to competition for the incumbents, but how long the new comers can persist and compete is another matter

Why Japanese Businesses Are So Good at Surviving Crises. “Many companies are stuck in short-termism, focusing on a strategic plan for five years,” he says. “But a lot of Japanese companies think about 100 or 200 years from now and envision the kind of future they want to create. During the tsunami disaster, the key mindset of executives was: We have to empathize with others. And companies ought to do the same thing now, during the current crisis, empathizing with those who are suffering and trying to figure out how to help.”

Google Is Searching for a Way to Win the Cloud. It’s mind-blowing to me that Google has been spending much of the last three years on bolstering its reliability, yet there were still issues. It goes to show how difficult it is to build a service such as AWS, Azure or GCP.

Inside Spotify’s Joe Rogan Crisis. After Twitter, Facebook and Google, Spotify is another organization that has an unenviable task of dealing with content moderation. The Joe Rogan show is hugely popular and draws eyeballs which equate to money for Spotify. However, that puts Spotify in a bind because his controversial content is opposed by some employees and influential artists. Facebook, for example, has poured literally billions of dollars over the years into content moderation. I wonder how much the urge to strike a balance of business and, let’s say, civic responsibility will cost Spotify. More important, whether they will be able to strike that balance at all

Other stuff that I find interesting

Cracking a $2 million crypto wallet. A fascinating story with a happy ending. I was too close to losing my cryptos once. Luckily, I remembered my password and did my utmost to ensure that I won’t be in the same situation again. At least that’s what I think.

Scientists Are Racing to Understand the Fury of Tonga’s Volcano. 10 million tons of TNT are just unfathomable to me. It’s amazing what Mother Nature can do. We are just too small and there are a lot to learn. This volcano eruption is one example

Inside Operation Warp Speed: A New Model for Industrial Policy. Whether you agree or disagree with the previous administration’s policies and ideology, the fact remains that Operation Warp Speed helped bring the much needed vaccines to the world. For that, it’s a success

Rafael Nadal: The ‘tough love’ that shaped a 21-time Grand Slam champion. The man with the most Grand Slams in history started his journey under a strict mentorship from his own uncle who taught Nadal the value of hard work and discipline.

Stats

Amazon bought 20% of all clean-energy purchases by global corporations in 2021

FTC reported that $770 million was lost to frauds initiated on social media in 2021

There were 9 million credit card non-prime originations in Q3 2021, up 75% YoY

“Of the mass shootings that took place from 1966 to 2019, 20% occurred in the last five years studied”

Weekly readings

Weekly reading – 22nd January 2022

by MQDuongLeave a Comment on Weekly reading – 22nd January 2022

What I wrote last week

Square Online’s on-demand delivery

Netflix’s price hike

Uber Eats lags behind DoorDash in the US. Advertisers made up 18% of Uber merchants

Business

Another gem from Howard Marks. “Superior investing consists largely of taking advantage of mistakes made by others.  Clearly, selling things because they’re down is a mistake that can give the buyers great opportunities. So it’s generally not a good idea to sell for purposes of market timing.  There are very few occasions to do so profitably and very few people who possess the skill needed to take advantage of these opportunities. Thus, someone entering adulthood today is practically guaranteed to be well fixed by the time they retire if they merely start investing promptly and avoid tampering with the process by trading. On April 11, 2019, The Motley Fool cited data from JP Morgan Asset Management’s 2019 Retirement Guide showing that in the 20-year period between 1999 and 2018, the annual return on the S&P 500 was 5.6%, but your return would only have been 2.0% if you had sat out the 10 best days (or roughly 0.4% of the trading days), and you wouldn’t have made any money at all if you had missed the 20 best days.  In the past, returns have often been similarly concentrated in a small number of days.  Nevertheless, overactive investors continue to jump in and out of the market, incurring transactions costs and capital gains taxes and running the risk of missing those “sharp bursts“”

Google Misled Publishers and Advertisers, Unredacted Lawsuit Alleges. “Google misled publishers and advertisers for years about the pricing and processes of its ad auctions, creating secret programs that deflated sales for some companies while increasing prices for buyers, according to newly unredacted allegations and details in a lawsuit by state attorneys general. Meanwhile, Google pocketed the difference between what it told publishers and advertisers that an ad cost and used the pool of money to manipulate future auctions to expand its digital monopoly, the newly unredacted complaint alleges. The documents cite internal correspondence in which Google employees said some of these practices amounted to growing its business through “insider information.”“

Shams vs. the ‘Woj bomb’: Sports reporters are duking it out for scoops on Twitter, and their value is soaring. The business of being constantly on the phone for breaking news sounds excruciating and exhausting

Interview: Ryan Petersen, founder and CEO of Flexport. “One thing to remember here is that in America, the ports are owned by the local city that they’re in. Therefore, they’re not managed as a strategic national asset, which they clearly are. The first thing that I would do if I were in charge would be to actually put a team in charge. Right now, there isn’t a dedicated team within the federal government to coordinate all public and private sector activities to help resolve the supply chain crisis. It’s spread across multiple regulatory agencies, jurisdictions and levels of government. The two big bottlenecks are a lack of chassis and a lack of yard space both at the container terminals and in the yards around neighboring cities. We know that the federal government and the state government of California owns a lot of land so we’d love to see them make it available for storing containers and creating off-terminal storage facilities where truckers can pick up containers easily without having to wait in long lines at the gate to the ports.”

What JPMorgan is doing with that $12 billion tech spend. The threat from fintech startups is real. It should be applauded that an incumbent like JP Morgan stays vigilant and is willing to invest a chunk of money to stay competitive. Not every company can do that. With regard to the ROI of this $12 billion investment, I get that folks can be skeptical when the management doesn’t reveal it. But at the same time, there are benefits that are very hard to quantify and the technology roadmap can change all the time.

Google Team That Keeps Services Online Rocked by Mental Health Crisis. A damning account of Google’s working culture, which once was a draw for talents

Peloton reportedly pauses bike and treadmill production because of lack of demand. The darling Covid stock now bears the brunt of ineffective management and operational flaws. They invested a lot in supply, only to find out that they picked all the low hanging fruits on the market and that they couldn’t sign up more customers.

Other stuff I found interesting

Nowa Huta: The city that went from communism to capitalism. An interesting story on how a Polish city transformed itself from a communist ruin into a vibrant city powered by capitalism

Tesla Wooed by India States After Elon Musk Flags Challenges. I am not really a fan of governments at different levels being pitted against one another by rich companies. Companies always go to states that offer them the biggest benefits; which do not often translate into better lives for the constituents and local economies. If Musk and Tesla have to enter India, and if the federal and state governments are unified in how they welcome Tesla, what choice would Tesla have?

How Big Beef Is Fueling the Amazon’s Destruction. “More than 70% of deforested land in the Amazon turns into pasture, the first step in a supply chain that’s among the most complex in the world.”

Stats

Ho Chi Minh City startups raise $1.1 billion in venture capital in 2021

Apple Card’s balance as of Q4 2021 was $8 billion

7 million or more than 5% of US households are unbanked

Alcohol sales was boosted by Covid. Source: Bloomberg

Business

Companies on Apple’s App Tracking Transparency

by MQDuong1 Comment on Companies on Apple’s App Tracking Transparency

Apple introduced App Tracking Transparency (ATT) in iOS14.6 several months ago. The idea is that any app that wants to track users even after users stop using the app has to ask for permission. If permission isn’t granted, the app or developers can’t follow users around off premise. Such a lack of signal could result in weakened…tracking, targeting, measure and of course, advertisers’ income. Since the introduction of ATT, some advertisers and developers have voiced fierce criticisms towards Apple for abusing its power. The criticisms grew harsher after Apple debuted its own advertising network. Even though Apple doesn’t rely on 3rd party data for tracking, the move and the awkward timing make it look like Apple doesn’t do it for user privacy, but merely for its own pocket. Privacy proponents, on the other hand, praise this move by Apple as it gives the end users a choice to allow tracking or not. Both sides have strong opinions. But what do the stakeholders have to say? How have companies been affected by the change from Apple?

In this post, I’ll cite as many opinions from relevant parties in this debate as I can, so readers can form their own opinion. I’ll add my own thoughts on this debate in the end

Again, look, I think from our perspective, we haven’t really seen a negative impact of the Apple changes. As we said before, it’s beginning to become a more complex world from a data and privacy perspective.I think that makes the advice to give our clients more important. It will have an impact on individual media owners, depending on their business model. And I think those that have been impacted have been those companies that tend to have sort of a big app download business, which is linked very carefully to the ability to track what’s happening. That’s not part of the business in which we really operate, so I think accounts for the — perhaps the surprises that you saw there.

WPP CEO Mark Read – Q3 Earnings Call

Yes. So for us, it didn’t really have much of an impact. We did — like a lot of people, we’re very aware of it. We have a very big brand business which wasn’t significantly impacted at all. And the fact that we are — have a ton of first-party data with all of our users being logged into the service really helped us grow. So we didn’t really see much of an impact at all. We don’t see much going forward, although we’ll continue to monitor it. And Q4, for us, the biggest impact on Q4 will just be continued growth in podcast and in inventory. We know the demand is there. We know the advertisers are there.So for us, it’s just continuing to expand the inventory available for advertisers.

Spotify CFO Paul Vogel – Q3 2021 Earnings Call

Let me also spend a moment on ATT. We continue to see opportunities around personalization on Twitter as we better leverage our unique signal to improve people’s experience and show their more effective ads across both brand and direct response. The revenue impact we experienced from ATT in Q3 increased on a sequential basis but remains modest. The impact of ATT is likely to vary across ad platforms given the unique mix of ad formats, signal and remediations on each as well as other factors, the mitigations we put in place and the speed with which we’ve adopted new standards like the SKAdNetwork and resulting changes across our technical stack have contributed to minimizing the impact to us.

Since the launch of ATT in April, we’ve invested in supporting SKAdNetwork, opening up 30%-plus more inventory and scale on iOS and launch support for view-through attribution and SK Campaign ID management features in the Twitter ads manager. It’s still too early for Twitter to assess the long-term impact of Apple’s privacy-related IOS changes, but the Q3 revenue impact was lower than expected, and we’ve incorporated an ongoing modest impact into our Q4 guidance. We’ve seen our revenue product development, both related to and distinct from ATT, improved the performance of our products, and we expect that to continue.

Twitter CFO Ned Segal – Q3 2021 Earnings Call

In terms of the iOS 14 changes specifically, they had a modest impact on YouTube revenues. That was primarily in direct response. I think as you all know well, focusing on privacy has been core to what we’ve been doing consistently

Alphabet/Google CEO Ruth Porat – Q3 2021 Earnings Call

Rich, thanks so much for the question and share your disappointment. This has definitely been a frustrating setback for us. But I think over the long term, these privacy changes and protecting privacy for users of iOS and, of course, the Snapchat community is really important to the long-term health of the ecosystem and something that we fully support.

I think when we saw these changes coming, our primary focus was the performance of our advertising platform in the face of this signal loss. So could we still really drive advertising performance, optimize campaigns, make sure our ads were in front of the right people. And we spent the vast majority of our engineering time and effort and energy making sure our ads were still really effective. And we did all sorts of revenue back testing to make sure that we could be revenue neutral. And we were really confident in our ability to drive results with our advertising platform despite the signal loss.

But what I think we really underestimated were the tooling changes. And so what I mean by that specifically is that advertisers have essentially for a long time now, used a set of really sophisticated tools to measure and optimize their campaigns. So that allows them to test out a bunch of different creative and see what’s performing more effectively and so on and so forth. And the big change there was that with these new Apple changes, those tools were essentially rendered blind. And in their place, Apple released a new product called SKAdNetwork that allows advertisers to measure across different advertising platforms but without a lot of the flexibility that they’re used to. So for example, you can only really measure your advertising results using the success parameters that Apple is already defined. The reporting is delayed for a significant period of time and often unavailable, if you don’t hit a certain threshold of conversion. It’s very hard to see performance on a creative level.

Snapchat CEO Evan Spiegel – Q3 2021 Earnings Call

A dozen e-commerce companies interviewed by The Wall Street Journal said they now have to spend a lot more money on these ads to get the same number of sales from them that they could expect before the new feature was rolled out. They also can’t get enough data to know how effective these ads are at driving purchases. Many have reduced their ad spending on targeted-ad platforms. In a July poll of 118 e-commerce store owners by eCommerceFuel, 62% said they had decreased their Facebook ad spending since the iOS upgrade.

Source: WSJ

We’ve been open about the fact that there were headwinds coming, and we’ve experienced that in Q3. The biggest is the impact of Apple iOS 14 changes, which has created headwinds for others in the industry as well, major challenges for small businesses and advantaged Apple’s own advertising business. We started to see that impact in Q2, but adoption on the consumer side ramped up by late June, so it hit critical mass in Q3.

Overall, if it wasn’t for Apple’s iOS 14 changes, we would have seen positive quarter-over-quarter revenue growth. And while we and our advertisers will continue to feel the effect of these changes in future quarters, we will continue working hard to mitigate them.

On targeting, we focused on improving campaign performance even with the increased limitations facing our industry. We’re building commerce tools to help businesses reach more new customers and get more incremental sales. And over the longer term, we’re developing privacy-enhancing technologies in collaboration with others across the industry to help minimize the amount of personal information we process while still allowing us to show relevant ads. Progress in these areas will take time and will be a focus for us throughout 2022 and beyond.On measurement, as we wrote in a recent blog post, we believe we are underreporting iOS web conversions. This means real-world conversions like sales and app installs are higher than what’s being reported from many advertisers, especially small advertisers. We’re making good progress fixing this. We think we’ll be able to address more than half of the underreporting by the end of this year, and we’ll continue to work on this into 2022.

Facebook COO Shreyl Sandberg – Q3 2021 Earnings Call

Kathy Huberty: And Tim, as a follow-up. We recently surveyed 4,000 consumers in the U.S. and China, and the feedback is most of them don’t want to pay for apps or services direct with the developer. They value the security, privacy, ease of transactions with the App Store. So how do you think about balancing the regulators push for more choice with a customer base that’s happy with the existing experience?

Tim Cook: The main thing that we’re focused on, on the App Store is to keep our focus on privacy and security. And so these are the 2 major tenets that have produced over the years a very trusted environment where consumers and developers come together and consumers can trust the developers on the developers and the apps or what they say they are and the developers get a huge audience to sell their software to. And so that’s sort of #1 on our list. Everything else is a distant second.

Apple Q4 2021 Earnings Call

My take

This issue features different stakeholders with varied interests. Even from the advertiser side, companies receive the change from Apple in various ways, depending on whether they are affected by it more or less than their rivals. Hence, when it comes to the question of whether ATT is a net benefit change, then we have to ask: for whom? For consumers, I do think it’s a great development. The surveillance tracking has been the standard practice in digital advertising for years. However, it doesn’t have to continue this way in the future. Consumers used to not have a say in the matter. Now they do. The choice is totally up to them and I think it’s great.

For businesses that rely on digital marketing, it’s undeniable that there is a short-term pain. As you can see above, some have to invest more money in digital ads for the same result. While I feel for them, the fact and the matter is that changes in external environments are part of doing business. Something that business owners have to encounter and overcome.

Regarding advertisers, I’ll say the same thing. The big change has finally arrived. Advertisers can either adapt to a society that is more conscious of privacy or keep complaining. Based on the commentary above, some advertisers have had little adverse impact so far from ATT. They invested in new tools, first-party data, distribution and products to overcome the obstacle. Even Facebook, the biggest whiner, also talked about how they tried to minimize the impact on their business. I don’t blame Facebook or any advertiser for vocal opposition. They do what they have to for their interest. But if millions of dollars is created in spite of violation of consumer privacy, then perhaps it’s time to change.

For Apple, even though apps and developers are important stakeholders in their ecosystems, the number one priority is still consumers. Whether you like Apple or not, the company is trusted by consumers, especially on the privacy front. For years, they have implemented services, software and hardware features that promote privacy. Because of this track record, for the time being, I believe in Apple. Of course, the company also wants to grow their highly profitable advertising network. Where Apple earns credit is that they manage to find a sweet spot that overlaps the two interests. With that being said, the introduction of Apple Search Ads after ATT plants the seed of doubt over their motive. Does it mean that what Apple did is inherently wrong? Not really. Companies exist to make money and look out for their and their shareholders’ interest. Apple is doing what it believes to be the best for their business. Is Apple a bit too much when it speaks from an ivory tower while launching its own ads network? Yeah, but that’s what every corporate Marketing department does.

Based on what I have seen so far, and I will continue to follow this issue, the advent of ATT is a significant change with big consequences in eCommerce, mobile ads and digital ads. I think a year from now, we will not decry ATT as something that wrecks peoples’ livelihood. Instead, it will bring about positive changes and innovation. Perhaps a similar move from Android within the next 2,3 quarters?

Disclaimer: I have a position on Apple, Facebook, Snapchat, Spotify