Weekly reading – 9th January 2021

What I wrote last week

My review of the NYTimes as a business

If you haven’t heard of MDSave, read about my experience with it and how it can save you money

I talked about why I thought Apple’s Services have just only begun

Business

In the Face of Lockdown, China’s E-Commerce Giants Deliver

Consumer spending on the App Store reached $72 billion, compared to almost $39 billion generated on Google Play

A merchant detailed his dealing with Amazon. It’s mind-blowing to see how much Amazon charges merchants for being on their site and how much these merchants rely on the behemoth for revenue. While the total commission is high, that’s the price to pay when you don’t own the customer relationship.

Autodesk's sales growth after its SaaS transition
Source: Polen Capital

Technology

EV vehicles’ market share in France hit 19%, up 6x YoY

South Korea has 11 million 5G subscribers

Facebook published usage stats of their apps on New Year’s Eve. More than 1.4 billion voice and video calls were made on Whatsapp on New Year’s Eve

What I found interesting

The Eerie Beauty Of The Apple Watch Solar Face, And The Anatomy Of Nightfall

Hawaii beaches face the threat of erosion

Boeing Max – Failure from incentive, negligence and irresponsibility

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

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

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

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

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

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

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

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

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

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

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

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

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