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

Weekly reading – 17th September 2022

What I wrote last week

Relocation from Vietnam to the US with a cat

Business

JPMorgan Chase acquires payments fintech Renovite to help it battle Stripe and Block. Incumbent financial institutions are sparing no coins to invest in their technology stacks. Capital One has always touted itself as a technology company. JPMorgan Chase has plowed so much money into fintech that the long-time CEO Jamie Dimon is under pressure to justify the investments. But that’s the name of the game. Any company that wants to compete in finance in the future will need to put money where its mouth is

Goldman’s Apple Card business has a surprising subprime problem. Given the lack of disclosure from either Goldman Sachs and Apple on earnings calls, it’s helpful to finally to see some performance metrics of the Apple Card portfolio. The headlines are that more than 25% of the overall outstandings is from folks with FICO lower than 660 and the loss rates are among the highest in the industry. The article did well to note that Apple Card is a young business; therefore, its loss rates may not be fully comparable to other fully established ones. I’d also love to learn about the share of balance from Apple purchases. My theory is that since a lot of people use the Apple Card to break their payment into installments, the lower FICO crowd is responsible for the bulk of such payment plans’ balance. Is that necessarily a good thing? I don’t know. But if these “bad apples” are barred from holding an Apple Card ever again, whoever is left will be good loyal customers.

Apple’s Next Big Thing: A Business Model Change. Apple’s executive team doesn’t get enough credit for their long-term vision, the ability to pivot & execute and their relentless patience.

($) How a CEO Rescued a Big Bet on Big Oil; ‘There Were a Lot of Doubters’. Vicki Hollub sounds quite a businesswoman, an operator and an executive!

How to blow $85 million in 11 months: The inside story of Airlift’s crash. Another one on a long list of examples of how companies collapse due to the “move fast and break things” mantra.

($) Instagram Stumbles in Push to Mimic TikTok, Internal Documents Show. If I were Meta investors, I would be worried. The company commits huge investments, HUGEEEEEEE, to the Metaverse, a concept championed by the CEO which, in my opinion, is very very far from reality and of course, monetization. Its business model built upon surveillance tracking is under pressure from Apple’s privacy-centric, though controversial, policies. Meanwhile, Reels, which is one of the highest priorities, is no match against TikTok. According to the Chief Operating Officer of Instagram, Reel’s differentiation comes from the ease of sharing content. I mean, that’s a very weak point. “Instagram users cumulatively are spending 17.6 million hours a day watching Reels, less than one-tenth of the 197.8 million hours TikTok users spend each day on that platform, according to a document reviewed by The Wall Street Journal that summarizes internal Meta research. The internal document showed that nearly one-third of Reels videos are created on another platform, usually TikTok, and include a watermark or border identifying them as such. Meta said it “downranks” these videos, meaning it shows them to smaller audiences to reduce the incentives for those that post them, but they continue to proliferate. For Reels users, the result is that often they are shown videos recycled from another, more popular platform. The portion of Instagram users who think the company “cares about” them fell from nearly 70% in 2019 to roughly 20% earlier this summer. On the question of whether the product was “good for the world,” the score fell from more than 60% in 2019 to slightly over 45%.”

Other stuff I find interesting

Good enough. On Twitter and business websites, you see all kinds of people trying to predict the performance of a stock or a business. Some do it with a breath-taking degree of condescension and over-confidence. At work, the phrase “data-driven” which refers to the practice of using historical data to back up a course of action is just overused and bores me to death. Instead, I like what Morgan proposed. Make all the predicting and forecasting good enough and then spend the unused bandwidth on something else. I don’t know, like understanding the industry, the customers or what is holding the company back and fixing it.

Three Big Things: The Most Important Forces Shaping the World. A great perspective by Morgan Housel

Shanghai emerges as China’s semiconductor highland. “In total, the market size of Shanghai’s semiconductor industry reached 250 billion yuan (US$36.95 billion) in 2021, or about a quarter of China’s total, according to Wu. The city has attracted over one thousand key industry players and over 40 per cent of the country’s chip talent, Wu added. Shanghai’s relative success in cultivating a big local semiconductor industry has been partly helped by the city’s preferential policies. To attract semiconductor businesses, talent and investors to the city, the Shanghai authority has rolled out a series of preferential measures, from government subsidies to tax breaks. Even during the city’s draconian lockdown in April and May, the local authority gave priority to semiconductor businesses to resume their production and operations as soon as possible.”

The Oldest Restaurant in Kabul: Where Tradition Trumps Rockets. “During the four decades of war that Afghanistan has been through, the Broot family never left the country. They kept their restaurant open and continued serving chainakito the hungry people of Kabul as rockets rained on their neighborhood, bombs exploded, and regimes changed.

Discipline is Destiny: 25 Habits That Will Guarantee You Success

Stats

Indonesia, Brazil, Ghana and Suriname accounted for 80% of tropical forest loss due to industrial mining between 2000 and 2019

Top-Ranked US Colleges All Cost More Than $55,000 a Year. BEFORE room and board.

U.S. mortgage interest rates top 6% for first time since 2008

Source: Twitter

Weekly reading – 10th September 2022

What I wrote last week

Apple is gaining share in advertising; Disney is contemplating an Amazon Prime like subscription

Business

The optimal amount of fraud is non-zero. A great post on fraud as an unavoidable risk of doing business

How Capital One Became A Leading Digital Bank. Some folks say that Capital One’s rise as one of the premier credit card issuers results from its robust data analytics. That may be true, but it’s still just a surface-level observation. What really drives Capital One’s growth is their investment in infrastructure & talent, as well as smart design of process to utilize such resources. In this article, you’ll see their CIO discuss this topic at length. As someone who works in the credit card industry, I admire what they have done and can really see why they are successful.

($) Amazon Is Still Trying to Digest Whole Foods. Integrating any multi-billion acquisition is always a challenge, but the task is even more daunting when the acquirer has to divert focus and resources to its own grocery effort. To that end, it’s impossible for outsiders to judge whether this move has been a success so far since Amazon doesn’t break out Whole Foods’ individual performance. Asking Amazon’s executives for their evaluation is similar to asking a barber if you need a haircut. It’s always going to be biased opinions.

The Facebook button is disappearing from websites as consumers demand better privacy. In the past, Facebook log-in button was all over the Internet. It was convenient and people weren’t aware of how Facebook did surveillance tracking over them. Now, the public knows and they don’t trust Facebook. The lack of trust leads to low usage as well as causes websites to be concerned about being collateral damage. As a consequence, websites don’t want anything to do with the then popular blue button. This is a prime example of how Facebook’s bad reputation is biting them in the behind and unfortunately for them it will not be the last as long as their business model is advertising based on surveillance tracking. “According to his company’s data, out of a sample of 10,000 sign-ins, 42.7% of users signed in with Google, 26.5% used Apple, 20.1% signed in via email and just 10.7% used Facebook.”

What’s SAP?

The Long Tail: The Internet and the Business of Niche

Other stuff I find interesting

Less is more agile. I agree with a lot of points that this article brought up. The traditional Waterfall method of delivering software had downsides which were especially exposed when software became increasingly complex. Only when technology got sufficiently sophisticated did we come up with a new methodology that is more efficient and allows us to incorporate changes faster. That’s Agile. But at the end of the day, Agile is just a tool and how useful it is depends a lot on who is using it and for what purposes. It’s NOT helpful to blindly follow what the coaches that have no knowledge of your organization’s culture or business say. It’s NOT helpful either to keep preaching the benefits of Agile while ignoring its downsides and what it demands from practitioners. What works for some won’t work for others. Just be mindful of what you sign up to.

I Worked at Capital One for Five Years. This Is How We Justified Piling Debt on Poor Customers. Consumer loan issuers do address real consumer needs. Health emergencies, family tragedy, desire to investment, etc. Sudden need for capital infusion. However, these issuers make most money from interest income, meaning that they WANT you to pay interest and not to default. That’s clearly not in line with the best interest of borrowers. Capital One, in this case, is just an example.

Bones: Why Utah’s desert is a paleontologist’s playground. “Only a very tiny percentage of species that ever existed on Earth have been fossilized,” according to the U.S. Geological Survey. Of those that have, only a fraction have been discovered. That’s in part due to accessibility; many fossils are likely buried so deeply that they’re unreachable. But it’s also because paleontology, as a science, remains fairly new. This particular site, now known as T2, is the confirmed resting place of a tyrannosaur, which may be the first complete adult specimen of an incredibly rare species. And the fact that it lies under 10 feet of ancient sandstone conglomerate in the Utah desert is no coincidence. Utah has been known as a paleontological treasure chest since the late 19th century. In fact, the Utah History Encyclopedia says the state boasts a “prolific fossil record that spans the entire ‘Age of Dinosaurs.’”

European cities look to phase out cars in ‘transportation revolution’. “Across the continent, urban centers are restricting cars from entering certain parts of cities as well as imposing new fees. In Paris, which holds car-free Sundays, only newer, less-polluting diesel and gasoline-powered cars can travel into “low-emission zones” across the city; by 2030, only electric or hydrogen will be able to enter the French capital at all. In Norway, where 78% of new vehicles are electric, Oslo eliminated most on-street parking spots in the city’s core. The medieval Belgian city of Ghent limits vehicles in the city center by offering free shuttles from low-priced car parks on its periphery. Drivers heading into London during business hours must pay congestion fees of $17 a day and further entry fees of $15 simply to enter “ultra-low-emission zones”; in some parts of the city, cars will soon be forbidden altogether.”

History of Labor Day

Vietnam’s Mu Cang Chai in ripe rice season a feast for the eyes. Beautiful as it is, this part of Vietnam is quite dangerous to get to. Some folks already lost their life because of treacherous roads and conditions. One of my friends nearly lost hers a few months ago. Definitely not for conservative and risk-adverse folks like myself, but I would love for the world to see my country and what we have to offer.

Stats

“Lord of the Rings: The Rings of Power” series drew more than 25 million viewers worldwide on its first day

China Accounts for 36% of Global Peanut Output

Apple TV+ allegedly surpasses 6% of the global market share

Source: Recurrentauto

Weekly reading – 3rd September 2022

What I wrote last week

Two tips on personal finance

Business

($) Disney’s New Pricing Magic: More Profit From Fewer Park Visitors. As a shareholder, I am more concerned than happy after reading this article. Annual pass-holders are loyal customers and should be valued. Instead, the recent changes signal to them that money is more important than the long-standing relationship forged with the company. Disney’s theme parks are unique and hold precious memories in a lot of folks, but there is a price for everything. At some point, customers will realize that however fond some memories are, it’s just too expensive to bring the whole family there. I hope Disney executives wake up today, read this piece and take some actions before any revolting can happen.

Where Amazon is heading in health after the Amazon Care failure. Amazon is known for running lots of experiments and tinkering till they find a solution that actually works. Amazon Care is an example of that. They realized that they were not able to venture into healthcare by themselves. Hence, a string of acquisitions ensued, namely Signify Health and One Medical. There are risks still with this strategy, though. Cultural conflict between acquired companies, and even between them and Amazon. Difference in data infrastructure. Market cannibalization. It’s just the start of a multi-year and likely very expensive project.

Cash is king for EV makers as soaring battery prices drive up vehicle production costs. A good round-up of EV makers

($) Starbucks Is Rethinking Almost Everything, Including How to Make Frappuccinos. What seems to be a straightforward operation at a Starbucks store may be more complex than you think. Read this piece to learn more how Starbucks is adjusting to changing tastes and responding to complaints from baristas

Be good-argument-driven, not data-driven. Data is your prisoner. If you are motivated enough and if you torture the prisoner enough, it will say whatever you want it to say. Whether it’s intentional misrepresentation of data or incapability to analyze data properly (no apples-to-apples comparison, for example), it’s easier to preach “data-driven” than implement it. Too much of anything can’t be a good thing. There must always be balance. There is indeed a place for data, but since it’s just a tool, its effectiveness hinges a lot on how we use that tool.

Medium’s new CEO on the company’s journalism mistakes, bundle economics, and life after Ev Williams. I used to like Medium a lot. So I can’t help but feel like the company missed a gigantic opportunity to strengthen its advantages and grab market share. Now, it’s too late for Medium to rectify its mistakes.

Zenly is still hugely popular, so why’s Snap shutting it down? It’s sensible to reduce headcount when Snap already gets its hands on Zenly’s technology. It’s also difficult to argue against avoiding cannibalization between the potential Snap Map and Zenly. What should be questioned is whether this plan will come to fruition or will be a massive write-down. Why do I say so? Snap introduced a mini drone not long ago only for it to abandon the plan completely later to be more focused. In case you haven’t noticed, Snap’s latest forecast is disappointing and what investors don’t know is how this $250 million acquisition can help the company move forward

Going Private: How to Succeed in Store-Brand Sector.In the past, retailers could rely more on the in-store environment to promote their store brands. Today, in our omnichannel world, consumers can find a product anywhere, so retailers must have an online presence for their brands. FMI’s report notes that there’s an opportunity for more retailers to tie their loyalty programs to their private brands — particularly when it comes to the online side of the business. Only a third of shoppers using their grocery store’s loyalty program said that they receive extra points for purchasing store brands. This is a way for retailers to promote more online private-brand purchases including the use of digital coupons.

Other stuff I find interesting

The Godfather of South Korea’s Chip Industry. “His experience at Fairchild solidified his belief, first inspired by his father, that a true “engineer’s mind” requires practical skill as much as theoretical knowledge. In addition to performing experiments, he made a habit of reading internal technical reports and memos that he found at the company library, some of which he later brought to KAIST and used as teaching material.

Live cheap or live expensive: The choice is yours in Ho Chi Minh City. As a Vietnamese, it’s interesting to me read about expat life in Vietnam. I have my reservation on the $10 daily budget on food for him and his wife (and a beer). Having lived in the US since 2016, I am not too familiar with electricity bills in different areas of Saigon (a local name of Ho Chi Minh City) either. But he made a good point that it’s important to live close to where you work. The traffic in the city is egregious. Even a 5km commute which is like peanuts in the US can take a lot of time and cause so much frustration that a little bit more rent to help you avoid that is worth it.

The Midwit Trap. “An intelligent person will know that there is no correlation between the simplicity of a solution and the sophistication of the reasoning that led to it”

Why A4? – The Mathematical Beauty of Paper Size

Stats

July U.S. eGrocery sales climb 17% versus year ago to $7.8 billion

According to Edison Research, 35% of adults in America own a smart speaker (their sample size of about 1,200 subjects gives me a little concern)

Average transaction price of new vehicles in the U.S. was up 11.8% year-over-year in July 2022

Roads that need repairing in Nebraska cost each driver $461 per year

iOS US market share hits all-time high and exceeds 50% for the first time

Weekly reading – 27th August 2022

What I wrote last week

Do as I do

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

Business

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

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

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

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

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

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

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

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

Other stuff I find interesting

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

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

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

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

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

Stats

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

‘House of the Dragon’ draws nearly 10 million viewers

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

Weekly reading – 20th August 2022

What I wrote last week

Did App Tracking Transparency Really Ruin Small Businesses?

Business

The HBO Max Rumor Mill Was Wrong — But There’s Still Pain to Come. The streaming business gets increasingly interesting yet complicated for me to wrap my head around. There are so many factors that go into the decision making and unfortunately, companies don’t divulge enough to investors. Anyway, it’s a good piece on HBO Max and the rumor that the new parent company will merge it and Discovery+.

Personalized coffees and prestige skincare: Consumers snap up premium products despite cost-of-living crisis. Who would have thought that consumers would prefer private label grocery brands to national names but be willing to spend on expensive coffee and pricey skincare products?

($) U.S. Approves Nearly All Tech Exports to China, Data Shows. Reading this article, I think the heart of this issue is communication failure. Other agencies don’t give effective input to the Commerce Department. Their objective is to facilitate trade between the US and other countries. China is rich enough that if the US restricts exports, other countries are willing to fill the void, especially when such exports are not 100% exclusive and rare. Also, there is no consensus on what should be the balance between not arming a worthy adversary and protecting the trade interests.

Dr Drew’s podcast episode with Morgan Housel. There are a lot of gems in this episode. One of them is the definition of rich vs wealthy. According to Morgan Housel, rich means that you are able to pay monthly bills on your own. Wealthy means that you set aside some capital for investments that you don’t have to use to pay for expenses. Once we are wealthy based on such a definition, what brings us misery is our greed and jealousy. I have to agree with him.

($) Should Disney Get Rid of ESPN? The Debate Returns. ESPN is an important asset of Disney as it holds broadcast rights to popular sports leagues such as NBA. ESPN+ is a crucial piece in the Disney+ puzzle and the bundle that Disney wants to sell to consumers. Therefore, I don’t see any reason why Disney should get rid of ESPN

Here’s why HBO Max is pulling dozens of films and TV series from the streaming platform. “While HBO Max already paid for the production of these shows, it’s still on the hook for residuals, including so-called back-end payments to cast, crew and writers, based on long-term viewership metrics. By removing these films and shows, especially the ones HBO Max created rather than licensed, executives can cut expenses immediately. Warner Bros. Discovery has promised at least $3 billion in synergies stemming from the merger of WarnerMedia and Discovery, announced in May. The content eliminations in total will save “tens of millions of dollars,” according to two people familiar with the matter, who asked not to be named because the finances are private.”

Other stuff I find interesting

Is dark chocolate really good for you? For those that are interested in the health benefits or potential risks of dark chocolate

The Day You Decided to Take the Leap. Building this blog was a leap to me several years ago. I was not a writer. I did not feel comfortable talking about myself or my thoughts. But I felt the urge. The urge of finding a medium through which I can improve myself while satisfying all the other requirements (school, work). I took that leap. Even though I haven’t had any financial returns (in fact it is an expense to maintain this blog), I find joy from this habit. It’s a sanctuary where I can be myself creatively and escape mentally at times. Those weren’t on the benefit list when I contemplated taking the leap.

We need to try harder to prevent the next pandemic. What do they always say? Failing to plan means planning to fail. As a country, it seems like we are planning to get hit again with another crushing pandemic. Our pandemic prevention budget went from an ambitious $65 billion to less than $3 billion, half of which will be dedicated to the modernization of CDC’s labs. You know how much we spend on military? $725 billion in 2020. It’s well documented that our generals didn’t think we need that much money on defense. Plus, an insider like the author of the book Kill Chain outlined all the monumental wasteful investments in defense. That we budget less than $3 billion on the prevention of pandemics, the latest of which took 1 million lives in America is baffling to me. Well, I mean pathetic.

Fresh Herbs & Spices in Vietnamese Food. Some of the herbs are not popular around here in the US or many countries. I am happy whenever I can introduce my country and culture to others

Ultimate list of Japanese Vegetable Cutting Techniques

Stats

In 2020, 16% of Blockbuster’s revenue ($ 800 million) came from fine fees

“38% of white adults say their parents or older relatives have given them or their family gifts or loans worth $10,000 or more over the course of their adult lives.”

Retail expenses make up 78% of a cup of coffee’s price

July 2022 was the world’s sixth-hottest July on record

One solar Watt in the US costs $2.77, about 4 times more expensive than in Australia

There were 43,000 traffic deaths in the US in 2021

5-10 hours of moderate physical activity or 2.5 to 5 hours of vigorous exercise will help lower the risk of premature mortality

Source: Supermarketnews

Weekly reading – 13th August 2022

What I wrote last week

PayPal Q2 FY2022 Results

Business

Monzo growth. A fascinating story on the early days of Monzo, a successful fintech company from the UK

The Wolf in Cashmere’s Conglomerate. A fantastic podcast episode on LVMH and the empire that they have built

($) How One Grocery Chain in Pennsylvania Is Preparing for a Downturn. An interesting case study of how a low-margin business in a cut-throat industry is responding to the macroeconomic challenges. I wonder if these companies will keep lessons learned during this period long in the future. You know what they say, never let a crisis go to waste

Deckers Brands: “The Ugliest Shoes of All Time”

Multicultural Grocers Drive Sales by Catering to Increasingly Diverse America. It’s imperative for grocers to closely understand the social fabric of the areas where they operate. Folks from different backgrounds have different preferences. Grocers who make the best use of their footprint, aka maximize revenue per square foot, must appeal to as many customers and sell as many goods as possible. This will require efforts, focus and investments in infrastructure and tools. But there is no other choice in the ever highly fragmented and competitive world of grocery

Ad Tech Revenue Statements Indicate Unclear Effects of App Tracking Transparency. A very balanced and reasonable take on ATT. If you are interested, here is my take on ATT

Landmark “Self-Dealing” Arbitration Found Netflix In “Violation” Of WGA Contracts. It’s interesting to learn about contracts and compensation schemes in Hollywood

Other stuff I find interesting

China’s southern tech hub Shenzhen becomes first city on mainland to regulate fully autonomous, driverless cars on some roads. The Chinese may have autonomous vehicles on the streets before we do. I am not talking about a few vehicles or test drives. This is about a large scale adoption of autonomous vehicles. Technology alone is not enough. There are important questions that must be answered. For instance, who will be liable for damages in accidents? Are there regulations for that? Shenzhen’s regulations already took place; something that is not yet available here in the US, to my best knowledge. For me, that’s an encouraging sign and a big step towards the future that many envision.

Prison Money Diaries: What People Really Make (and Spend) Behind Bars. I felt angry after reading this piece. Even though violators of the laws should pay for their transgressions, as one of the most developed and richest countries in the world, we should build prisons that offer sufficient living environments to inmates. According to inmates, everything in prisons is pricey and they get increasingly more expensive over time. To buy goods, inmates have to work, although the pay is embarrassingly low. One receives $7 for 8 hours of work. And he said this: “If I work two sessions, that’s $6.68 per day. Almost nothing else in the Department of Corrections pays like this. Plus, during Covid, they gave us hazard pay — $2 extra per day. Last July, I made $334. The two primary things I spend on are: my phone credit account and commissary store purchases. The food at the chow hall is terrible and of poor quality — it’s not fit for a dog, seriously.” Google the prisons in Finland or Norway and see how badly we treat our fellow citizens.

Global Supply Chains of EV Batteries. A long yet excellent primer on the global supply chain of EV batteries. As everything around us requires batteries, those who hold power in this supply chain have tremendous advantages in the future

iOS Privacy: Instagram and Facebook can track anything you do on any website in their in-app browser. This is exactly why I support Apple in disabling cross-app tracking. Facebook and other advertisers have all the motivation in the world to collect data on us. They are financially incentivized to do so. It’s up to us and companies like Apple to tell them NO

No Great Stagnation in Guinness. Guinness is one of my go-to beers at a pub. It’s great to read a bit about how unique and quirky the business is

Europe’s remote, lost-in-time villages. “Life in Târnava Mare has barely changed in centuries, offering a precious insight into the age-old traditions that are still going strong in its Saxon villages.”

Stats

35% of Gen Z adults in the US don’t trust colleges and universities in the country. Wow!

Adobe’s Digital Price Index found that online prices dipped down 1% year over year in July

Organic fresh produce tends to be twice as expensive as conventional produce. However, conventional fresh produce had a bigger price hike recently

Source: Supermarketnews

Source: IEA

Weekly reading – 6th August 2022

What I wrote last week

Apple Q3 FY2022 Earnings

AWS, what a business!

Even with a loss of $2.6 billion, Uber had a great quarter

Business

($) America’s New Energy Crisis. A worrying report on the state of the energy supply in the US. Demand continues rise and unfortunately, so do oil prices. Projects to produce green alternatives take a long time to be completed and integrated into the national grid. “As U.S. power supplies tighten, developers are struggling to build these projects quickly enough to offset closures of older plants, in part because of supply-chain snarls. Another reason: It takes longer to approve their connections to the existing electricity grid. Such new requests neared 3,500 last year compared with roughly 1,000 in 2015, according to research from the Lawrence Berkeley National Laboratory. Typical time needed to complete technical studies needed for that grid approval is now more than three years, up from less than two in 2015. One renewable-energy developer, Recurrent Energy, filed more than 20 of these grid-connection requests last year in California, a state that needs more clean power to replace several gas-fired power plants as well as a nuclear plant slated for retirement in the coming years. It took the company seven years to get approval and construct a separate battery storage project in that state.”

($) JPMorgan Is Building a Giant Travel Agency. “It bought a booking system, a restaurant review company and a luxury travel agent. It is building its own airport lounges and a force of thousands of travel agents. A new website will launch in the coming months. JPMorgan estimates that its customers account for one of every three dollars spent on leisure travel in the U.S., though those customers book only a tiny amount on the Ultimate Rewards website. With the new offerings, JPMorgan executives believe the bank could capture $15 billion in bookings in 2025, five times what it handled before the recent buildup. That would make it the third-biggest travel agent in the country, based on 2021 volumes, according to industry publication Travel Weekly. The plan has risks. Travel-rewards giveaways have proved expensive for JPMorgan and other banks, and they haven’t always led to the lasting relationships the banks hoped for. JPMorgan also has important corporate partnerships with airlines and hotels that expect the bank to send customers their way. Some of those partners have already complained about the success of Sapphire taking away customers from their cards. The bank is already seeing early signs of that luxury demand. The average price Chase customers are paying for hotels is more than double the industry average, the bank said.”

From legroom to airfare: How JetBlue’s takeover of Spirit could change air travel. If you don’t know how expensive it is to travel domestically in the US, take a trip to Europe and try to fly within the continent. I was really shocked the first time I booked a domestic flight here. I am still shocked sometimes nowadays. There is competition between major airlines, but prices are still high because there is no regulatory pressure on a handful of airlines that fly customers. I don’t know if this merger will help anything. Having another major may drive air fares down. But it could as well join the fun and charge a lot.

US, Japan reaching for a 2-nm chip breakthrough. The race to secure semiconductor supply for the future amidst the political threat from China is more intense than ever. I don’t think China, regardless of whether Xi will be in charge, will give up Taiwan, home to TSMC. It’s not only because TSMC is THE fab of the most advanced chips in the world, but it’s also because China believes Taiwan belongs to them and has no rights to independence. Any nation’s leader will not fulfill their duty if they don’t think about hedging this risk. US and Japan are doing the right thing here. Better late than never.

Ad tracking rules could become much stricter in Europe; Apple’s ATT vindicated. Companies that rely on ads dollars should really pay attention. “This is the single, most important, unambiguous interpretation of GDPR so far. It backs up the approach of Apple.

($) Netflix Is Scrambling to Learn the Ad Business It Long Disdained. “One of Netflix’s goals was to secure a big “minimum guarantee”—a promise that it would get a large influx of ad revenue to limit its financial risk, say people familiar with the discussions. Netflix also hunted for a senior leader with advertising expertise, mindful that it knew little about the business of selling ads. The company approached at least two top Comcast executives for a senior role while the partnership negotiations were continuing with their employer, angering the top brass at the cable giant, some of the people said. Mr. Hastings has set lofty financial ambitions for the ad business. He and other company executives have told investors and ad industry executives privately in recent months that Netflix will eventually be able to charge advertisers about $80 for every 1,000 views of an ad by helping them target specific audience segments, people familiar with the discussions said. That would put Netflix among the most expensive destinations for ads, alongside top NFL television programming. Creating an advertising-supported tier isn’t the only about-face the company is making in its quest to revive growth. After years of treating password-sharing by customers as a marginal problem—Mr. Hastings said in 2016 he loved the practice—Netflix plans to begin charging households a sharing fee sometime in 2023.

Chip Makers Have a Message for Car Makers: Your Turn to Pay. The ever-growing demand for chips turns the negotiation tables around. Chip manufacturers now command more bargaining power than they ever have. Car producers have no choice but either put up or shut up. As every car company is now racing to bring electric vehicles and trucks to the market, they won’t shut up.

Other stuff I find interesting

Some wonderful photos of my country taken by an award-winning photographer

US regulators will certify first small nuclear reactor design. I understand that there are concerns over safety and nuclear waste, but nuclear is perhaps the best tool at our disposal to generate clean energy at scale to accommodate the ever increasing demand. I wonder how and/or if this step would help increase the use of nuclear power

Who Is Collecting Data from Your Car? An eye-opening read on the vehicle data world

Tails, You Win. Now that I think about it. Love is just pure dumb luck. The person that you fall in love with happen to love you back. If you manage to fall in love and spend the rest of your life with the same person, creating happy moments and sharing wonderful children and grandchildren, that’s as taily as tails get.

Biden wants an industrial renaissance. He can’t do it without immigration reform. As an immigrant myself, I can tell you that if I had known what I do now, I would not have come to the US. The immigration process here is very talent-unfriendly. The country pours billions of investments into technology, yet the immigration system is antiquated and undoes all the good that such investments bring. To secure the future of the US, the government needs to massively and quickly reform its immigration

Hidden menace: Massive methane leaks speed up climate change. It’s horrifying to learn that we are pumping an incredible amount of this polluter into the air while knowing that it can speed up climate change significantly.

The U.S. made a breakthrough battery discovery — then gave the technology to China. I could hardly believe what I read. A promising battery technology took a dozen US scientists, 6 years and millions of taxpayers’ money to be developed. Then, the Department of Energy transferred the technology to a company based in China where it is currently further developed and produced

Stats

HALF of the nation’s clean power is generated by nuclear energy

Gen Z has led all generations in terms of 30-59 day credit card delinquency this year, according to Vantage Score

OnlyFans has 200 million registered users

Globally, only 9% of plastic waste is recycled while 22% is mismanaged

Weekly reading – 30th July 2022

What I wrote last week

Book review: Soul In The Game: The Art Of A Meaningful Life

I adopted the Mediterranean Diet

Take-aways from Netflix’s Q2 FY2022

Business

($) Bed Bath & Beyond Followed a Winning Playbook—and Lost. The urge to change strategy and sell private labels quickly while ignoring the required changes to the existing infrastructure hurt Bed Bath & Beyond. They didn’t have time to design, build and market their private label brands properly. And there is Covid, which makes the situation worse for the big box retailer. Its website is antiquated and doesn’t offer pick-up option for customers. The latest reminder that a strategy may be sound, but execution matters

How the Durbin Amendment sparked fintech innovation. In case you wonder how smaller banks compete and how fintech startups can offer rewards, even on debit cards. A good primer on the Durbin Amendment

($) Jack Ma Plans to Cede Control of Ant Group. It’s interesting to read how Jack Ma structures the ownership of his voting rights and shares at Ant Group. Essentially, two companies control a hair higher than 50% of Ant Group shares. Jack Ma controls the voting rights of such two companies while sharing the share pool equally with two executives from Ant Group. Jack already planned to step away completely from the company he founded for years, but delayed the decision so that the IPO could go smoothly. His debacle with the Chinese government took care of that. It’s, again, amazing what little an unfathomably rich and powerful guy like Jack can do to the Chinese government.

How Big Tech Runs Tech Projects and the Curious Absence of Scrum. A very interesting post on scrum and by extension, project as well as resource management. One common mistake that I often see, especially from people without experience with scrum before, is that scrum and agile is this magic bullet to increase productivity and efficiency. Like any tool, yes, it theoretically can, but it has to be used in the right way. As you can see in the post, it’s not for every company. Even at the right companies that need it, scrum and agile need to be implemented properly. I am personally going through the painful experience of seeing it implemented improperly at my company. Sure, it doesn’t cost companies any additional resources. What it does cost is employee morale and trust in the leadership

Dollar General eyes bigger presence in health care. Dollar General is associated with low prices and smaller store sizes. The fact that they add fresh produce and health care to their line-up makes a fascinating business case to follow up.

A thread on how a Web3 startup that received $365 million in investments has $6,500 in monthly revenue. Yeah that wasn’t a typo

Other stuff I find interesting

In Remote Alaska, Meal Planning Is Everything. The rugged nature of Alaska is strangely appealing to me. I somehow wish that I could spend some time living there

Stats

Venture funding in Chinese startups in Q2 2022 fell to $9.1 billion, a whopping decline from $32.1 billion in Q4 2021

It costs only 4 cents for a 1GB of mobile data in Israel, compared to $5.6 in the US

Online sales during Prime Day 2022 hit almost $12 billion

Source: Bank of America

Weekly reading – 23rd July 2022

What I wrote last week

Three things a company can to hire great new entry-level staff and integrate them successfully

Business Unlimited Ultimate+ For Iphone

Business

Consumer Trends 2022: Mid-Year Update. An interesting study on consumer behavior by Coefficient Capital. One thing that stood out as terrifying to me is that 39% of the surveyed folks sayed they’d vote for Donald Trump if he runs for President in 2024

($) 71 Cities and Towns Are Paying Tech Workers to Abandon Silicon Valley. It’s Working. Local economies need bodies, tax revenue, consumption and entrepreneurship. Without these incentive programs, smaller cities have little chance to stand out and be the next destination for highly skilled workers. I really hope that somebody will conduct a wide range study on how effective such programs are.

From $25 billion to $167 million: How a major crypto lender collapsed and dragged many investors down with it. You live by the hype, you die when it dies. A rude reckoning for crypto traders

($) CFPB to Push Banks to Cover More Payment-Services Scams. Up to now, banks only have to repay the money that customers lost in fraudulently induced transactions. If the report is true, banks will soon have to provide more protection for consumers, investigate more transactions and potentially have to repay the money lost in scams that were even authorized by the end users. I welcome the proposal. Fraud is the number one concern when it comes to real time payment. Zelle, to the industry insiders, is littered with frauds. Having the regulatory push from the CFPB will force major banks to take more actions to protect the end users. On the flip side, more oversight may curtail the investment and interest in real time payment from financial institutions. But I think it’s a risk worth taking.

Target puts the squeeze on suppliers after inventories pile up. Relying on major retailers boosts a supplier’s scale tremendously, but also means that an abrupt change can seriously hurt the supplier’s margin. Dealing with expensive excessive inventory, retail giants like Target or Walmart pressures their suppliers to hold what they previously committed to take on and eat the cost. These suppliers are likely to swallow this bitter pill since a lot of future business is on the line here

Lessons from Germany’s Midsize Giants. A great collection of great mid-size companies from Germany that have the same formula to success as Aldi. I believe you get more value from reading this article and studying these companies than from a lot of business strategy textbooks at school

Other stuff I find interesting

The 2022 13-Inch MacBook Air. John Gruber’s review is excellent, as usual. I have to admit that it nudges me towards buying one later this year

($) Afghan Economy Crumbles Since Taliban Takeover. The economy collapsed. Demand evaporated. Financial support from other countries was cut off. 90% of the citizens don’t eat sufficiently while half of the population face acute hunger. The Talibans do not know how to run the country. What a catastrophe!

($) MBS’s $500 Billion Desert Dream Just Keeps Getting Weirder. “MBS, as he’s known abroad, was in the early stages of one of the largest and most difficult construction projects in history, which involves turning an expanse of desert the size of Belgium into a high-tech city-region called Neom. Starting with a budget of $500 billion, MBS bills Neom as a showpiece that will transform Saudi Arabia’s economy and serve as a testbed for technologies that could revolutionize daily life.” As I read this article, I couldn’t help but feel sad. The amount of money and resources poured into this grandiose project fueled by the ambition, if not delusion, of one powerful man could have helped a lot of unfortunate people around the world.

Case Study 8: How Hertz Paid Accenture $32 Million for a Website That Never Went Live. It’s mind-blowing that Accenture couldn’t even deliver the responsive design and decent security features after receiving a lot of money from Hertz. I don’t know how complicated Hertz wanted their website and mobile application to be nor do I know how the office politics involved is. But based on the description of the requested elements, I have a feeling that a $2 million to a Vietnamese ads agency would get the job done.

U.S. Wind Energy Is (Finally) Venturing Offshore. “Capturing offshore wind in the U.S. has long been an uphill battle, with various stumbling blocks in the terrain. Objections from fisheries, skepticism from conservationists and tenuous support from tourism have all stalled development in the past decade. That is, until May of 2021, when the U.S. Department of the Interior approved construction of a sprawling wind facility several miles off the coast of Martha’s Vineyard, Massachusetts.”

Stats

In 2021, venture capitalists invested $14.8 billion into startups in Latin America. The nearly $15 billion was more than the previous six years of venture investment combined

Forests Now Cover 2% of Iceland, a 6-fold increase since the 1990s

Since 2012, the SEC has awarded $1.3 billion to 278 whistleblowers

63% of African American students in K-12 in San Francisco are chronically absent, compared to 46% Latinx, 20% White and 8.4% Asian

YouTube has 5,500 channels in the US with more than 1 million subscribers in 2021

Source: Sensor Tower