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I think where is breaks down (or at least, not perfect yet) is in some of the ways Progressive defines good drivers. First, lower mileage means less risk of accidents, but this penalizes those who have to drive further to work. Second, driving at night makes you a riskier driver. Therefore, someone who is a good driver but has to commute far for a night shift might be hesitant to sign up for Snapshot. Ultimately, as the “safe” drivers sign up and get the premium reductions, those who are bad drivers or don’t sign up will have to pick up the excess premiums. Currently, the only measure of driving safety is hard breaking. However, Progressive and other insurers are looking at additional monitoring. But it gets back to the tradeoff that you and Christina mentioned- how much do we want our insurers to know?

I agree there is a very high bar to clear for driverless cars, but I think it is inevitable. Perhaps it takes 10+ years, but it is a very real threat to auto insurers’ business model. Perhaps best positioned will be insurers who sell property and liability policies to automakers and suppliers of the equipment. “Deloitte forecasts approximately $200 billion in personal-car-insurance premiums to hold steady for seven or eight years, then slide to about $40 billion by 2040. It projects about $100 billion of this $200 billion could migrate to product-liability insurance and coverage bought by ride-sharing businesses.”

Yes, the insurers do provide a “scorecard” of sorts, and let you check online how many hard breaks you have racked up. I’m not sure what safe driving coaching they provide but I would expect them to have resources dedicated on their website. Personally, we both found the buzz extremely frustrating, especially in contexts like you mentioned. Driving in the city, you have a lot more occasions where a hard break could be a behavior that is brought on because you are a good driver. I know several providers are moving towards more comprehensive monitoring to get a better picture of what is going on.

Great post! I had the same concern as Alan. My initial reaction is that the truck drivers would not like to have the devices installed in their trucks because they find them invasive and don’t want the device reporting everything that the driver is doing wrong. That is certainly the feeling I had when using my sister’s car, which had the Progressive Snapshot device to monitor driving behavior. Her device monitors hard breaking, and both she and I have found it frustrating. While it did make us more conscious of our breaking habits, it did not make us better drivers, and it was very frustrating anytime we had to break quickly in response to another car’s poor driving. In these cases, it sounds like Lytx’s system would have exonerated the driver. I think more important to truck driving is figuring out how to prevent fatigue on long rides and keep people alert/engaged. Does the company have any plans to offer their product to personal car insurers? Allstate recently filed a patent for cameras and sensors to detect distractions.

On November 20, 2016, Alicia commented on Disrupting Textbooks with Digital Content :

Interesting post, it reminded me of all of the painful textbook purchases back in college! I saw that McGraw Hill teamed up with Georgia Tech earlier this month to offer a free MOOC (Massive Open Online Course) for future applicants to earn college credit using their Smartbook technology. The course will be freely available through edX, the nonprofit online learning platform founded by Harvard and MIT. Smartbook is a digital version of a course textbook and actively tailors the content to the student. How do you see this product growing for McGraw Hill? I would be interested in seeing the price differential between a traditional textbook and the Smartbook- it may address the shift to digital consumption but not the threat of free or low cost teaching alternatives. MOOCs are another interesting avenue to explore, but given they are low or no cost, it does not seem like a huge revenue source.

On November 20, 2016, Alicia commented on Comcast combats cord-cutting :

Interesting post – I’ve been a cord cutter for 4 years, and don’t see myself ever subscribing again. As Mike mentioned, live events, specifically the NFL, are one of the few remaining draws to cable. Its interesting to note that the NFL’s overall TV ratings down about 11 percent from last season. If this trend continues, it would be less of an advantage for CableCos. This year, the NFL began streaming its games live on Twitter for free, and over 2 million people chose to watch this way. I agree that investing in the X1 platform and cloud DVR technology is vital to future success.

On November 20, 2016, Alicia commented on Instacart: The Digital Grocery Revolution :

Thanks Priya. Wholefoods invested in Instacart earlier this year. Has this created problems with Instacart’s other grocery partners? At some Whole Foods stores, Instacart has embedded shoppers with devoted checkout lanes and who then pass off orders to drivers. The investment from Wholefoods was a boost of confidence in the service which has been struggling to become profitable. They raised delivery fees and annual membership costs, and lowered pay for the shoppers. As you mentioned, its still a human capital-intensive business model, and according to the Economist, Instacart was “rumoured to lose around $10 on each order it fulfills.” I don’t see scale or a network effect fixing this model.

On November 20, 2016, Alicia commented on Moving away from the local grocer :

I have used FreshDirect for several years in New York City. Regarding concerns about product quality, yes you do lose the ability to select the “best” produce like you can in store, but whenever I had an issue with the quality, FreshDirect credited my account no questions asked. For me, FreshDirect solved two problems 1) Grocery shopping is time consuming – with e-grocers, I can shop while at work or in transit, and avoid carving out 1-2 hours a week shopping 2) Proximity to a grocer – I did not have any options less than a 10-15 minute walk, so if I did go to the grocery I could only buy as much as I could carry home, or have to pay for a taxi. E-grocers provide a huge value add in major cities where people don’t have cars and are crunched for time, but I don’t see them spreading successfully to less dense areas. As for the grocery delivery mode (Instacart) this model is struggling. Instacart has been rumored to be unprofitable despite raising delivery and membership fees. I like your suggestions that H-E-B not get too caught up in the move to digitization, and focus on the in-store experience while leveraging Instacart to provide more online exposure.

On November 7, 2016, Alicia commented on A spoonful of climate change? :

I agree with Molly- water scarcity is a huge issue facing a wide range of industries, and food manufacturers will certainly feel the pressure of climate change on their operating model. Kellogg led food makers in efficiency of water use according to a 2015 analysis by Lux Research of the Consumer Packaged Goods industry. Given that Kellogg operates such a resource-intensive business, a comprehensive water conservation strategy is needed to help mitigate the risks posed by a water shortage. Kellogg did include water conservation in its 2020 sustainability goals, and will work with farmers to use water and fertilizers more efficiently and protect their watersheds. It appears that some of these projects are also receiving federal funding.

Separately, I think it’s great that companies such as Unilever are considering a product’s lifecycle impact (the sum of environmental impacts caused by the product’s existence) and not just the raw materials and manufacturing processes. Consumer consumption patterns need to be addressed.

On November 7, 2016, Alicia commented on General Mills Takes on Climate Change :

Great post! Regarding General Mill’s goals to sustainably source 100% of their 10 key ingredients, how much progress have they made? I applaud them for setting these goals, but I wonder if supply can keep up with increased demand. I know in regards to organic food supply, demand has been increasing in the US and outpacing supply. Farms can not make the switch fast enough. I would imagine there is a similar issue for sustainably sourced ingredients (however General Mills chooses to define it) and General Mills is hampered by the speed at which its suppliers can convert. I would be interested in hearing how they expect this sourcing to impact their pricing and/or margin. Consumers would be willing to spend more on a product from a company that is committed to positive social and environmental impact, so I am not worried about an incremental cost, but General Mills will have to do a better job of associating sustainability with its brand image if it wants to capture those consumers.

On November 7, 2016, Alicia commented on The Unforeseen Cost of Fast Fashion :

Thanks Priya! Many prior comments referenced clothing recycling efforts and the need to change consumer consumption behavior. While some have applauded H&M’s recycling program, I don’t believe it does anything to fix the broader issue of sustainability and it negatively impacts local textile markets. The clothes that H&M collects are not actually recycled into new products; H&M is not creating a true closed loop system. Only 1% of the clothing that is collected can be recycled. (Something that is not told to the customers!) Daniel mentioned it above, but it does make H&M’s program appear “greenwashed” for the purposes of appearing focused on sustainability, and it makes customers “feel good” about donating. Secondly, more than 70% of the clothes donated globally end up in Africa according to Oxfam. Local textile manufacturers are unable to compete with these “cheap imports” from abroad, resulting in a collapse of the local textile industries and the corresponding jobs. Many countries were considering banning the import of second-hand clothes because of the negative impact to local economies.

Yes, H&M’s program keeps clothes out of landfills, but its business model remains in tension with sustainability unless it can focus its efforts on creating innovative recycling capabilities. For anyone interested, I recommend watching the documentary “The True Cost”

On November 7, 2016, Alicia commented on Nestlé: Conserving Water as a Strategy to Sell More Water :

Regarding the issues raised with corporations controlling water supply, this is a huge threat to Nestle’s business, and one I didn’t appreciate. Water scarcity has been identified as the biggest global risk to society over the next decade. I see this issue becoming more contentious in the future. Have any countries successfully blocked Nestle from extracting water? It seems like Nestle will be on the defensive here, and even if the legally own the groundwater rights, its going to be a public relations nightmare for them if they look like they are profiting from the shortage.

On November 7, 2016, Alicia commented on Dehydrated? So is Nike :

Yes I agree, rather than “forcing” suppliers to become more water efficient (and threatening to go elsewhere if not achieved), I see it as a partnership, where Nike provides resources to help farmers achieve greater efficiency. This could be done via a price premium, or an investment by Nike into the technology that will improve water efficiency (such as better irrigation systems.)

On November 7, 2016, Alicia commented on Dehydrated? So is Nike :

I agree completely with your point about coordinated efforts for washing requirements. I think a few clothing manufacturers (Levi’s comes to mind) are also focusing attention and resources on sustainability initiatives. Perhaps these like-minded companies can form a partnership to encourage more mindful consumption behavior. Since it won’t directly impact any members bottom line (at least in the short term, when water scarcity hasn’t been baked into their costs) these companies would have to be incentivized by the positive PR and customer goodwill that their sustainability efforts will generate. Very much a tragedy of the commons issue!

On November 7, 2016, Alicia commented on Dehydrated? So is Nike :

Thanks I did not see this post before, but I agree it speaks to Nike’s brand power and its ability to use it to push change.

On November 7, 2016, Alicia commented on Levi’s, Cotton, and Climate Change :

Good read – many people don’t think twice about how much water goes into the production of textiles. Exciting to hear that Levi’s is partnering with a startup to explore recycling. I think there is a lot of opportunity for product innovation using recycled materials, and customers seem to be receptive to buying products they know use recycled materials. Nike is one example of a company that is recycling waste in their new products and promoting as such. Separate from this partnerships, do you know how much recycled cotton Levi’s is currently using in its production? The 20% maximum dictated by quality standards sounds low but could still provide a lot of value if Levi’s is not currently recycling any material. I know many clothing manufacturers, Levi’s included, have programs where they accept recycled clothing, but most of that is donated, and they can have negative impacts on the local textile industries of the countries where they are donated. Would be great to see clothing manufacturers “close the loop” by using recycled materials directly in their own manufacturing.

To your first point, it seems that Levi’s could develop a similar partnership with an organization that will focus on crop science innovation for cotton. The major industry players could fund a cooperative partnership that would research on their behalf and work with cotton farmers to improve their harvest.

Lastly, I think Levi’s should also consider the consumer’s laundry habits when developing new products, since most of the water wasted during the jean’s lifecycle is actually during its care, and not production. Of course, this type of product innovation won’t directly help Levi’s bottom line, but water is a shared resource, and anything that can be done to change consumer’s behavior will help relieve global water stresses.