Andrew Serpa's Profile

Great post! I think it’s great that the textbook industry is finally feeling some disruptive effects.

I thought it was very interesting that you mentioned some online platforms are marketing directly to teachers rather than districts to get traction with their products. My question here is whether school boards still serve as a barrier to entry here? Specifically, I know that some districts centrally agree on curriculum that is taught in schools. Do McGraw-Hill and other big players have an advantage here by cultivating close relationships with school boards?

Another trend that I’ll be eager to watch is the growing democratization of higher education with online platforms. Do you think that these platforms have the potential to dismantle traditional school models, or will branded institutions stick around?

Thanks again for sharing!

Alicia, thanks for sharing! I think the issue of paying a “privacy premium” is a very important one. As many good drivers will “take the bait” and submit to monitoring, it will gradually make it more expensive for the average consumer to maintain the status quo.

More important, however, is your point on Progressive’s need to adjust to a changing insurance terrain. I applaud Progressive for flexing its innovation muscles to challenge the traditional insurer model. As the ratio of driverless cars on the road increases, all drivers will inevitably face increasing premiums to maintain privacy and control over their cars. What is uncertain is what role Progressive and other insurance companies will play here. What do you think the most successful insurance companies will do to adapt? You mentioned in your article that insurance companies should pivot to become product insurers rather than driver insurers – do you think the market for this will be sufficiently large, given the high bar that driverless cars will have to clear to be put on the road?

Thanks Brian. My views echo some of what Zach stated above. I think Instacart may be more successful than Webvan in a relatively small market of wealthy urban dwellers. It seems to me that Instacart will be most successful in places where grocery delivery has traditionally thrived, but unless they can drive delivery prices down substantially, I’m not sure that they’ll lure a significant amount of new users to grocery delivery.

Specifically, I would expect that many consumers who purchase groceries on a regular basis are looking for a less expensive alternative to eating out, making the additional fees charged for grocery delivery unattractive. Another concern would be the poor economics of grocery delivery in non-urban areas, making the value proposition even worse for a large swath of suburban consumers.

What do you see as the major opportunities for Instacart to gain new users, aside from those who already use traditional grocery delivery?

Jon, thanks for sharing. I think your article was spot on in capturing the potential of Nest to lead the way in terms of home automation.

There is a lot of overlap between your article and the one that I wrote concerning Smart Meters. I think that Nest is an important piece of the puzzle in pushing the Smart Grid forward, primarily by allowing consumers and utilities to cooperate through Demand Response. If Nest is given real-time rates from the utility (via communication through a Smart Meter), customers can pre-program their preferences for HVAC-electricity consumption based on price which 1) gives the customer more control over their consumption while 2) giving the utility an additional “degree of freedom” in meeting customer demand during peaks.

Ideally, this same concept would be applied to all residential electricity through the use of “Smart” products. However, I was surprised to see that heating and cooling already represent a full 42% of home electricity consumption! This makes the case for pairing of Nest with Smart Meters even more pressing. Do you have any thoughts on how the value of Nest changes with different rates of adoption of Smart Grid technology?

Great article! I’ve been following the use of pay-as-you-go solar installations for a while. Seems like they offer a lot of promise for developing markets, such as those in Africa. Here’s an old article about another interesting player in the space: http://www.bbc.com/news/business-30805419

My major question here revolves around the defensibility of this market. In the traditional utilities space, the large up-front costs associated with transmission and distribution and the highly skilled workforce required act as strong barriers to entry and provide long-term stability for utility companies. In this model, since the inputs (solar panels, ancillary equipment, and labor) are completely commoditized and customers are free to discontinue service any given month, I’m curious as to how the market will shake out. Would love to get your thoughts here.

Thanks for sharing!

Great post, Ben!

Really enjoyed how you broke down just how energy intensive brewing is. It is definitely a difficult process to make sustainable – from growing the inputs, to boiling the entire volume of wort used, to sterilizing all equipment involved, it is definitely a resource-intensive product compared to other beverages. In my own brewing I try to keep the process sustainable, but with poor economies of scale I end up using about 5 gallons of water to yield one gallon of beer (very embarrassing). It makes sense that these same poor economies of scale would work against smaller brewers.

To echo Emily’s point, the fragmented nature of craft beer (which is kind of the whole reason it is cool) makes it difficult to get the benefits of vertical integration in terms of operations. I’m curious as to whether craft brewers could form a collective such as we saw in National Cranberry to get some increased buying power for agricultural inputs. This may make it more affordable to source agricultural inputs sustainably.

Thanks for sharing!

Very interesting post!

It’s hard to point at the melting Artic as a positive for climate change, but given the shipping industry’s outsized contribution to greenhouse gases, it does seem like an enticing opportunity to make the best out of a bad situation.

Tagging on to Matt’s point about increases in variability with the use of Arctic routes – I would add that territorial disputes will likely play a role in Eimskip’s decisions on how best to approach its new routes. Specifically, there are conflicting claims between Canada, Russia, and Norway and US as to the ownership of the territories and waters surrounding the North Pole (see here for a brief overview: http://www.bbc.com/news/world-europe-30481309). As ice melting accelerates in this region, it will be interesting to see whether this region becomes an area of high strategic concern for these countries and what impact this has on international shipping.

Wow! Thanks for sharing this Tracy, I had no idea that the fashion industry had such a huge carbon-footprint!

In general, I think this speaks to a larger gap in consumer knowledge of true costs of clothing. For example, mass retailers such as Walmart and Target have conditioned consumers to expect “typical” prices for everyday garments well below $10 (see here for a quick search on Walmart.com: https://www.walmart.com/c/kp/tee-shirts), but these are predicated on miniscule labor costs which may or may not represent unfair trade practices (quick infographic for example here: http://www.cnn.com/2013/05/02/world/asia/bangladesh-us-tshirt/index.html).

Given that most customers have such low expectations for clothing prices, do you have any ideas for how to persuade the average consumer to “buy green”? From the article above, it seems like Reformation is targeting a more affluent customer base which may make a voluntary switch from traditional brands to more sustainable ones. Do you think consumer education or stricter regulations are the right way to go to have a broad impact here?

Great article!

I think you were spot on in your point about solar companies such as Sunrun being vulnerable to changes in regulatory policies. To take another example, SolarCity saw some huge swings in performance last year due to such changes. Late last year, on news that the ITC would be extended through 2022, the company’s stock soared by over 30% overnight. A few months later, however, the company had to cease operations entirely in Nevada entirely on news that the state would be terminating its net-metering program (see here for some highlights: http://www.investors.com/news/technology/tesla-cousin-solarcity-trims-2016-view-on-nevada-itc-effect/). In light of these challenges I think its a great move for Sunrun to ally itself with policymakers.

I agree with Emma’s comment above concerning the huge risks that Sunrun bears by running a “solar as a service” model rather than selling the panels outright. Do you have any sense for how investors are reacting to each of the two models?

Great article! Very interesting to see how a large IPP in Japan approaches the difficulty of integrating renewable assets into its portfolio. Really enjoyed your point about companies such as Mitsubishi not being able to take on the risk of these projects directly. In the US, many companies get around this by setting up independent entities whose sole purpose is to develop renewable assets so that they don’t carry these projects directly on their balance sheets. The independent entities receive “sponsorship” from the parent company (such as Mitsubishi) and debt from banks who offer viable rates on the condition that the company demonstrates that it has secured future revenues for its power production, most commonly in the form of Purchase Power Agreements (PPAs). Here’s an old article about how renewable project finance works in the US: https://www.wsgr.com/PDFSearch/ctp_guide.pdf.

One important piece of the equation in the US are the favorable investment tax credits offered on many renewable projects. I would be curious to know whether Japan has a similar framework?

Thanks for sharing!