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Batman is a fan of tomatoes and is heartened by demand from is Nigerian friends!

Great post on a supply side intervention that creates a “buffer” to smooth out infrastructure challenges in the marketplace. Converting tomato to paste arguably solves for an information asymmetry in market demand and pricing for farmers, given that there is a ready buyer in place now. My one large concern is that Tomato Jo’s is distorting the marketplace for raw tomatoes. Often times, public agencies which play a similar role end up “promising” price floors for fresh produce and end up with large amounts of perishable inventory. With rise in yields, Tomato Jo’s has to be able to keep buying larger harvests every year which requires working capital investment. Perhaps more concerning is finding a distribution network for its finished products – if infrastructure remains a challenge, then the market risk is now essentially passed on to the processor without actually removing the risk.

On December 14, 2015, Batman commented on Patagonia: A Focus on a Sustainable Model :

Mr Saadine, Batman would like a Patagonia vest to prep for a Boston winter.

Great post on incorporating socially conscious values into its business model. I am unsure however as to how the brand keeps growing without compromising fairness standards on labor and working conditions given the disintermediated supply chain. With most of apparel being sourced from developing country factories, reputable competitors have struggled to ensure that their brands are manufactured in labor compliant working conditions. A large part of this is driven by growing demand for a particular brand and shorter leads/life cycles for each design. With Patagonia at the brink of such growth, what is the brand doing to ensure equity along its entire supply chain?

On December 14, 2015, Batman commented on Hello Alfred: Your new best friend when life is a clutter :

Easy Carl. Batman is not a fan of activist investors hanging around the hoop – at least not at this stage of Alfred’s growth!

To your point though, the pricing model is two tiered – $32 per week for one visit and $59 per week for two visits by the assigned butler. Assuming each visit/run takes about an hour, Alfred makes about $30 per hour per butler. The breakdown of this revenue in covering expenses is not public but I assume that Alfred could be paying up to $20 per hour to incentivize and retain the right butlers. If that is the case, Alfred may not be necessarily “burning” VC cash but is is able to cover the largest component of its cost structure – butler pay.

On December 14, 2015, Batman commented on Hello Alfred: Your new best friend when life is a clutter :

Mr. Wu Hao, an HBS case on Gotham inspired Batman to become the leader he is today.

On to your thoughts – Alfred hires local community members, typically stay-at-home parents who have spare time (when kids are at school). The individuals are paid per chore as well as per account. The model for now does not rely on socio-economic disparities but rather on capturing idle time that folks in a neighborhood may have and would like to use to monetize. There is also a strong non-financial incentive to Alfred’s hiring model – it allows butlers flexibility to choose the time they want to work and take on as much or as little work load as possible.

You do rightly cite trust as a major driver of this model, explaining why it may be difficult to take off in places such as China. Alfred itself is experimenting in building up this trust gradually in its core markets and relies heavily on hiring and motivating the right butlers. Perhaps if Batman has to save Beijing one day, Alfred might come along…

On December 14, 2015, Batman commented on Hello Alfred: Your new best friend when life is a clutter :

Robin – as always, you prove to be a trusted counsel. Geographic expansion will likely be limited as population density as you identified correctly in your response. I would liken this to what several other on-demand e-services such as Uber and Instacart may face. You understandably need high density for the suppliers (butlers, drivers, grocery-deliveries) to efficiently batch orders and disburse/deliver in a short span of time.

I do think though that the business model need not expand to low density locations and may remain a better urban fit for now.

On December 14, 2015, Batman commented on Unpacking Trader Joe’s :

JJ – you unpacked TJ very well!

Great analysis on the store’s competitive advantage and comparative metrics. Along with EDLP and customer-centric focus of the retailer, I would think a key driver is their choice of retail locations. (1) To that end, how would you characterize their site selection process and what are the attributes that TJ benchmarks for in new markets?

Similarly, the closest comp to TJ appears to Whole Foods and potentially local mom-n-pop groceries.
(2) What do you think however is the threat from on-demand grocery distributors such as InstaCart and Peapod to TJ’s business model? Do the friendly service and satisfied employees benefits get mitigated by a growing demand for home deliveries by the same customer segments?

Looking forward to a location soon in Gotham,