Denzil – great post that has generated some great comments for discussion.
I’m interested in the NYT quote you cited: “IFTTT and its partners are hedging their bets on a different philosophy, where interconnected devices are ultimately good not only for consumers, but also for the companies.” I think incorporating IFTTT into devices and platforms provides an incredible opportunity for firms to understand exactly how consumers are using their products. The key here would be somehow giving the producer access to the aggregate recipe data from its users.
For a hypothetical example, Amazon may have strongly believed that consumers would use Alexa mainly for music playback and invested to make this feature more robust. However, after reviewing IFTTT data, they may have found out that customers disproportionately use it for home security applications. Armed with this knowledge, Amazon could then prioritize future updates for Alexa based on actual usage and perhaps even use the recipe data to drive differentiation across its product line. My only concern would be that consumers may be hesitant to share THAT much data about their routines and device interaction behaviors. Companies like Amazon would need to ensure certain privacy measures and demonstrate that sharing the information would lead to tangible benefits for the customer.
Robby – nice work. In my opinion, the entire industry of pest detection and eradication seems outdated, with lots of friction points and plenty of room for additional technological innovation on top of the solid steps already taken by Terminix.
The process of finding an infestation, calling an exterminator, having him set traps or schedule fumigation, and then verify the results is fundamentally a reactive process and may not even get at the root causes of a bug problem (e.g. moisture buildup in structural voids). I wonder if Terminix could introduce some kind of inexpensive, digital leave-behind sensor to track the effectiveness of the eradication program and monitor for signs of re-infestation. Another option might be to integrate a pest detection system into “smart home” technology like GoogleHome or Apple’s HomeKit. Terminix stands to benefit from supporting this kind of product, as it could result in pro-active extermination contracts that don’t rely on residents physically locating a pest before scheduling an appointment. I wonder how many people out there have pest problems they don’t even know about? Probably more than we’d like to know, but Terminix would be an ideal consumer of this data.
Quinn – solid post on a topic that’s becoming increasingly relevant.
Outside of the technological and regulatory barriers facing widespread adoption of blockchain systems, I wonder to what extent perception issues play a role. I’d be concerned that “blockchain” as a concept will continue to suffer – at least in the near term – from its close psychological association with bitcoin. Unfortunately, bitcoin carries with it negative connotations related to its use in illicit darknet transactions, drug trafficking, hacking scandals (e.g. Mt. Gox), and the much-publicized suicide of First Meta’s CEO, Autumn Radke.
I see some parallels to Apple’s elevating of the mp3 through the original iPod. Until its release, mp3s were tightly connected to music piracy and illegal file-sharing in the public imagination. Only through its association with a high-profile, credible company like Apple was the format legitimized. Do you think there could be a similar partnership in the financial (or other) industry that could strip blockchain of its problematic ties to bitcoin? And does Digital Asset Holdings have the name-check to do it?
Doug – great post.
Panoptix seemed like the next logical step in building automation technolgy and I’m interested to find out more about why it failed to gain traction. Data ownership, as you pointed out, seems to be the key sticking point. Tenants, building managers, BAS operators, third-party developers and even upstream providers like utility companies will need to come to some kind of agreement as to who has access to what data and for what reasons. Industrial control firms seem to rely on a vertically integrated structure to grow and remain competitive. What’s different about Schneider’s EcoStruxure? And do you think it’ll be able to succeed where Panoptix failed?
It wasn’t mentioned in your post, but I’d be curious to know how much interaction there is between companies like Johnson Controls and public sector leadership. It seems like there’d be some natural synergies there to be unlocked – especially as cities increasingly transition to “smart” grids. Rather than reinventing the wheel to understand where power demand is located geographically and temporally, grid designers could leverage and integrate existing systems like those provided by JCI to improve operating efficiency and reduce environmental impacts.
Section I: I was grateful for the opportunity to share my post in class today. After class, Fangfang gave me some outstanding feedback on a key issue that warrants additional attention, clarification, and (I hope) debate. After following up with her, we agreed to post our conversation here.
FANGFANG: Thanks for your sharing during TOM session on climate change to US navy task force. Really appreciate that. However, there is one comment you mentioned about what China is doing in South China sea that makes me a little bit uncomfortable. When you say while US, Russia and other countries are negotiating on resources in Arctic region, China is “basically taking care of everything in South China Sea”. For me, the comment is more like a personal opinion. But I think a more specific and fact-based comment about What China is doing in South China Sea will trigger a more objective perception from other section mates on my country.
To be honest, the sovereignty disputes of China with other SEA countries also trigger lots of debates within China. I am happy and curious to understand US perspective and is more than happy to offer some “the other side of story” if you are interested as well. The intention for me to bring up this feedback is really to have a transparent communication and don’t hide feelings. Please do let me know your perspective and feel 100% comfortable to tell me about your thoughts.
CHAD: Thanks for reaching out! I actually tried to be sensitive to that exact point, but it appears it didn’t come out exactly right and I appreciate you letting me know. This is an extremely nuanced issue and really tough to capture in the two minutes I had – especially when it wasn’t the main focus of my post.
What I really wanted to get across was the potential for international dispute in large, resource-rich maritime areas where multiple countries have competing claims. I think it’s correct to say that the US took on the role of guarantor of freedom of the seas after WWII more from a self-interested, practical standpoint – not from any kind of position of moral superiority. I was hoping to highlight the fact that climate change is just one of many factors putting strain on that position and perhaps even challenging its continued utility.
I’d even go so far as to say it’s inherently hypocritical that the US is attempting to enforce a standard (UNCLOS) which we ourselves haven’t even fully ratified. Given that and other factors at play here, I tend to believe that China’s actions in SCS are rational and justifiable. I just worry that the “fundamental tension” here (thanks, Michael Michael!) holds the potential for dangerous miscalculations from both sides.
Tarunika – love this piece.
As we’ve discussed several cases focusing on India during the semester (Narayana Hrudayalaya healthcare, Nalli saris), you and some of our other section mates have pointed out that there are vast differences – linguistic, cultural, political, etc. – across India. Some (like neighboring Gujarat) still have prohibitions on alcohol consumption. I’m wondering how these differences would factor into Sula’s strategic calculus when considering outsourcing their contract growing to neighboring states. Do any of these differences result in significant barriers to interstate commerce in India? And if there are, how would they impact Sula’s operating model – specifically it’s ability to sustain and grow the oenophile subculture it helped create?
Pat and Ward – thanks for the comments! Pretty ironic (in a fatalistic sense) that we’re using the fossil fuel-induced melting of polar ice as a way to get at EVEN MORE fossil fuels…
Kamoy – great post. And I agree that a world without chocolate would be unbearable.
You noted that most cocoa comes from small, family-run farms and that this presents challenges to education and greater productivity. Have there ever been efforts to consolidate or industrialize cocoa farming? If not, I’d be curious to know why. My guess would be that governments in these countries try to protect these small farmers for political and cultural reasons, perhaps in an effort to maintain traditional economic structures and limit the effects of globalization. Still, it seems like Mars could benefit from some vertical integration in the supply chain and deploying their substantial capital resources toward stabilizing and/or increasing the availability of the crop around the world.
From an accounting perspective, I also wonder how Mars accounts for their outreach initiatives to teach and equip these small farmers. Do they receive preferential treatment or discounts on cocoa crops? Does Mars simply write-off these efforts as a cost of doing business? Or are they viewing it as an investment in future yields? My intuition is that it’s the latter, but I’d be curious to know your thoughts on these questions. As with many climate change initiatives, I sense a tension between altruism and financial self-interest.
Amrita – great post about one of my favorite companies.
I had no idea that Disney had approached Admiral Papp, USCG (ret.), and the Arctic Council to capitalize on the popularity of “Frozen” in order to educate and inspire a new generation of climate change activists. The partnership makes sense – as far back as World War II, the US government has had a long tradition of working with Walt Disney Productions to produce short films and cartoons to support everything from the war effort to financial responsibility . Releases have ranged from navigational training aids for the Navy to reels promoting the benefits of paying income taxes to everyday Americans. However, there is a darker side to the relationship: Disney infamously produced anti-German and anti-Japanese propaganda that, although I’d argue that it fulfilled a necessary purpose at the time, would be wholly unacceptable by today’s standards.
After following up, I was disappointed to find out that Disney decided against producing “Frozen”-themed PSAs to inform younger audiences about the risks of climate change. Papp was apparently told: “Admiral, you might not understand, here at Disney it’s in our culture to tell stories that project optimism and have happy endings” . Though I understand why Disney might be a little gun-shy about collaborating with the government after its experiences during WWII, the initiatives underway in their parks indicate that they’re sensitive to the changing climate. With that in mind, do you think large companies like Disney still believe in the notion of civic duty? Or do you think their sustainability programs are more internally-focused on issues like corporate image and cost-cutting? Personally, I think the crossover makes sense and it’s much easier to reach the “happy ending” when people both informed AND entertained.
Doug – great post.
Like Ken, I too remember O’Malley making these points and the subsequent ridicule he faced. To me, the politicization of climate change in the United States stands as a major (but not insurmountable) obstacle to implementing such a large-scale effort. Although the Department of Defense (DoD) enjoys a degree of autonomy as part of the Executive Branch, its funding is ultimately determined by the Congress. To its credit, the DoD has used that latitude effectively: earlier this year, it promulgated a ten-year directive that required climate change to be considered a strategic imperative . President Obama, too, released an Executive Order (EO) along the same lines.
However, with prominent GOP lawmakers, thought-leaders and even its presidential candidate openly mocking these actions as “delusional”, I can easily imagine a scenario in which a defense spending bill is held hostage over the military’s climate change initiatives. Or, worse still, a Republican president rescinding the EO and directing the SecDef to abandon such efforts. When an entire political party dismisses the entire notion of climate change altogether, I’m not sure how you build the governmental consensus necessary to fund a new “Manhattan Project”.
For that reason, I think your idea of nesting the project within the larger global counter-ISIL coalition is a smart move. Not only can you lean on the broad consensus outside the US that climate change is a real, existential threat to the international order, but you’d be able to rely on a Democratic President’s relatively free hand in foreign policy to see it through.
Ken – solid work!
Have you been tracking Patagonia’s roll-out of its new “natural rubber” wetsuits ? These new wetsuits highlight some of the key issues you laid out in your post and raise some new questions.
Long story short: traditional wetsuit materials like neoprene and newer replacements like “geoprene” are derived non-renewable resources and petrochemicals that contribute to climate change and other adverse environmental effects. As a solution, Patagonia worked with a company called Yulex to develop a wetsuit made from Forest Stewardship Council (FSC) certified natural rubber. They claim the manufacturing process emits up to 80% less CO2 and that the wetsuit itself actually performs better than its neoprene competitors. They’ve also “open-sourced” the technology, manufacturing process, and supply chain data on the rubber in the hopes that other companies will adopt the material without having to spend time and energy on R&D . For me, this seems as close as possible to an altruistic motive, as sharing this tech could undercut Patagonia’s competitiveness and profitability in the category.
As a smaller player in the surf segment, do you think Patagonia will be able use this new product to apply the “external pressure on the…industry” that you described? Or – to Ryan’s point about their sympathetic customer base – will they be able to punch above their weight in this category due to a target market that’s sympathetic to their eco-friendly cause?
 “Yulex Guayule Rubber.” Web. Nov. 2016. .
 Hansman, Heather. “Outdoor Gear Companies: It’s Time to Open-Source Your Technology,” Outside Magazine, 31 Oct 2016. Web. Nov 2016. .