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On December 1, 2017, CVL commented on Hubble Contacts in an Era of Isolationism :

I agree with the comments above that it’s unrealistic for Hubble to build its own factory – and further, I think this takes them outside the core of what they are trying to do well and differentiate on, thus making it unwise from a strategic perspective. On the point of “what they are trying to do well”: I think Hubble is still far to early stage to be worrying about the what-ifs of isolationism. They are not yet established enough to even be sure they’d have to deal with adverse regulations in 3, 4, 5 years, and they are far too small to fight that fight alone. If I were them, I would put this issue on the very long-term radar, and in the meantime focus on growing and gaining scale as fast as possible.

On December 1, 2017, CVL commented on US Isolationism Takes Flight to Ground Bombardier :

To consider in light of Malcom’s comments on monopolies above — but what if lack of competition actually *slows* innovation (Boeing would know it always has the best product, regardless of R&D investment or advancements made), further limiting the impact these companies can have on humanity? Of course there are other factors that drive innovation (for Boeing, demands of its government contracts, for example) but competition is an important one, and I don’t think protecting the monopoly would necessarily have the benefits you describe above.

On December 1, 2017, CVL commented on Cuba Libre: Airbnb’s Approach to Diplomacy in Cuba :

Though I don’t know if Airbnb alone can dismantle the last remnants of the Iron Curtain (one can hope!)… I do think Airbnb has a fantastic opportunity to push the envelope for humanitarian and diplomacy gains. I think Airbnb’s typical customer – younger, tech early adopter, experience-driven and one that enjoys connecting with new and different people – is a prime candidate for Cuban travel. I’d also hypothesize that this customer is less likely to be mentally dissuaded from traveling to certain countries due to isolationist rhetoric and policies (i.e., there won’t be lasting “Trump effects” on this population’s desire to travel to Cuba). So I agree it’s a great opportunity and one they should continue to invest in – and market heavily to support their overall brand image.

On December 1, 2017, CVL commented on Cotton in footwear and apparel manufacturing :

I agree with U. Bolt above that Nike’s investment in climate change cannot be limited to minimizing/optimizing raw material usage. On the point of transportation – how will Nike address its climate impact as it seeks to shorten lead times? Arguably the easiest way for manufacturers to decrease lead times is by choosing air freight (delivery in only a couple days) over vessel freight (delivery by ship that takes several weeks). This has cost implications of course, an incentive to not immediately switch to the higher emissions method of transport. But I do wonder whether Nike is targeting raw materials usage because it is the highest impact area / biggest area of exposure, or whether it is simply the easiest for them to tackle without significantly increasing COGS…

In either case, it’s a good place to start!

On December 1, 2017, CVL commented on Equifax – lessons to be learned about online security :

To your question about how companies should address issues like this: A theme I see with the hacked companies you mention is that they didn’t seek to add protections above and beyond their view of the baseline amount – and that came back to haunt them, especially when their view of the baseline amount was faulty (like Equifax’s lack of a robust firewall). I think one of the important ways for companies to handle the fallout of security breaches like this is to be able to tell their customers all the many defensive mechanisms they did have in place ahead of time. Even when they fail to stop the attack, this would give them an advantage for retaining/regaining consumer trust. The companies hit the hardest are the ones that didn’t seem to even try to keep consumer data safe, and those who don’t adequately or quickly acknowledge the problem – just like Equifax.

On November 30, 2017, CVL commented on Walmart: Reducing Carbon Emissions by a Gigaton :

Reza, I don’t think your view is cynical at all – the alignment of incentives to reduce emissions and increase efficiency (lowering costs) is great!

Soumaya, as you mention, these issues are increasingly front-of-mind for consumers. I believe Walmart has the opportunity to further reduce its impact on the environment AND gain credit from consumers for its actions if it actually targeted some efforts at consumers. Suppliers/partners aren’t the only contributors of Scope 3 emissions – consumers are too. We drive to the store, we make ecommerce purchases one item at a time (forcing split shipments)… if Walmart were to spend more on marketing to inform consumers of all it is doing to be greener and the ways they can help, it would both improve its brand image further and increase opportunities to count avoided Scope 3 emissions.

Great post! Another take on the economic viability question – this may not actually be critical to justify the investment in Speed Factories. It seems to me that the benefits to Adidas of Speed Factories (at least in the short- to medium-term) are marketing and R&D. If this project is thought of as a high-tech innovation lab, as opposed to the early stage of a full-scale production facility, then economic viability isn’t a determinant of success. One justification for viewing it in this way (as a capital-consuming innovation lab) is that the value proposition of the Speed Factories (small batch, highly customized shoes) doesn’t really match the customer promise for Adidas’ main customers (mass production for mass retailers – Adidas and Nike are wholesalers much more than direct to consumer retailers).

Their wholesale customers want shortened product lead times, that is for sure. But from what I can tell, these Speed Factories aren’t addressing mass production lead times, and are therefore innovating on a sliver of the business, and could be completely justifiable from a test and learn perspective even if never economically viable as currently envisioned.