DB's Profile

Steve, your post really highlights how difficult it can be to respond well to a competitor’s actions, especially in a rapidly evolving marketplace. UPS clearly gained the upper hand in the e-commerce space, and in doing so forced FedEx to react. While the acquisition of Kinkos provided the necessary touch points that FedEx needed, but their timing couldn’t have been worse. Your observation (and Jane’s comment) about how this deal looked good on paper but failed in execution points to the difficulty of “seeing around corners” as Jack Welch says. The move toward digital communications clearly undercut Kinkos’s business model, and many of the synergies that FedEx hoped to realize. Sadly my experiences at Kinkos have been similar to Adam’s, and it appears that their under-investment in technology at their stores has made them grossly behind the times and bordering on obsolete. Recognizing how unaligned these models have become, I have to believe FedEx will be looking to either significantly shift Kinkos’s model, or exit the business.

The concept of “first principles” is very interesting. When taking on “big” problems like space travel, I would imagine this approach can be very effective. At what point do you think SpaceX will relinquish control of specific aspects of the project – such as outsourcing navigation technology or rocket design? I realize Elon likes to maximize control over the projects he takes on, but for something like this to scale to his ultimate goal of allowing humans to become multi-planetary, he may have to share portions of the value chain. I wonder put part of the value chain Elon views as being the most valuable over the long-term and how that affects his investment decisions today? Obviously they’re focused on perfecting the launch sequence and enabling the recovery of the rocket system at this initial stage of development. In the longer term, will this be where SpaceX hopes to play, or will it be in space travel itself? As compared to automobiles and Tesla’s initiatives there, it will be interesting to see what synergies Elon attempts to realize.

Great example of a company that has aligned its business and operating models. To your point at the end of your post, I would be very curious to see how things play out as a result of the recent health scare. I think their zero franchise model will enable them to rebound more quickly as they can effectively drive change throughout the organization and have confidence that the changes are being implemented.
Bruce raises an interesting point about how they incentivize their operators. Without a healthy equity stake, I would imagine it would become difficult to keep top-performers within the company as they scale. Perhaps they quickly promote to regional and general management positions that then oversee their stores to ensure standards are being upheld. I have to imagine the fast-casual model still has tremendous upside and Chipotle is well positioned to benefit from this growth.