DrewJohnson

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I disagree with Katie, the model is currently inefficient as Sotheby’s serves as nothing more than a middle-man making the market less efficient. With the rise of the digital age, the role of Sotheby’s has changed from determining provenance and value to providing a service and making a market. As technology continues to penetrate these historically ‘market-maker’ driven industries, Sotheby’s is faced with a challenging predicament: adapt or slowly fade away. Given their role, name recognition, and Rolodex, I think Sotheby’s should opt for the former and partner with eBay to build out an entirely digital experience while leveraging blockchain technology to systemically catalog the entire art world. By creating the master catalog, Sotheby’s can help to create a marketplace for art that efficiently matches buyers and sellers. Blockchain can serve two purposes: determining provenance and authenticity, while maintaining the privacy of buyers (something very important to large collectors). Given that privacy is of the utmost importance for many buyers, it is logical for Sotheby’s to adopt crypto-currency as a further means of protecting buyers’ identities.

To further cement Sotheby’s role in the art market, I think they should also pioneer the first art initial coin offering (ICO). By purchasing a prominent piece of art and launching an ICO, Sotheby’s could establish itself as the future of the art market and provide legitimacy to a profound, yet oft misunderstood asset class of the future. Through the ICO, individual collectors could purchase a portion of the total value of the underlying work (initially set by Sotheby’s). The ownership would benefit the individual by allowing them to participate in any appreciation of the artwork’s value (which would be determined by an efficient market, led by Sotheby’s), while society could benefit by allowing the work to be displayed at a museum for all patrons (and owners) to enjoy, rather than sitting on someone’s mansion.

ABI has done an incredible job establishing itself as the leader in the global adult beverage industry. Yet, with great power comes great responsibility. As the leader, other firms and the broader global market, looks to ABI to set standards and push for more sustainable solutions for producing beer. In addition to the environmental benefits, it is hard to imagine that ABI would undertake such broad measures, especially given the presence of 3G Capital as a large shareholder, without substantial projected economic benefit.

One interesting development has been the launch of ABI’s startup incubator ZX ventures. One of the ZX investment mandates is to explore how ABI can push beyond traditional brewing and create new revenue streams from their existing business. I loved one idea that was recently funded (which they discussed at their company presentation) which utilizes spent grain. Canvas, a startup launched out of ZX in 2017, utilizes fiber- and protein-rich spent grain from ABI’s breweries to develop a plant-based protein shake. This is a clever use of the grains, which historically had been sold at steep discounts to farmers to be used as livestock feed.

Check out Canvas at this link: https://www.bevnet.com/news/2017/grain-gains-canvas-spins-beer-byproduct-plant-based-protein

On November 24, 2017, DrewJohnson commented on Autonomous Trucks – Industry Savior or Environmental Threat? :

What an incredibly timely article! On November 17, Tesla unveiled its first electric semi-truck. One of the first customers: JB Hunt. The point you raise is an interesting one, by removing one of the costliest elements of transportation, the driver, supply chains could become much more cost effective. Yet, the paradox is that by making supply chains more cost effective, this could entice transportation behaviors that are destructive for the environment. In an age where the populous is shifting from buying in baskets to buying in eaches, the impact could be magnified exponentially. Enter Tesla. When Elon Musk unveiled the electric semi-truck, skeptics were quick to point out what would most likely be a price point that would make the large scale purchase cost prohibitive. Yet, Musk recently unveiled that the the trucks would retail for $180,000. This is incredible as the truck is one of the most aerodynamic vehicles on the road and offers a range of 500 miles on a single charge. I think JB Hunt should take a stand and bet big on these electric semi’s (that will almost certainly offer Tesla’s autopilot mode) and plan to replace its entire fleet with these trucks over the next 10 years. In an industry plagued by a reputation of destroying the environment through carbon emissions, JB Hunt could emerge as a leader and usher in the next generation of technologically-enabled, environmentally-friendly supply chain.

On November 24, 2017, DrewJohnson commented on Breaking the walls with 3D printing :

This is an incredibly interesting topic: using technology to overcome protectionist moves. However, what seems like a “simple” solution could be problematic from both a cost and taxation perspective. I think GE could successfully scale a global 3D printing and production organization, but the costs may simply outweigh the benefits, especially for a company going through a total transformation. Even if GE could afford the upfront investment for several of these industrial-grade 3D printers, I think the sourcing of raw materials/inputs would continue to pose an issue in a protectionist environment. Furthermore, my fear is that the sharing of IP across borders would introduce the additional complexity of IP licensing and transfer pricing, and with the focus on closing corporate loop-holes (GE has been a notorious user of international tax planning) both in the U.S. and abroad, this lofty program may not make “dollars and sense”. I do believe in the future of 3D printing and its industrial use, but perhaps GE is simply pushing too hard to get ahead of the curve.

While there is no doubt that this situation could escalate into a destructive situation in terms of both potential economic (for ETP and other U.S. pipeline companies) and environmental impact (e.g. Mexico returning to the use of coal), I think regardless of what happens with NAFTA, Mexico and the United States will reach some sort of bi-lateral trade agreement. One of the potential interesting responses to this protectionist move would be the acceleration of production and exportation of liquefied natural gas (LNG). LNG itself is disruptive to the natural gas market, as it enables a commodity once bound to a pipeline to be loaded onto tanker ships and transported across the globe. With the glut of natural gas on the U.S. market, one can only wonder about the potential benefits of expanding access to cleaner energy to developing markets and removing Europe’s dependence on Russian energy exports (Lithuania and Poland were the first European nations to take advantage of the rise of U.S. LNG). While I firmly support open and free trade, perhaps even in the “doomsday scenario” of a full NAFTA breakdown, there may be a silver lining.

On November 24, 2017, DrewJohnson commented on Amazon Dominating Competition with Tech-Driven Supply Chain :

Regarding the U.S., I think this is a fascinating debate. The issue remains last-mile delivery, and as we’ve seen with the recent announcements by Walmart (acquiring Parcel) and Amazon (partnering with Kwikset to develop Prime exclusive door systems for in-home delivery), no one seems to have cracked the case on how to solve for not only the immense cost of the last mile, but also how to best serve customers. I think one other interesting phenomena will be how both Walmart and Amazon (Whole Foods), utilize their physical store assets to deliver experiences and savings customers want. Walmart recently launched a discount for items ordered online and picked-up in store. I anticipate Amazon will launch something similar in their Whole Foods locations.

The Chinese market has its own challenges and fierce competitors. As Levent mentioned, Alibaba is an incredibly strong competitors that rivals Amazon’s dominance in the U.S. However, one other competitor to keep an eye on is Tencent. Through its WeChat platform and ownership stake in JD.Com, Tencent could be poised to give Alibaba a run for its money. In my opinion, even though it may be early in the Chinese eCommerce game, Amazon has fallen behind and should seek to partner. As we’ve seen with other large companies trying to take-on local competitors (Uber vs. Didi Chuxing), often times the local incumbent brings too much expertise for foreign competitors to gain traction, often leading to massive losses.