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I agree with Kristina’s concerns with the risks of building significant inventory, given the unpredictable nature of improvement in solar panel technology. I can also envision an extreme downside scenario, in which Sunrun builds up significant inventory of solar panels that rely on current technology, and then the technology improves significantly faster than expected. This will result in Sunrun having incurred the significant costs of excess inventory and then potentially not being able to sell and install the inventory because it is relatively more expensive or less efficient than updated technology. That said, I think an inventory build-up strategy may be one of the “least bad” options Sunrun has in this time of political uncertainty.

In addition to protectionist trade policies, I think Sunrun should be very focused on net metering policies and should remain in active dialogue with elected officials on this topic. In many states across the US debates about the merits of net metering and the appropriate economics that residential solar customers should receive for sending excess energy into the grid are ongoing, and many states currently do not have net meting agreements in place at all. The ability for residential solar customers to flow excess energy into the grid and be compensated for doing so is critical to make residential solar economic. I would be curious to see a comparison of the economic impact of the tariffs described in this paper to the potential impact of unfavorable net metering policies.

On December 1, 2017, EMC commented on Defending a Global Business Model in Turbulent Times :

I agree with your statement that Microsoft’s short-term solution (making statements against public policies) may not be the most efficient solution to the issue you describe. However, I do think that even if you don’t think Microsoft’s statements on these topics will help their bottom-line, it is still important for such large, powerful companies to speak up about these issues. I also agree with your point that Microsoft should look for more innovative ways to allow employees to work from a distance, at least in the interim while the isolationist policies remain in effect.

I am curious to know how Microsoft’s decision to remain focused on the long-term, and specifically their decision to build data centers in the UK despite the current political environment, is affecting their bottom-line. I would imagine that Microsoft felt the need to build a data center in the UK because of expected local data traffic on Azure. If the UK economy is significantly impacted by Brexit (e.g., if a portion of the finance industry that is currently in London migrates out of the country) the economic viability of these data centers could be significantly impacted.

Very interesting article. As mentioned by “USCA” above, I would be curious to know how the economics of Gotham’s produce compares to that of produce grown on a traditional farm. It seems that there are multiple areas of significant cost savings (less water use, more efficient/shorter transportation, use of solar energy, etc) – if Gotham could continue to optimize production costs such that they can sell produce at or below the level of the traditional food production industry, that would likely enable the company to expand into additional markets and expand rapidly. However, there are also significant upfront costs for Gotham to build new facilities which must be considered in the “breakeven economics.” For example, the Company recently received approval from the Rhode Island Commerce Board for $2.2 million in tax credits to build a new greenhouse in Providence (equivalent to roughly 10% of the total cost to build the facility) (1). While this is a positive sign (the Company is expanding into new markets and the public/government appear to be supportive) it also brings into question the economics of Gotham’s operations, and the Company’s ability to continue to expand without tax credits or other subsidies.

1. R.I. Commerce board OKs $2.2M in tax credits for massive greenhouse in Providence. Providence Journal. http://www.providencejournal.com/news/20171120/ri-commerce-board-oks-22m-in-tax-credits-for-massive-greenhouse-in-providence

On November 29, 2017, EMC commented on Rio Tinto: Be Prepared for the Flood :

I completely agree that given the impact mining companies have had on the environment historically, they should be held accountable for (i) minimizing the environmental impacts of new projects and (ii) minimizing the environmental impacts of their existing supply chain practices. However, I would be interested to know if it is possible for these steps to be economic for mining companies. Can the cost of making their operations less environmentally destructive and/or the cost of preparedness for future environmental events (storms, floods, etc) be outweighed by the potential benefits (i.e., lower remediation expenses, lower disaster recovery costs, etc)? Or will mining companies only take these preventative and/or corrective measures if they are forced to?

This essay clearly explains a problem (hospitals face high costs due to inefficient supply chains) and a potential solution in Cardinal Health. I would be curious to understand whether hospitals are receptive to Cardinal Health’s business model and eager to outsource these supply chain capabilities. If hospitals are not receptive, what are the key barriers to adopting this system, and what are the risks associated with outsourcing these functions? It is interesting that Amazon and Google are getting involved in the healthcare space – it seems to me, however, that Cardinal’s service, especially if it includes major networks through which hospitals are inter-connected into networks, should be relatively “sticky” once Cardinal has achieved scale.

This essay does a very good job of describing how Facebook, and all of the data and technological capabilities associated with the Facebook platform, enable companies to target consumers with specific advertising and promotions in a way that was not possible pre-internet. The essay mentions the potential for Facebook to expand the services provided and launch a marketplace, similar to Amazon, such that goods could not only be advertised, but actually sold, on the Facebook and Instagram platforms. While I think this is certainly technically/technologically feasible, and would provide a new source of revenue for the company, I wonder what impact this would have on Facebook’s brand and on its customers. I would be concerned with these potential negative externalities for two reasons. First, Facebook started as a social platform for people to keep in touch with their friends and to share personal life information (photos, status updates, etc). The Facebook/Instagram customer experience has already been changed by the degree of targeted ads and promotions on the website, and I worry that if Facebook further pushes this strategy they will ostracize their valuable customers. Second, consumer are growing increasingly wary of the amount of data that Facebook can collect and deploy for various reasons. I would worry that customers might be particularly concerned if Facebook was perceived to be using even more data to target customers and generate transactions in an even more direct fashion.