Hugo BR's Profile

Great read, Dan. The challenge you highlight is increasingly complicated through the company’s new private equity ownership structure. In making their decisions going forward, the owners must weigh both their own return targets (which are constrained by shorter investment horizons) and the growth attractiveness for prospective buyers in the future. Is the company more attractive if it acquires many businesses and highlights its capabilities as a consolidator? Or is it more attractive if there is universe of potential/un-tapped acquisitions that can turbocharge growth going forward? As you highlight, Platinum probably decided that integration and synergies were the priority, and that the next buyers can worry about making incremental acquisitions. At the end of the day, bolt-on acquisitions are challenging and usually high risk. They require competent management teams and a unified vision for the new organization. In my limited work experience, I’ve seen this strategy work well, but I’ve also seen it fail spectacularly.

Interesting read Natalie. Frankly, until I read this post, I had completely forgotten that Foursquare still existed. Coming from NYU, the founder’s alma mater, I was proud to be one of the early adopters of the app. At first Foursquare was a novelty, and many of the company’s growing pains were quirky and charismatic. I enjoyed being the mayor of a few of my favorite hangouts near school, but I remember how quickly the app became boring, repetitive and frankly, annoying. I appreciate that the company is trying to pivot to data, but such a move only works with scale, and considering other modern apps and tech, the company’s data is no longer unique. Based on rumored user figures, Foursquare is struggling to grow. It appears that users, just like myself, have left the app, and that the company is not attracting many new users as people no longer appreciate the company’s services. These troubles/rumors seem to be reinforced by the leaving of the founder/CEO in January of 2016, as the valuation has been steeply declining.[1]

[1] Nick Statt, January 14, 2016, “Foursquare’s co-founder leaves CEO role as its valuation declines sharply,” The Verge, http://www.theverge.com/2016/1/14/10772282/foursquare-dennis-crowley-new-ceo-jeff-glueck-value-drop, accessed November 2016.

Great read Alex. A year or two ago I started noticing these BigBelly trash machines popping up in Manhattan and Brooklyn, where I used to live. When they were clean and new, they were delightful, and an incredible upgrade to the city corners. However, after six months the machines were already bruised and battered, and for the most part they were filthy – and this highlights a challenge presented by these new machines. With new technology comes the need to train employees in how to maintain and clean them – something I’m not sure the public budget can afford. Furthermore, whereas the old trash bins were low maintenance and low complexity, I could see these new machines requiring more employees to service them. Again, I doubt that the already cash-strapped NYC public budget would be amenable to that investment. Lastly, I wonder how challenging and expensive it is to maintain these BigBellys and what they will look like after a few years of abuse (doubtful that NYC will stay committed to maintaining them).

Interesting read Danny. I echo Jorge’s comments on the actual functionality of the light bulbs. I question whether their suite of services are more of a gimmick, rather than an actual, incremental utility for the user. I think the ROI will come from the energy savings, but this is hard for a consumer to both understand and tangibly feel. Most buyers won’t do a DCF analysis to conclude that these bulbs will save them money over the next ten years through less energy usage. Furthermore, unless users change all the lights in their home, which might be prohibitively expensive, the energy savings from switching won’t be material. I’d argue that the energy savings Jorge felt from buying three of these bulbs wasn’t visible in his utility bill. In fact, energy usage might have been worse considering the usage/learning barriers between him and his wife.

Interesting read Jordan. Your comments around the actual “ownership” dilemma in eSports were particularly intriguing and it is, in my opinion, the biggest risk to the concept. I’d be hard pressed to argue that Activision doesn’t want to monetize these tournaments more directly going forward. Sure, there are exposure benefits to these tournaments, but if I were a public shareholder of this company, I’d push to see licensing fees from these events (or something to that effect). Seems like low-hanging, high-margin fruit.
Going forward, I’m interested in seeing how eSports translate into high school sports. I can imagine that one day there might be kids walking around with varsity jackets that have eSports patches on them. Which makes sense, I think. Considering that eSports require skills, which can be improved and trained over time, and some people are inherently gifted at these games, much like physical sports.

Great read. Reading this article made me think of countries such as Israel who have managed to wrestle growth out of some of the most inhospitable agricultural conditions in the world by being creative. In the Israeli’s case, it was the result of unique irrigation practices, technology that has been successfully exported to other countries. Similar thinking could help not only Olam, but Nigeria as well. But, much of this innovation has to be driven by the government since it frequently requires significant upfront capital investment. I would suggest that the Nigerian government promote this growth through policies that provide subsidies or tax credits to companies like Olam who are trying to uniquely think through problems. Being a technology leader should reap the Nigerian government out-sized rewards as other countries come to them as they too struggle with similar problems.

Interesting read. I think an incremental challenge posed by farm raised fish is the quality of the fish itself. The nutrient composition of wild versus farmed salmon for example can be quite drastic.[1] Farmed salmon is typically much higher in fat, has three times the amount of saturated fat and contains many more calories, mostly from fat. As Paul mentions, if eating fish becomes less healthy, the competitive advantage to eating fish goes down. Not to mention that the taste difference of wild versus farm raised fish can be quite drastic. In my opinion, the flavor is drastically worse in farmed fish. In fact, if I were given a choice, I would pay a premium to eat wild fish over farmed fish. Yet, I understand why farmed fish is a necessary evil in a world where feeding each incremental person becomes more expensive. It just makes me wonder how the flavor of any of our mass-produced, domesticated meats must have tasted many years ago!

[1] Leech, Joe, “Wild vs Farmed Salmon – Can Some Fish be Bad For You?” Authority Nutrition, https://authoritynutrition.com/wild-vs-farmed-salmon/, accessed November 2016.

Great read. As you mentioned, Coca-Cola’s ambitions are admirable, but I wonder whether a more targeted approach to reducing GHG emissions would serve the company better. The Company’s scale seems to beget a multi-pronged energy reducing strategy, ranging from sourcing to delivery. And yet, I am sure that out of all the strategies Coca-Cola is employing, there is one that is dollar-for-reduced-emission most effective. Purely from an economic standpoint, I would suggest Coca-Cola maximize this program first, before branching into other segments, at least in the short-term. I imagine that the multi-pronged approach is consequence of having to satisfy the energy-reducing desires inherent in having a plethora of constituents. Long-term, I think you hit the nail on the head. Coca-Cola needs to make an emphasis of using clean energy in its plants, but here the Company is constrained by the technology and renewable energy supplies available. Unless Coca-Cola were to itself invest in these renewable technologies, which I would vehemently oppose if I were a shareholder.

Excellent read. Climate change is an interesting beast for the cruise industry – it is essentially fighting a war on two fronts:

On one end are the ships themselves, and the pollution the cruise ships are contributing. Unless there is a bottoms-up redesign, most ships will continue to be made with diesel engines. I doubt any hybrid solution is viable, and furthermore, the use of nuclear energy, although it makes sense, will never happen. This situation is uninspiring, and I think this will become more of a public relations issue, rather than a technology issue. I could see cruise companies arguing that the average waste/pollution per customer on a cruise ship is less than for an individual who goes on a trip elsewhere.

On the other front is the effect climate change will have on weather and routes. Unfortunately there is no way around this problem. I foresee a future of compressed margins as more trips are cancelled and insurance costs increase. Hopefully the industry can capitalize on new routes as the ice up north melts!

Great read. The marriage of Tesla and SolarCity, often referred to as the bailout of SolarCity, was one that I found hard to justify when it was first announced. But over time, as I’ve come to understand Tesla as more of a battery/storage company, rather than a car company, it has made more sense. SolarCity can use Tesla’s tech, and Tesla can use another avenue through which to attain proof of concept. At the end of the day, Tesla is an interesting beast. It has, from a shareholder perspective, been given the benefit of the doubt, even after years of overpromising and underdelivering – and perhaps this faith can be transferred to SolarCity.

With regards to their new roofing solar panels that look like normal tiles, I wonder if consumers will buy into this concept. I recall that Toyota once tried to design the Prius to look like a normal car, but consumer response was poor. Consumers wanted people to know they were driving a hybrid and therefore wanted it to be “ugly” and stand out. Consumer tastes on the subject have evolved and matured since, but perhaps this maturity has not yet transferred to solar panels. I could envision a situation where homeowners enjoy having loud and ugly panels just so their neighbors know how green they are (and how much money they spent).