Ilan S.'s Profile
Great article, David. M-Pesa has been a leader in making the previously unbankable, bankable, and accelerating the penetration of financial markets in developing countries, a key component in building economic growth. Given the technology and regulatory risks outlined above by Ben and Wiss, should they revisit offering a microloan product and start underwriting and issuing consumer or small business loans? This would cement its position and likely make the company more profitable, if they are able to offer interest rates that more than cover default rates.
Very good post on Goldman, which I believe to be the most well-run company in banking and possible finance. I have several questions about this pivot into technological services:
– Does it erode Goldman’s core value proposition as an intermediary, helping connect investors with investment opportunities?
– What does it do to Goldman’s competitive landscape? Specifically, what are Bloomberg or Google doing, and can Goldman do it better? If JPM or MS continue to focus on the human element / non-automated advisory, will they be able to steal clients away?
– In a business that is currently all about relationships, will such a tech revolution commoditize the business they are in?
Great post and peer-to-peer lending is a fascinating innovation in the somewhat stale banking system. My fear is that because of the high levels of government debt in the US, the federal government has been very constrained in applying fiscal policy, leaving monetary policy as its primary means of stimulating the economy, which is why we continue to live in a zero-real-interest-rate environment. This environment, combined with onerous regulations on banks’ required capital ratios, left a fat open space for non-bank lenders like Lending Club to pile into the space. Because they do not take on deposits, they are not limited to the same regulations and can be riskier in their practices. Do you think Lending Club would survive at a higher interest rate environment if a possible bubble bursts?
Thanks for the article, Raphael. As I was reading it, I tried to put myself in the shoes of the Digg CEO and why he attempted to push such radical transformation (shameless LEAD plug on my part). While I agree with your assessments of why he failed, I ask you, if you were the CEO, what would have been keeping you up at night? I think the likes of Reddit, Buzzfeed, etc. have piled into the space making the content a commodity, which affects their ability to attract advertising on their websites, the core of their business model. In what other ways might they have engaged their community members without sacrificing the UI their users had grown to love?
Jordan – thanks for the insightful post. I agree with your assessment that the auto companies that most quickly adapt to the new standards of low environmental footprint will be the only ones to survive. In particular, the auto industry is fighting the following battle: it faces increasing manufacturing costs as a result of green regulation and customers wanting more in their cars (e.g. smartphone connectivity, better mileage, ergonomic seats, etc.) but the price of the average midsized vehicle has stagnated over the last two decades. I believe the Chevy Volt failed because it did not carry the “cool” factor that Teslas do, and provided little differentiation from the dominant player, the Prius.
The question for me is not really about fuel efficiency, which many companies are working on, but rather, whether GM can be a leader in designing urban transportation systems that incorporate driverless technology to reduce the carbon footprint. Do you foresee a world where very few people own their own cars, but everybody uses UberPOOL driverless cars to get to their destination, reducing traffic and increasing car utilization?
Francisco – I enjoyed reading your post because of the great role that power generation companies will need to play in the unfolding saga to reduce climate change. I would like to learn more about the ways the Chilean government, with its track record of supporting innovation in the private sector, is encouraging new renewable energy projects to be developed, particularly in this low fuel price environment which makes alternative sources of energy less profitable. For example, the Chilean Atacama desert seems to provide great opportunities for solar power, is this being fully utilized? How closely are companies like Colbun working together with the government to structure these goals rather than simply being on the receiving end? A few interesting articles I ran into could help illuminate this:
This is a fascinating post, thanks for sharing. It seems evident that consumption preferences will need to undergo paradigmatic shifts in order for sustainability to truly become the name of the game in the protein industry. I think this is unfortunately likely to happen a little too late – consumers will likely not consider other options until the price of beef has increased so much (because of regulation and lower availability of cattle raising inputs) that it is considered a luxury.
Memphis Meats would be well served to partner with celebrity chefs that can create interesting recipes and suggested dishes with the product, creating buzz and a sense of novelty. There are companies doing this in the cricket protein space – essentially the use of crickets and other insects to generate consumable protein at a low cost .Even Indra Nooyi of Pepsi is behind this:
In addition, Memphis Meats could arguably make meat healthier by reducing fat and carcinogens from its meat.
Great post, Jess. I agree with Andres on the suggestion of looking at Catastrophe Bonds:
The notion that you can invest in a security with an attractive yield that is completely uncorrelated to the economy or the stock market means that CAT bonds are theoretically a good security for pension funds to add to their portfolio, as we learned in FIN class. I think insurance companies will need to be innovative not just in how they price risk and align incentives for the future but also in how they finance their operations, and CATs are a simple but promising start. It seems that the whole insurance industry, both health and P&C, will need to undergo a paradigm shift to address preventative measures vs. reactive measures which are more costly (i.e. price health insurance based on people’s health habits, and price P&C insurance based on environmental externalities).
Great post – I actually wrote about the exact same company but we focused on very different issues. While I expounded on the specific ways Maersk is addressing its GHG emissions per container per km, and how it does so is being threatened by (a) the regulatory environment dragging its feet and (b) the low price of fuel, you presented a macro view of the effects of weather changes on their insurance and other costs that I found very interesting.
Assuming that Maersk must take on something like a natural disaster insurance, and that the premiums for that grow over time given the increasing effects of climate change, what do you think will happen to the industry? Will the ultimate costs be bared by consumers affecting global trade or will it be bared by the companies that cannot operate with high fleet utilization? According to their annual report, found here:
Maersk Line is losing money, since they have too much capacity and freight rates are low, particularly in the European trade channels the Company dominates.
Finally, I read in a report by an nonprofit called Seas-at-Risk that vessels that go through the arctic and emit GHG have a much bigger effect on climate change than those that emit the same levels of GHG but don’t go through the arctic. How does this information change your view about pursuing routes through the arctic?