Jim Sainz

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On December 1, 2017, Jim Sainz commented on Clever Ed Tech: Breaking Down Barriers :

Very interesting company-thanks for highlighting! To your first question, I find it interesting that in this case, Clever is essentially a distributor, aggregating a number of fragmented apps and delivering them through a consolidated interface. That model has worked in other industries, but it does leave them vulnerable, as it’s not truly producing any distinctive value which can’t be replicated. Other curators, such as Netflix, have been forced to invest in original content creation, and there are no guarantees Clever would be able to avoid this fate or be even be successful if they tried. Additionally, all education technology is not equally valuable, and recent research suggests that it’s possible the recent flurry of development may not be commensurate with the value they provide [1]. If this narrative gains traction, the massive array of apps might be more intimidating than reassuring for an administrator to sign off on. For these reasons, I’m a bit wary of their long-term prospects, but I’m certainly rooting for them to be able to improve an area of tremendous need.


On December 1, 2017, Jim Sainz commented on Mars Worries M&M’s May Actually Melt in Your Hand :

Thanks for an interesting read, Jack! I think your first question is a challenging one, and I would push it even further: if Mars released evidence of how financially successful their new climate change initiatives have been, would anyone believe it? Mars enjoys a unique benefit as a private company in that they have largely have control over information flow. However, while this affords them the ability to pursue their billion-dollar commitment as slowly as they want, it also reduces the credibility of what they do provide the public, as this data is not subject to the same oversight and institutions as it would be coming out of publicly-traded companies. This problem has been exacerbated by recent bad behavior from even larger privately-held companies, such as Koch and Cargill, who have lagged many of their publicly-traded peers in pollution and climate change. As much as the public generally mistrusts corporations to be good stewards of the environment, this cynicism might be even more difficult for Mars to overcome.

[1] http://www.greenpeace.org/usa/global-warming/climate-deniers/koch-industries/koch-industries-pollution/
[2] https://www.corp-research.org/cargill

On November 30, 2017, Jim Sainz commented on Skistar: the impact of climate change on ski resorts :

Fabulous essay-very intuitive but challenging problem for the industry. To your first question, unfortunately it seems that snow-making machines won’t be the answer. While I agree it’s somewhat hypocritical for the resorts to utilize these climate change accelerants, I would argue that their impact is minor given the size of the resorts. However, an even larger disincentive is that they’ll simply be unprofitable. As you mentioned, they are quite expensive and resource-intensive to operate, and as other resorts are learning painfully, as temperatures continue to rise, the artificial snow will melt faster and faster, further weakening the efficiency of production [1]. Ultimately, I feel the likeliest answers are to head for higher ground or prepare for life as a full-spectrum resort.


On November 30, 2017, Jim Sainz commented on Disruption of Video Game Retailers :

It seems to me that Gamestop is in a truly dire position. While doubling down on non-digital strategies, such as collectibles and Technology Brands, is sensible, these strategies still represents a small percentage of overall sales [1]. Additionally, the further they wade into these waters, the further removed they are from the core identity of the company, and the less weight the brand will carry. I agree with your assertion that capitalizing on the social effect of bringing gamers together is a potential solve, but their continued downsizing of retail properties would seem to be ill-suited to that end. Ultimately, my belief is that this vertical is one where the game creators have direct access to consumers and can use the saved margin of cutting out a distributor to offer greater perks, access, and community than Gamestop ever could. Unfortunately, I think it’s Game Over for the firm in the next decade.

[1] https://seekingalpha.com/article/4128407-gamestop-turnaround-bouncing-cat

On November 30, 2017, Jim Sainz commented on Driving into the Unknown: Ford Motor Company and NAFTA :

Great stuff-thanks for sharing! I believe your first and third questions are deeply interconnected in this particular case. As many have pointed out, the number of jobs at stake in Ford’s shifts from Mexico to US production is small in both absolute and relative terms. Yet, a first-term elected official who must constantly be engendering support for re-election is incentivized much of this and to press for corporate decisions which may not be in the long-term best interest of the company or its consumers.

This decade has underscored the devastating impact of political volatility on both the macroeconomic environment and on specific firms. Firms have been ramping up lobbying for years, but it seems the current isolationist climate will place an even bigger premium on their ability to be savvy political operatives and forecasters [1]. This is a fantastic time for firms like Ford to be doubling down on their in-house policy analysis and lobbying efforts to wield stronger influence and better anticipate increasingly impactful political swings to preserve some control over their supply chains.

[1] https://hbr.org/2005/06/managing-risk-in-an-unstable-world

On November 29, 2017, Jim Sainz commented on Breaking the walls with 3D printing :

Thanks for an interesting read! To your question on local government support, I don’t necessarily agree with your implicit assertion that the proliferation of this technology will actually reduce jobs in a given area. As GE officials have pointed out, the firm wouldn’t be able to win many of the contracts it does were it not able to source from a broad pool of global suppliers [1]. It’s possible that while the efficiency of the process improves and labor per unit declines, this enables GE to win more business and create even more work for these local factories, in which case the local governments which are most supportive of the new technology might actually stand to gain the most. Either way, it will be fascinating to see how adroitly GE is able to navigate such tricky political terrain as it pushes for lower costs abroad.

[1] http://www.foxbusiness.com/features/2017/06/29/ge-ultimate-global-player-is-turning-local-2.html