This is a very interesting post. I am surprised Quirky was able to raise so much money in light of their flawed business model. I think Quirky could have been more effective if it had taken the ideas, validated market fit, patented the idea, and then sold the patents to different companies, rather than taking on the entire rest of the process themselves. Quirky seems like a very poor version of Li & Fung – a one stop shop that is not creating quality products or monetizing its services properly.
I really like the suggestion you made about pricing the Amazon Echo intentionally low in order to increase the prevalence of those devices in peoples homes, tying all of their IoT devices into the Amazon ecosystem. Particularly with Google’s release of Google Home (currently priced at $50 cheaper), time is of the essence for Amazon if it wants to stave off the competition for the home automation device space.
SimpliSafe certainly put themselves in a tough bind with the hardware they created that could not be updated remotely. I wonder if their lack of response came from a small or non-existent drop in customers as a result of this discovery. While it seems like it’s not too difficult to disarm the SimpliSafe using the hack, I wonder if just having the SimpliSafe acts as enough of a deterrent to cause burglers to go elsewhere.
This post mentions that the MAC addresses of smartphones were static until the advent of iOS 8. I wonder how Euclid’s product functionality is affected by the MAC addresses becoming dynamic instead. It would become seemingly impossible to track a specific user across multiple visits, and their value proposition could be compromised.
One way to get around this is to introduce a new opt-in method, which then uniquely identifies users with some other ID. However, adoption would be inevitably far lower.
The growth of Singles Day is definitely astounding. I wonder how much of the slowing growth in sales on Singles Day from 60% to 30% is due to saturation of the market, as opposed to an inevitable result of the slowing of China’s economy growth as a whole.
I think Alibaba should take a page out of Amazon’s book, and explore drone delivery in order to augment their existing Cainiao logistics services. This could save costs greatly when implemented at scale in a country like China.
I agree that innovation is needed from all the companies in this sector jointly. Because there is the possibility of a first-mover disadvantage, I believe initiatives like the Oil and Gas Climate initiative are crucial to make progress. Based on my understanding of the oil and gas sector, there are high enough barriers to entry, that if all firms worldwide can agree to join together in such an initiative, they can affect significant change without fear of being undercut by competition.
I also agree that Nike should be using its bargaining power further to require its supply chain partners to adopt more sustainable practices. I suspect that Nike is maintaining its policy of concealing its commitment to sustainability from its customers because it is not entirely genuine in these efforts. While the reuse of materials for their flyknit shows is great for sustainability, it also likely results in huge cost savings for Nike. Requiring its supply chain partners to adopt more sustainable practices would likely increase costs for Nike, so it is quite convenient for Nike that they have not put this requirement on their suppliers. I will believe in Nike’s commitment to sustainability when their bottom line takes a noticeable hit as a result of a change in their operating practices for sustainability.
I agree with Siddharth that Ladakh is an unfortunate victim of externalities from pollution from elsewhere. To complicate matters even further for Ladakh, I wonder if its people are in a position to turn away tourism business that is not in line with their ecotourism standards. In the IKEA case that we studied, one of IKEAs options was to increase the requirements on their wood suppliers, and since they were such a large corporation, they likely had enough leverage to make this happen. However, my fear is that if Ladakh raises its standards too high, it will turn away tourism – something that goes a long way to supporting the local economy.
As someone who skis in Tahoe during the winter, this is a very sad reality to come to terms with. However, I am in favor of Squaw’s production of artificial snow, even if it ends up needing to become a long term solution. While it is not as ideal as natural snow, I believe it will still do the trick. Serious skiers that normally go to Tahoe will definitely go elsewhere (Colorado or Utah), but there is still a massive market of casual skiers from the SF Bay Area and other nearby areas that will flock to Tahoe each winter (natural snow or not). I also like the idea of augmenting their winter sports with four-season activities in order to keep their business afloat. If the world can band together and curb climate change, by promoting four-season activities, at least Squaw could still be around to reap the benefits.
When reading this article, I could not help but draw similarities between Nutella’s reliance on hazelnuts and IKEA’s reliance on wood. In particular, one of the issues IKEA faced in the case we read was whether or not it should increase the amount of forest it leases, in order to better control its supply chain. When weighing the pros and cons of that decision, one of the factors that IKEA took into account was the additional overhead costs that would be incurred by entering the timber business. I am curious to know what additional costs Nutella incurred by entering the hazelnut business (both through acquisition and through opening additional agricultural centers). This is radically different from their previous buyer-supplier relationship, and likely resulted in many fixed costs. I suspect these fixed costs could be part of the reason that Ferrero is not yet focused on sustainable hazelnut growing practices, as additional costs from those sustainable process could further damage their bottom line.