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Thanks for the great read! As with the first commenter, I’m surprised that the payback period is so long for something like this – would have thought that the savings would be significant relative to the cost. Maybe there’s something to be said that 75% of revenues are already coming through EZ Pass, which is very close to the AET model, so a lot of the efficiency has already been realized?

Norway is probably a very good proxy for what a fully developed AET-like system looks like. In Norway, all cars are fitted with toll chips that automatically collect payment once the car passes a toll sensor on the road. The process is very efficient and reduces waiting time / traffic time. License plate recognition is likely the best option for mass implementation here in the US given the difficulty of installing chips into so many more vehicles, but I imagine the optical technology required to scan license plates and the manual labor that may be involved in reviewing footage make it more expensive than the chip-sensor model in Norway.

On November 20, 2016, JJL commented on Online Brokers and Robinhood :

Thanks for writing! Couple of thoughts:
– How will Robinhood differentiate itself against more established brokerages that have more value-added services? For example, TD Ameritrade has a thinkorswim platform that allows its clients to do more advanced stock analysis to generate investing ideas. My brief experience with Robinhood left me with the impression that the platform is relatively basic and useful only to execute trades, which is hard from a unit economics perspective for the business (as people have mentioned before, it’s likely burning through lots of cash).
– Agree with CYou’s comment on robo advisors – I see those as far more pertinent threats to the traditional online brokerage model, or even the actively managed / passively managed mutual fund market. Wealthfront and Betterment have reached, in a short amount of time, significant assets under management. These companies charge low fees while providing active trading capabilities and constant portfolio optimization / rebalancing.

On November 20, 2016, JJL commented on Nike just did it: Digital (R)evolution :

Thanks for writing! A few questions / thoughts:
– How much adoption has Nike gained for its apps? One thing they did a few years ago with the launch of the Nike Fuelbands (wrist wearables like the Fitbit) was pair it with an athletic tracking app. However, after the market for wearables started to take off and tech giants like Apple stepped in with their own devices, Nike basically dropped the product. That feels like a sign of trouble converting from a traditional retail product and management team to adapt to a higher tech digital model.
– The 2020 goal sounds like it could be very difficult for a variety of reasons. First, Nike is going to be competing against its own channels (both brick and mortar and digital) in trying to make the conversion to online DTC. Second, purchasing shoes is very much about the fit, and finding the right fit is difficult without trying the shoes on. Companies like Zappos have demonstrated some success in the past, but standardizing sizes / fits / feels for athletic shoes in particular is very important. Additionally, it may require some organizational changes to adapt to a large e-commerce footprint.

On November 20, 2016, JJL commented on e-Estonia: How Estonia is digitalizing an entire country :

Great post! A few thoughts, some of which echo previous posters.
– Data security is a huge issue here. You mention the “X-Road” as the way that they can protect data, but how is the system actually implemented? What kinds of authentication features does the system have? Though decentralized systems could be more secure, there are plenty of stories of data theft even in these supposedly secure arrangements (e.g., Mt. Gox hacking of Bitcoins).
– Implementation in larger countries may be more difficult, but not impossible. For example, in the US everyone who is registered legally has a social security number – that SSN could become the one “username” that individuals use to log in to a variety of websites. Since financial information, medical information, and legal information are all tied in some way to SSN, it could be a great way to bring together a digital portal for each resident of the US. But the investment will be significant and it will require digitizing a lot of paper – curious how Estonia was able to transition from paper / manual records to digital ones, and if there are lessons to be learned.

On November 20, 2016, JJL commented on Netflix and Chill? The Rise of a Tech Media Powerhouse :

Thanks for the post! A few thoughts:
– How should Netflix adapt its business model / operating model to compete against someone like Amazon, who has significant amounts of hosting capacity and capital to spare? Amazon is trying to aggressively expand its own video streaming and original content offerings. Perhaps something along the lines of personalization and consumer engagement?
– Do you know how profitable some of Netflix’s original content is? Some shows, like House of Cards, are bound to be profitable and cash generative, but it’s also possible that as Netflix increases its original content offerings, the quality may start to diffuse and slip.
– From a regulatory standpoint, with a Trump administration, is there a chance that net neutrality goes away? This would be very bad for Netflix if ISPs can limit bandwidth allocated to Netflix or charge Netflix for allowing higher bandwidth.

On November 7, 2016, JJL commented on Fracking: A Temporary Solution to Climate Change :

Really interesting! Didn’t realize that natural gas emissions were lower than most of the other energy sources listed, or that we’d be strongly coal dependent even through 2040. A few thoughts:
1) Does the fracking process itself generate emissions (e.g., from the use of drills, from chemicals required to make the pumping mixture) that ultimately result in higher emissions than just the leaked natural gas itself?
2) This seems on face to be one of those examples where a relatively complicated issue (what energy sources are most sustainable, what tradeoffs need to be made in the short run vs. long run) is distilled into a few easily digestable sound bites (fracking is harmful for the environment) that may cloud actual science. Unfortunately, for companies to successfully undertake this option, they will likely have to invest significant marketing dollars for general awareness purposes, which may make the cost of investment too high.

On November 6, 2016, JJL commented on Arrival of the Mackerel :

Very interesting example of how climate change is impacting a core business product.
1) I wonder how higher sea temperatures impacts the ocean ecosystem in general? Higher temperatures in this case meant more mackerel and less shrimp, does it lead to other types of fish / shellfish species proliferating? From a business perspective, may help to have a sense as to what new species will be fishable in the near future and be prepared with the correct tools to capture / market / sell them.
2) Have they considered “farming” instead of “fishing”? If they could develop shrimp farms and regulate the temperature of the water, etc. may be another way to generate consistent supply. It won’t be the same as fresh shrimp unfortunately.

On November 6, 2016, JJL commented on Tesla’s $7 Billion Climate Change Problem? :

Interesting, hadn’t really thought of Tesla’s supply chain being affected adversely by climate change. Similarly hadn’t thought about how construction of Tesla cars is more emissions-heavy than an alternative sedan. A few more thoughts:
1) Tesla could continue to vertically integrate even further. They’ve built the largest battery manufacturing plant in the world in Nevada, and I’m sure that allows them access scale and reduce costs / emissions to a degree that other battery makers simply can’t match. By vertically integrating a larger portion of their production (similar to IKEA), they could reduce emissions and have a more sustainable production process.
2) Though the Model S generates 68% more emissions to produce the same sized sedan, that may not be the best comparison since the average, similarly sized sedan is unlikely to have the same types of technology in the car (e.g., full touchscreen panel, autopilot, electronically controlled everything). It may just be that more technologically advanced vehicles (or vehicles with premium leather / other specifications) generate higher emissions. The longer term question is if this is true and this is the inevitable trend, how auto OEMs can reduce the environmental impact of “trading up” to better technologies.

Really interesting post. Couple of thoughts:
1) is there a way to apply the same algorithms and models that utilities use for consumer power demand to data centers? For example, adjusting operations intelligently based on time of day (e.g., evenings likely to be busier than early mornings)? If there was a way to “turn off” parts of the DC during low demand periods, that could help reduce energy cost.
2) Overall, the growth of data means that proliferation of data centers will continue. Aside from sheer electric consumption, the explosion in data that is being tracked and stored will also mean additional land used for data centers, more materials used to construct servers / racks, and more manufacturing activities associated with DCs. For a DC to be sustainable, we must also consider some of the downstream issues arising from new construction and ensure that those downstream processes are sustainable as well.

On November 6, 2016, JJL commented on Blue Apron: Delivering an efficient tomorrow :

Interesting read, and definitely a new take on BA that I hadn’t thought about. A few thoughts:
1) I’m not sure that BA has currently figured out how to deliver food in this fashion in a profitable manner. They’re private so profitability information isn’t available, but I doubt that they have the scale at this point to operate at a profit especially given all the sales and marketing dollars that are going into the business. The logistics (managing a warehouse, distribution costs, etc.) would also weigh heavily on the bottom line. On the flip side, I’m not sure that customer attrition is low – as a result, the cost of acquiring a customer may well outweigh the lifetime value of the customer. I wouldn’t be surprised if BA was burning through significant amounts of cash at the moment.
2) Totally agree with the comments that packaging and shipping need to also be sustainable for it to truly be an eco-friendly company. I haven’t used BA personally, but the ice packs sound like potential issues. Additionally, BA could be adding to emissions by duplicating some functions that traditionally would have been done in the house. For example, take refrigeration. BA likely has to have industrial-sized refrigeration units that emit significant amounts of greenhouse gases (but hopefully not fluorocarbons). At the same time, the households that are using BA goods still have their own refrigerators, potentially just at a lower utilization, but still at the same emissions level. So on net, BA could be adding to overall emissions.

Lots of interesting thoughts and opinions on this one already. Just to throw my two cents into the ring.
1) There may well be a distinction between the impact of ride sharing on emissions today vs. on emissions in 10 years, when ride sharing will theoretically be even more popular. The long term vision of a lot of the ride sharing companies is actually to reduce individual car ownership (Uber has had marketing campaigns that show how much someone can save using purely Uber vs. having their own car). So while it may be the case that Uber trips today contribute to higher emissions, the general trend toward more ride sharing could result in lower emissions down the road.
2) If ride sharing encourages people to purchase fewer cars, there could be a positive environmental benefit from the reduced need to manufacture / construct vehicles, as well as a reduced need for environmentally friendly scrapping / disposal of old vehicles. There are other sorts of secondary and tertiary benefits that are hard to quantify, but also have an environmental impact from reduced car ownership (e.g., fewer chemicals used for car washes, fewer paint jobs required, etc.).