Thanks for the post! It’s shocking to me that most airlines still do not use CRM tools or baggage tracking beacons–these seem like easy improvements to the baseline operating model that would have outsized impacts on airline efficiency given the ripple effects we’ve seen in class. To your earliest point, it definitely seems to be because most travelers see air travel as a “good enough” good rather than a “need the best” good, and so are willing to forgo a lot of potential benefits of higher-priced flights (e.g. flight attendants who can get real-time data on you via CRM).
Generally my takeaway is that a lot of the digitization initiatives and benefits will thus accrue to business travelers who disproportionately travel in first class / business class and are price insensitive, and so will differentiate based on in-flight services. Good for Emirates to get out in front of this trend.
Thanks for the informative post! Flexport makes a lot of sense now given they ability to track everything everywhere in real-time. I’m curious how much the company’s business model is self-service vs. full-service, and how the operating model impacts that. Given the power of the software platform it seems like a great candidate to have clients self-select into the best-value routes for their needs, but I could also see clients wanting to outsource the entire functionality and Flexport, by virtue of their software system, being best placed to provide that outsourced supply chain management functionality at the lowest cost. This certainly seems like the type of internet-based disruption that Li & Fung were concerned about, bought to fruition.
Thanks for the highly interesting post! I would have never thought of Buddhist monasteries as centers of modernity and technology but Longquan has certainly done it. I’m most impressed by their ability to fund all this innovation–I imagine implementing all this technology has been expensive. Have they had to improve their donation solicitation strategy as well–perhaps with more online donations or targeting the wealthy in the technology industry? On the other end of the P&L, have they had to cut back the typical charitable work that monasteries do in order to fund the technological development of the monastery itself?
In the long run I’m curious if there is enough of a market to digitize additional monasteries–there may be a bit of a first-mover advantage in that the first technologically advanced monastery gets a disproportionate amount of mindshare and donation dollars, raising the bar for subsequent followers.
Thanks for the post Sarah! It is pretty amazing that you can now meditate while being guided by an app in what was traditionally an in-person experience. My question is around efficacy–beyond just subscription statistics, how does Headspace do versus in-person or other traditional meditation guides? There have been numerous apps that promise to teach you a new language or help you work out better, but generally it seems like language teachers and personal trainers continue to offer better value. More generally as apps become more effective at teaching us things, I can see a long-term threat to schools like ours (HBX!) and both the price and perceived value of our educations.
Thanks for the post Shezzad! As a new driver I have to agree that highway driving is far easier than local driving, and given the clear economic advantages you mentioned (higher truck utilization, lower driver cost), I tend to believe that self-driving innovations will hit the trucking market much harder than the consumer market once it gets there.
I did have two questions for you on the Otto model–how it deals with regulatory issues and how it expects to train its AI. In contrast with cars, trucks have incredible destructive potential and variability in weight, size and purpose. When Tesla’s AI fails, one driver is killed–however when a truck’s AI fails, it could potentially kill dozens of drivers. How has Otto addressed these safety concerns as they attempt to roll out the self-driving platform? I believe self-driving trucks face a much higher regulatory hurdle than self-driving cars will due to this.
Second, it seems like the AI algorithm needs to be trained to learn how to deal with situations. How does Otto plan to do this training? I know Google basically had private roads on which its self-driving vehicles were trained, but curious if the need for highway-type scale, speed and variances make this approach unwieldy.
Thanks for the thoughtful reply! Fair point on good ol’ supply and demand fixing the problem, I’m guessing restaurants may continue to value variety but the bulk of consumption from consumers will shift to reflect pricing signals.
As for the Pacu, that is a weird looking fish, thanks for the find I think…
Thanks for the post, I’ve always been curious about how insurance companies deal with climate change and had long assumed they were net losers. You bring up a good point that insurance companies can always pass the cost of higher climate change risk to customers via higher premiums, and unlike life insurance the lag time here can be significantly shorter given the increasing frequency of climate change events.
I am curious how you imagine this playing out in the intense competitive field of insurance. I know when I go to buy insurance there are dozens of providers offering me quotes–how do insurers ensure they don’t lose out on business because they “over-passed” the costs to customers relative to their competitors? I could imagine a worst-case scenario where the insurance company that has the worst climate change policy wins the most market share because their premiums are the most mispriced and lowest. I have heard that firms like Berkshire Hathaway can protect against this risk just based on their reputation and resulting ability to be picky about risks they insure, but I’m wondering if there is a race to the bottom and if so, what are your thoughts on how the industry can protect against these effects.
Thanks for the post, agree with Claire that it seems everyone is discounting the impact of a future Hurricane Sandy in making real estate decisions–in fact, I think the relative resilience of the New York / New Jersey area after this 100-year-storm has actually increased the level of discounting everyone is applying to hurricanes.
One question your post brings to mind is how to change demand so that people want to move to areas safe from climate-change-induced sea level changes. Basically, how do you make inland sexy? As your post pointed out real estate remains about location, location, location, and unfortunately demand for coastal buildings seems to be only increasing over time. I’m curious if LCOR or other real estate players have tried marketing inland locations or otherwise introduced water-side properties inland–which is, in my view, unfortunately the only long-term solution to the problem of rising sea levels affecting coastal cities.
Interesting post, it definitely seems like aquaculture is the wave of the future for fish consumption and yet even within this disruptive industry climate change is creating a real need for change. One consideration I’d love to get your thoughts on is how aquaculture can be applied to different types of fish. While many other farmed proteins–beef, chicken, pork–generally source from one species and so can use much more universal techniques for feeding and growing, fish comes from a plethora of different species that each have their own supply and demand. Just looking at a typical sushi menu, you see tuna, salmon, shrimp, eel… and even within tuna you have bluefin tuna, yellowfin tuna, and many other types of animals.
My question is, how can we and Marine Harvest balance the need to shift to sustainable aquaculture with the highly variable demands of the many different species of fish that people demand? I see that as one of the underlying causes for Marine Harvest’s current reliance on fish meal feed and ocean pools–some fish just cannot grow without these factors. One example that I found was bluefin tuna, which is Japan’s fish of choice and which is also notoriously fickle in aquaculture conditions. I fear that such bespoke tastes will limit the ability of aquaculture firms like Marine Harvest to be as sustainable as possible.
Thanks Sotaro, interesting take on how climate change regulations are de-commoditizing industries such as ship-building. I’m curious how you think this plays out in the long-term among two dimensions–first, the enduring competitive advantage of Japanese ship-builders in this arena, and second, the size of the total shipbuilding industry profit pool going forward.
It strikes me that environmentally friendly ships is not a “I need the best one” product, but more of a “good enough” product. As long as a ship hits a certain level of environmental friendliness that is required by regulation, it doesn’t really matter how much MORE environmentally friendly it is. This makes me think that the Japanese manufacturers’ technology edge is less of a competitive advantage than at first blush. What are your thoughts on that?
Second, I’m curious if ship buyers have been willing to pay requisite price premiums for environmentally friendly ships. Given the competitiveness of the market and how stagnant prices have been historically, is the implication that industry profits are shrinking as a whole as similar prices are being charged on ships that are more expensive to build? I cannot imagine that is a net positive overall and speaks to the potential destructive potential of climate change even where there appears to be opportunity. Curious your take on this!
Interesting post, it makes a lot of sense that a forest operator needs to address the impact of climate change on its operations and it seems like Weyerhauser has a well-thought-out strategy for reducing its own impact on climate change. I’m curious if there are additional business opportunities presented by climate beyond just the biomass discussion. Is there any way to sell “sustainably grown lumber” at premium prices? Could they potentially monetize some of their forests and sell them to less profit-driven organizations who want to look at carbon offsets and forest preservation in select geographies? I could see Weyerhauser trading forests in more vulnerable areas for forests in less vulnerable areas over time to allow more vulnerable areas to recover and flourish.
Great take on a topic that was more nuanced than at first blush!