Lama, don’t ever underestimate how inefficient a company can be while it is still profitable (if anything, high profitability usually leads to excessive inefficiency).
To your other point on competition, I believe that their will always be a market for this high-end data analysis just as their is still a market for consulting even thought nearly all large firms have internal consulting team. Related to my response to Dan above, I feel that Uptake will feel more pressure from other start-ups and consulting firms before they feel any pressure from the internal capabilities of large corporations.
Good questions Dan, unfortunately most of them are difficult to answer due to Uptake being privately owned but I will do my best…
1) Data sharing: I would imagine that this would be a very important aspect of the negotiation process with a client as Uptake would be extremely hesitant to promise improvements if they did not have complete data access. In Cat’s case, they are fortunate as nearly all of Cat’s customers opt-in to the Cat Connect system which provides tremendous access (and learnings) for Uptake.
2) Risk based fees: This was not explicitly stated due to it being a private company but I would very confident that they are bringing in outcomes based pricing into their contracts. As you mentioned this would significantly reduce barriers to entry and allow easier adoption.
3) Edge in machine learning space: Right now I believe that they have a first mover advantage and the ability to mass-trial their solutions with a major manufacturer. As machine learning becomes ‘commoditized’ then I would imagine that their value add will come in the pre and post stages of data analysis. Even with incredibly smart people doing neural networks and AI, I believe that the true differentiation in this space will be with how Uptake interacts with the clients in finding which data points are best suited to be optimized, and once optimized, how the improvement and changes are communicated and rolled out to an organization. This is where they will find the competition from major consulting firms which are quite good at this component of client interaction (McKinsey has already begun acquiring these machine learning start-ups to add to their client service quivers…).
Thanks for putting this together Gabby! What I found interesting is how they were able to convert from B2C to B2B. There are a couple questions that I have. Do you know if Google is using any of their Nest data in their other online spaces? If I constantly keep my house cold would I begin to see ads for blankets and sweaters on my internet searches? Do you also know if there has been any malignant use of the data coming out of these homes? I have previously heard that burglars would hack into other smart thermostats and were then able to see when the home-owners had set the device to ‘vacation’ and then break into the home while the family was gone.
One final thought on this would be that Nest / Google should partner with EnerNOC which provides ‘virtual power’ to the grid by shutting down or limiting high energy users. If Nest could collectively raise (or lower) the temperature in 1,000’s of home they could sell this ‘excess’ power to the grid and then reimburse their customers…
Thanks for this post and for bringing light to an industry that has lagged far behind the rest of the world in terms of technological advancement.
There is one aspect of the article that I would like to disagree with regarding the simplicity of converting mining trucks to autonomous operation. One of the most difficult aspects of transportation at mines is the incredibly dynamic conditions; the haul roads that the trucks are driving on are literally changing on a weekly basis, in both the vertical and the horizontal axis’. Another aspect is uneven terrain; GPS & radar are not able to see and identify all of the potholes or abnormalities in these haul roads which could cause significant damage to the equipment if the machines are not slowed down or directed to avoid these hazards. A final complicating aspect of automation is the variability in weather in the remote locations of these mines; many autonomous systems are dependent on visual markers such as road lines or road signs, what if the entire road is covered in snow or mud?
Even with all of these complicating factors I completely agree with you that mining companies need to move to autonomous operation, the cost and safety benefits are incredible, however I believe that it is an even harder environment to master this innovation compared to conventional driving…
Thanks for putting together this article Steve! After visiting the farm that you worked at this fall I can see why farmers are so interested in automating this process. We grew up in an agricultural area and it was very common to see crops being sprayed aerially with planes or with 100′ wide booms on the backs of trackers; both of these methods seemed quite inefficient in how they uniformly applied the product.
My question is in relation the the intervention method(s) that the machine is using. I get the fact that the machine is selectively spraying the ‘bad weeds’ but how is it removing the excess lettuce heads. Does it have mechanical ‘fingers’ that pick out the bad excess weeds? If so, do you think that they could completely eliminate weeds through a mechanical process as opposed to chemical?
Thanks for sharing on this topic! I am a firm believer that nearly everything academic that we learn in our MBA could be achieved with a $10 library card or an internet connection, what I find interesting is how employers will view those with online MBA’s… As can be seen by the fact that we are being recruited for summer/full-time positions within the first couple months of HBS, we see that companies are not as interested in what we have learned as they are the fact that HBS picked us out of a group of peers to attend the program. Large firms are basically able to de-risk their hiring decisions by the fact that HBS, and other top schools, have already vetted us to be in the program.
With the limiting factor of an online MBA being the spending limit on your credit card, it will be increasingly difficult for future employers to rely solely on the location of the program as a proxy for the potential future success of that student… Could these online programs further increase the value of an in-person MBA?
Great article Homan, and spot on with how logistics is viewed as unsexy to consumers. I would be curious if this platform will open the door to more small-scale logistics and shipping agencies (or single owner operators) in the same way that Uber enabled 1,000’s of individuals to become their own bosses. It would be interesting to see if Freeport allows multiple operators to take part in the various aspects of the shipping process (pick-up, transport, drop-off, etc.) to fully leverage the operators in their respective areas.
This is after the time period but I thought I would pose a question… Do you think that the massive difference in the input ratios for the feeds relate more to the quality of the feed than the inherent efficiency of the animal in producing edible meat? I know that salmon are typically fed high-calorie fishmeal which is composed of herring, anchovies, sardines while cows are fed low calorie foods like hay. Do you know if any work has been done on the carbon footprints of these feedstocks?
Very fascinating article Claire! You inspired me to spend the last 20 mins on Everlane’s website. Incredible to see consumers reacting positively to seeing all of the input costs (which are usually 30-40% of market price) and then being MORE inspired to purchase the product.
On your point of water & chemical usage: Do you think it would be better to have all of the details listed (i.e. gallons of water used) or simply to have an ‘eco-badge’ that is 3rd party certified? I would be curious to see the physical numbers but would actually have no clue if 400 gallons of water was high or low for a pair of pants…
Very interesting to hear about snow woes from another city! Calgary (in Canada) only has only 1M people and we spend $30-40M a year on snow removal. Many of our trucks are dump trucks during the summer and then they add plows & sanding equipment for the winter months. We still have major issues when a huge snowfall occurs. One of the biggest compounding factors is the fact that an entire region is usually hit with the snowfall which makes it incredible difficult to obtain extra resources from your closest municipalities.
Could there be a business model for managing & deploying excess snow removal equipment throughout an area?
Interesting article! It would very interesting to put an actual environmental value to a standard ‘action’ that takes place on the internet. For example, watching 1 hour or Netflix contributes the equivalent of 1 km of driving or something like that.
One question that I have is in regard to the cold weather locations… How much does a data center need to be closely tied to the region that it is serving? Do our current fiber optic networks allow us to place data centers anywhere on the main lines? Canada would be a great place for these!
Very interesting article! I am an avid snowboarder and lived in a ski town for a year and can attest to the huge influence that weather (ultimately snowfall) makes on the number of visitors to the resort. I completely agree with your point that year-round activities are necessary for sustainable operation; I am also an avid mountain biker and have found that bike runs on ski hills are near perfect in terms of slope, clearance, and trail features.
One question would be on the other end of the spectrum: Are there ski resorts (or locations) that have been affected by climate change where they now receive MORE snow or a longer ski season? Would be interested to see if such a thing has occurred…
Great article Brad and great to see that your alma matter is at the forefront of this new engine. What what I have read about jet engine improvements, they are always in the low-mid single digits of efficiency improvements, making this newest development of P&W an ultimate game changer! With such a quantum leap in efficiency, how will GE & Rolls Royce even compete with this engine? Do you foresee significant discounting or other methods to attract customers to less efficient engines?
Great article! Unsure of one thing though: Does these 78 mitigation dams simply keep the high water waves from entering into the harbor or do they keep all of the rising water out? At the end of its service life will it effectively be holding back meters of water?
Another random thought, as the buildings were already on poles, did they consider the cost of ‘re-raising’ the buildings to a new higher level?