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Thanks for the really clear post on a topic that many of us should be thinking about!

I agree with you that the unit economics must make sense. If Betterment charges an average of .25%, and its customer acquisition cost is on average $650, Betterment would only earn revenue of around $72.50 per customer per year, given an average account size of $29,000 (which is where it is now according to Bloomberg).

My understanding of Figure 1 is that Betterment’s algorithms focus on asset allocation and trying to maximize the Sharpe ratio, given a few input on the client’s preferences. I agree with you that inbound marketing and partnerships are key to helping Betterment enhance its platform to be more relevant to millennials’ needs. I’d like to see Betterment partner with MOOCs, so that young people can invest their returns in short, online classes that can enhance their human capital and guide them into more productive careers. Nanodegrees on AI or product design can be as low as $14 on platforms like Udacity, and often, taking such courses allows students to move to higher paying jobs that provide them enough savings to consider passive investing – a win-win for Betterment and the client. Having Betterment fit into the daily lives of its clients will help it differentiate from its competitors.

On November 19, 2016, paulyarabe commented on Illumina – Shining a Light on Your DNA :

Thanks for the article Lawrence.

I actually used Illumina to do gene analysis on mice cells in my thesis on hair follicle regeneration, so I know how useful next gen sequencing is for academic research. As NGS cost continues to fall, I think we’ll see NGS more widely applied for personal genomics. If the 23&Me’s of the world can convince consumers to be interested in their genome, Illumina will be able to access more data, as you said. But, for consumers who want NGS to help their doctors develop drugs for their disease, we cannot stop at NGS.

The big bottleneck is not in genomic analysis these days, but in drug development. Even if we know what genes are mutated in various diseases, it is still a very time consuming and costly process to generate chemical compounds that can turn into effective drugs. While efforts are being made to speed up this process (particularly at the Broad Institute of Harvard/MIT), we may still be a decade away from seeing the true benefits of NGS on actual patients.

On November 19, 2016, paulyarabe commented on The Ethereum Project: the World 3.0 :

Thanks for the interesting post!
Who manages the Ethereum Project if it is so decentralized? When companies want to implement the Project to develop these smart contracts, who do they contact, what is the process of setting up such a service, and how does the Ethereum Project generate revenue?

While I understand how the blockchain promotes transparency, there will be – and already have been – abuses of this system to do things like drug or sex trafficking. The applications you mentioned seem promising, but I’m wondering what kinds of use cases you think the Ethereum Project needs to focus on now, in order to increase its market penetration?

On November 19, 2016, paulyarabe commented on Here’s How to Buy Anything from Anywhere (Without Shipping Costs!) :

Thanks for an interesting post Amelia!

Is there any push back from retailers in Singapore? I know the US has laws against this sort of practice as well (buying things in one country on behalf of someone else in another country), so I imagine Airfrov will come under target from regulatory agencies like the US Customs and Border Protection.

I like your idea of having the travellers buy items and post them on the platform. Basically, the platform would provide travellers with information on which products are in demand and provide the most revenue to the traveler. This would be similar to the “God View” that Uber has. One problem is limited product variety, as I imagine most products will be purchased at an airport rather than at a local shopping mall. What incentivizes the traveler to spend more time hunting for deals in order to offer products at the most appealing price point?

On November 19, 2016, paulyarabe commented on Drones to the rescue! :

Thanks for an interesting post!
These Zip drones seem like an effective solution to the last mile challenge in health care delivery in developing countries.

Currently, the drones are being funded by these foundations/NGOs. It would be interesting to know whether the drones are cost-effective for the rural clinics – do you have any information on how much a marginal drone delivery would cost? I understand that these drones mostly deliver blood products, and I can imagine that in situations where blood is needed, the benefits of this service probably exceed the costs.
Zipline is fortunate to have partners that provide funding for its service, but in other countries where governments or partners are harder to come by, Zipline will need to demonstrate that its services can be profitable.

Also, do you know if Zipline is trying to raise awareness to build the physical infrastructure (roads, bridges) that places like Rwanda need in general? An unintended consequence of drones-at-your-service is distracting local governments from developing the infrastructure these places really need. At the same time, perhaps drones will allow Rwanda to leapfrog the huge capital investments needed to build such infrastructure – particularly if drone technology turns out to be quite cost-effective.

On November 6, 2016, paulyarabe commented on What if your heat and power turned off this winter at Harvard? :

Really interesting post Amanda!

You mentioned how spikey demand for heating homes or cooling offices can hurt Eversource. Do you think it would be possible for Eversource to incentivize consumers to decrease energy consumption during these weather events? Just as cars pull up when an ambulance or firetruck screeches by, could people unplug their phones, bundle up (rather than turning up the heat), and just consume less energy for the sake of other consumers who may need it more (like hospitals). Perhaps some behavioral economics can be applied here – universities or neighborhoods can compete to see who can use the least amount of electricity during an extreme weather event, and Eversource can organize such a competition and offer prizes. I know companies like OPower and WaterSmart Software operate using behavioral economics to help utilities deal with variable access to energy supply.

On November 6, 2016, paulyarabe commented on American Airlines positioned to take lead post ICAO CORSIA :

Thanks for the thoughtful analysis on the airline industries response to climate change. You mentioned AA can optimize its fleet to include more planes with the latest engine technology and carbon-fiber materials. Of course, while this is an expensive option, do you think it’s worth it for airline companies to try to become the “Tesla of airplanes” rather than pursue incremental energy efficiency gains for its older planes? How beneficial is this first-mover advantage, in terms of learning? And, do you think consumers will care if the plane they fly is “greener” than the competitor’s, or will they only care about the price of their plane ticket?

Regarding the cost of carry-on luggage, I’m worried that this sort of “airline ticket tax” can harm less wealthy customers more disproportionately. This is why we tend to be way of sin taxes like alcohol and tobacco – the taxes use up a greater proportion of poorer people’s income compared to those who have more money. If people are coming onto planes with no carry-on, perhaps there is a business opportunity in providing, at all airports, or even at final destinations (e.g. hotels), essential amenities and apparel for arriving customers. Of course, it will be important to implement such ideas in a carbon-neutral way.

On November 6, 2016, paulyarabe commented on Philips – Lighting The Way To Carbon Neutrality :

Thanks for the article! I’m particularly interested in Figure 4 – the 1000 companies whose switch to being powered 100% by renewable energy can result in 8.1% of global carbon dioxide emissions saved. What are these 1000 companies? How is the 8.1% calculated? I ask because it seems like helping companies become more energy efficient may be a better business for Philips than focusing solely on LED lighting (which as you say later only saves 6% of global CO2 emissions in a best case scenario). Does Philips see itself as a B2B company rather than simply selling lighting solutions to consumers? Looking forward to your response!

On November 6, 2016, paulyarabe commented on Chevron: From Fossil Fuels to a Low-Carbon Future :

Thanks for the post! You mention that Chevron should look to invest more broadly in the development of renewable energies. Does Chevron have a right to win in this area? If so, specifically where should they invest – in batteries to store solar and/or wind energy, in geothermal, etc? Should outsource these investments or hire investors who have experience in clean tech investing? Given the recent cleantech VC bust, how much appetite can Chevron have to move into such activities?
I also understand that a carbon tax would make alternative energy sources more cost competitive – but how does this help Chevron? For the near future, this will still be a oil/gas company, so if consumers’ demand for oil/gas decreases as a response to the carbon tax, won’t this hurt Chevron? I see your point that participating in this legislative process may help Chevron set a carbon tax that allows them to transition into a renewable energy producer, but how much would this tax need to be and under what time horizon? Would love to hear your thoughts!

Really clearly written! Thanks!

In terms of mitigating the effects of ocean acidification, do you think genetically modifying the salmon will turn off customers from the fish? As we saw in the Indigo case, there are still consumers who are wary of GMOs, even if this fear is unfounded. I think the strategies to locate coastline areas least likely to be affected by acidification is a good idea, but I’m sure Cooke’s competitors are also looking into this strategy, which would of course drive up the price of those leases. What do you think?

Also, according to Figure 1, salmon and chicken are on par with each other in terms of carbon footprint. But, fish does not seem to be making up ground compared to chicken, which has grown in popularity in recent years. See this exhibit here:
I know this is TOM, but what marketing efforts do you think need to happen for fish to be more appealing to US consumers?

Great stuff again!