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Thanks, Yassine. I’m an avid user of Spotify – was listening just a few minutes ago, actually – and it’s always entertaining to learn more about the companies that one supports.

I wonder about their path to profitability. Sure: they could increase their paying user base. There must be other ways though. Without interrupting their streaming music with audio commercials, in the way that Pandora does for free subscribers, could they perhaps use purely visual advertisements? In turn, the corresponding price point could be modified downward, such that revenues from advertising still break above the price savings offered to users.

Another approach would be for Spotify to start representing artist directly. Of course, representation of artists in general is on the decline given the increased access of artist to music-creating technologies (i.e. Logic, ProTools, etc.) and music-sharing platforms (i.e. Spotify, Pandora, Tidal, etc.). Given their direct relationship with artists, Spotify might be able to gain market share in this space through this sort of vertical integration by offering these services at a lower cost.

Thanks, Jessica. Had no idea that Walmart was so thoughtful and adaptive around their implementation of technology.

I think it was a smart strategic move to create so long ago. Their innovation around same-day pick-up is also commendable. Taking that one step further though, I wonder why Walmart has not yet paired up with the likes of Uber, Instacart, etc. in order to deliver groceries directly to the homes of their customers. Seems like a decent opportunity to increase revenues by charging a commission per delivery.

You mention their ideas around in-store technology, such as self-operated shopping carts. I agree that this poses a serious risk from an employment standpoint. Presumably, Walmart would look to apply this in the longer term to the management of their warehousing and inventory. Given their nearly ubiquitous presence throughout the US, and the corresponding high levels of inventory and employment, Walmart would need to be careful about how such potential layoffs might impact brand perception on a broader scale.

Thanks for sharing, JC. An insightful piece on the important changes happening in the retail space.

In the case of online retailers – as opposed to sales platforms – the success stories that you mention were particularly thoughtful about providing a convenient way for customers to try the product or determine their sizing prior to purchasing. In the case of Warby Parker, customers could try on frames either in physical showrooms, which held little to no inventory, or by way of their “mail-and-return” system. For Bonobos, clients could determine their sizing in a brick-and-mortar store, again, which held no inventory, and subsequently make purchases online.

Unfortunately, there was no such fix for Gilt Groupe, which was forced to deal with a difficult paradox to do with their business. In most cases, long-standing relationships with counterparts (e.g. brands, suppliers, etc.) prove beneficial over the longer term. In the case of Gilt, frequent repeat brands actually took a toll on the bottom line.

Perhaps the right idea would be to pivot into the curated retail space, a la Net-A-Porter or Mr. Porter. This would allow Gilt Groupe to leverage their pre-existing relationships in the industry, while still capitalizing their investment in the technological infrastructure of their platform.

An interesting read, Ramiro. Many thanks. I find it fascinating that the largest companies in the hospitality space own no real estate (i.e. AirBnB), in the transport space own no automobiles (i.e. Uber), and in the media space create no content (i.e. Facebook), all of which speak to the opportunity around and impact of the sharing economy.

You bring up the issue of users commercializing AirBnB. While I understand the concerns around safety given the number of different AirBnB customers using a particular property, I’m not entirely convinced that there should be any regulation barring property owners from dedicating multiple properties to AirBnB. Perhaps if AirBnB were to increase the stringency of its background checks, this might become a viable business model in and of itself.

On November 20, 2016, SDB commented on Is Facebook becoming a news site? :

Thanks, Jordan. A really thoughtful post that is definitely relevant to just about everyone. I agree that Facebook has become an important news source for our generation, so the statistics that you cite about the proportion of young adults consuming news through Facebook, though meaningful, are unsurprising.

To your point about the echo-chamber, our most recent election is a perfect exemplification. Personally, I do consume much of my news through Facebook, and was hard-pressed to find any articles in support of the opposing party. Perhaps Facebook should allow varied news sources to post directly on our newsfeeds in order to provide a more balanced view, assuming of course, that users opt in to this sort of arrangement.

On the veracity of articles, I wonder whether it falls upon Facebook to fact-check the pieces that are posted. Perhaps because they simply provide the platform, without affiliation to the sources or authors, they could make the argument that they should not be held responsible for the credibility of the information that is published. Further, and you touch upon this, presumably publishing false or otherwise erroneous information should be a self-correcting mechanism whereby the less reliable a source is perceived to be, the less often it will be relied upon or posted by Facebook users.

On November 6, 2016, SDB commented on The Future of Leather :

Thank you for the post, Nico. Very impactful to compare and contrast such different approaches to ultimately creating the same product. Assuming that truly these would be substitute goods, I find it hard to imagine a scenario where a consumer would opt for a TLF product over ModMed leather.

Further, I wonder whether there might be additional opportunities to reapply this technology to other presently controversial animal products such as furs. Assuming their product launch is a success in the coming year, there could be opportunities to explore those sorts of avenues as well.

In any event, you rightly point out that regulation, in this industry and in others, will inevitably head toward more environmentally sound standards, and corporates would be wise to front-run this trend in order not only to remain competitive, but in some cases, even to remain solvent.

On November 6, 2016, SDB commented on H&M: Root of the Problem or Key to a Solution? :

Thanks for the post. Though I have definitely shopped there before, I had no idea H&M was such a massive business, nor did I appreciate that the retail industry was the second most pollutive after oil, accounting for 10% of carbon emissions.

You mentioned the staggering figures around the amount of clothes that are thrown away in the United States alone. It would be interesting to know what proportion of discarded clothing is accounted for by fast fashion. Given their ability to underprice most competitors, it would be fair to assume that fast fashion shops must, at least to some extent, compromise on quality. Taking that one step further, would it be fair to assume that we are more likely to do away with our H&M clothing due to lack of quality or durability? Should they consider upping their price point in order to mitigate the corresponding environmental impact?

Good to know that they are exploring initiatives that involve recycled materials. On the point of inputs though, it would be helpful to learn whether they are operating efficiently in the steps leading up to the assembly of finished products. As we saw with IKEA, perhaps a combination of increasing their standards, vertical integration, in addition to the incorporation of recycled materials, would best mitigate their carbon footprint.

On November 6, 2016, SDB commented on Bye-Bye Beautiful Bivalves :

Michelle, great post. Love me some bivalves as well, so thanks for your concern. I agree that there are two key considerations here: how to respond from an environmental standpoint, and what to do from the point of view of the business.

To the former, I am impressed by the level of sophistication of their processes for tracking the growth of the oysters and the corresponding conditions of the water. I would be curious if these technologies are reapplied outside the context of the oyster industry in order to track the overall well-being of bodies of water elsewhere. In other words, their might be an important benefit to information and technology sharing when it comes to gauging the overall cleanliness and health water sources. It would be important to keep locals informed in this regard in order to generate broader concern about the issue.

On the latter point, Hog Island Oyster Co. is right to diversify away from its current location (i.e. Cali), to strengthen its distribution network, and to consider whether an outright relocation might be necessary down the line. I wonder whether it might be more cost effective to simply recreate the desired “merroir” conditions artificially. Given that their current technology can alter PH balances in a natural context, could producing oysters in a some sort of lab be a viable business strategy going forward?

On November 6, 2016, SDB commented on As the Maldives sinks, the world plays the fiddle :

An important example of the cataclysmic consequences of climate change. Thank you, Alex.

I was troubled by the rate of decline that you noted, especially as the Maldives, with their limited carbon footprint, are effectively paying the bill for the recklessness of larger, significantly more pollutive nations. They would be right to underscore this unfair dynamic when lobbying multilaterals and other countries for their support.

You mention a few concrete steps that could be taken in order to mitigate the problem at hand, e.g. reinforcement of barrier reefs to forestall erosion, and the improvement of infrastructure and homes to protect against inclement weather. I wonder whether – or in what proportion – the government of the Maldives has redirected revenues from tourism to this end.

Perhaps the government of the Maldives could partner with corporates that operate in the Indian Ocean. Certainly, many regional corporates are in need of offsetting their carbon footprints. Given awareness around the desperate situation in the Maldives, corporates might benefit from a corporate social responsibility standpoint, by publicly committing to take on this important challenge.

On November 6, 2016, SDB commented on What Can Brown Do For You? Innovate! :

Thanks for sharing, Cheng-a-ling. The facts you mention about their scale are nothing short of staggering. As such, it makes sense carbon footprint would be considerable, and that therefore, the environmental burden of responsibility for UPS becomes that much more pressing.

I agree that 6.5% is an unimpressive target for the proportion of their fleet that uses alternative energy. Costly as it may be, increasing this figure, even progressively, would be a step in the right direction. What’s more, that cost might be offset by a boost in public perception and increased market share, assuming that their push to be green is marketed effectively. Subsequently, it would be important for UPS to transition their fleet, especially the less environmentally friendly vehicles, in a sustainable way.

Great to hear that they are thoughtful about carbon neutral shipping options, and route optimization. Another interesting question is whether they have room to become more sustainable in terms of their packaging. My hope would be that they aim someday to use only bio-degradable and recyclable materials that are created through environmentally friendly processes. An important corollary here – going back to the point of marketing – would be the education of the end-consumer. Only through this sort of education can there be a systematic shift in terms of the standards that we, as consumers, demand from the companies we support.