I really enjoyed this article, especially for the dramatic end! One thing that might be interesting context, is how this fits into GE’s broader strategy of becoming a “top 10 software company” by 2020. Moving into software has been a huge push for the company, and Jeff Immelt has been re-configuring the organization around this strategy starting last year, even requiring all new hires to know how to code. As part of this, they built a new software headquarters out in Silicon Valley. It’s still quite a big outstanding question whether the company will be successful in this or not (e.g., whether they would be better off just partnering with startups like Quirky or to build the capabilities in house), but the idea is to essentially vertically integrate the company from the hardware, to the data collection software analytics. Here’s a good article from the summer about their push into digital and how they view the threat as an existential one: http://www.nytimes.com/2016/08/28/technology/ge-the-124-year-old-software-start-up.html
Great article! I didn’t know that much about Burberry’s strategy until reading your post. I was actually expecting that the company would have used “digital” in a different way–more in line with H&M and other fast fashion brands to source trends more quickly, update styles with quicker turn around times, and hyper-tailorize offers to specific locations. Instead, it’s interesting that they took the approach of using digital to try to make the experience in the store feel personal and tailored. They might be missing a big opportunity to better connect with customers through better designers and more feedback directly from customer data. Again, when you mentioned putting technology in mirrors, I almost expected this to be a way to watch customer engagement with products, analyze reactions and shopping behaviors, and collect other data. But instead it seems like it’s a way to simply match customers to certain products (from what I Googled online about it, but I could be wrong!). And Shane G. (above in the comments) mentioned the departure of Angela Ahrendts in 2014–it must be hard for the company to continue to execute on this strategy to the full breadth that she had maybe originally envisioned (in part because she left, but also because the technology landscape continues to evolve so rapidly in the consumer segment). Again, great post!
When thinking about future growth, I thought it was fascinating that the CEO acknowledged the possibility of entertainment substitutes from VR and hallucinogenic drugs (http://www.theverge.com/2016/10/24/13400254/netflix-reed-hastings-replace-movies-tv-drugs). Maybe the transformation that we’ve seen in distribution will actually be a drop in the bucket compared the transformation on the horizon due to even strong technological forces. These could impact the content itself more than the distribution. There’s a terrific non-fiction book about the end of the silent film era, the End of the Parade, which interviews the old actors, directors and artists the made the silent film era possible. They were wholly unprepared for the new medium of sound and color into film, and were largely left behind while a new cadre of artists and studios took charge. Perhaps Netflix will be able to adapt and shape the emerging field of VR entertainment and not limit it self to the traditional movie format.
Otto is the best! One of the interesting things about the acquisition by Uber is an issue that was raised in the Watson case–talent poaching. Anthony Levandowski (the Otto CEO) was one of the early guys that started Google’s self driving efforts, and it’s telling that after the Otto acquisition Uber put Levandowski in charge of all of their self-driving efforts. It was an area that the company had stated was the key to making their business model work from a cost perspective (e.g., eliminating the driver), and it seems like they needed to find talent from outside to really make progress. Lior Ron was also part of the Otto founding team and he was formerly the head of Google Maps–maps being another area where Uber was struggling to create an alternative best in class capability.
And per syu’s comment above, here’s a map of the most common job by state and trucker driver is the most common in a surprising number of states: http://www.npr.org/sections/money/2015/02/05/382664837/map-the-most-common-job-in-every-state
Great post, Caroline! I have a friend working on a startup in the tele-health space and was talking to her this weekend about the opportunities and challenges this kind of technology faces. A lot of diagnosis by a doctor is in very subtle body, behavioral and non-verbal cues, which risk getting lost via a digital solution like a video appointment. One way around this that my friend’s company is exploring is to augment the doctor with machine learning that can process the video feed in real time to look for flags for specific conditions. This could eventually also help reduce the amount of time doctors and physicians need to spend in these kinds of first or second time visits, which would also help on the cost side of the equation.
Another avenue that Vail has pursued, along with other ski operators, has been to try to smooth revenues out over the entire year–rather than just the ski season. As Rachel pointed out above, these resorts are quite beautiful during the summer. I used to ski at Jackson Hole growing up and all of the locals would say that the resort was actually more crowded during the summer than it was during the winter. The challenge in this strategy, however, is that it increases the length in which the assets of the resort are in operation and will likely have a negative impact on their lifecycle–everything from ski lifts, to restaurants, hotels, roads, etc. Another big challenge will be in protecting the overall ecosystem from continual human activity.
Great article, tech rep! One curve ball to the situation at Tesla could also be further regulation of the broader energy industry, which is all the more important given it’s recent merger with Solar City. One of the big constraints in adopting the broader battery technology outside of car use is the regulation of the electric grid by major players which don’t allow consumers to substantially add supply to the grid. A change in this dynamic, could substantially increase the revenues that Tesla generates not just from cars but more broadly from the Solar City business and either push it to profitability or keep it lagging behind investor expectations. http://money.cnn.com/2016/11/01/technology/tesla-solar-city-merger/
An interesting analysis that could add some additional perspective would be to compare the carbon footprint of a traveller on the same route but using air travel. I remember back when I was working in consulting, this article in the New York Times circulated widely about how air travel was one of the biggest contributors to a person’s carbon footprint: http://www.nytimes.com/2013/01/27/sunday-review/the-biggest-carbon-sin-air-travel.html. Anchoring people’s frame of reference to something more tangible could help in contextualizing just how big of a contribution the cruise industry is making to the climate change problem.
Enjoyed the article! I thought CPC has some really good points related to pricing in the comments above. I looked at a couple of paper and plastic companies when I worked in private equity, and everyone would always say that the most important driver for moving into post-consumer recyclables was the spread between original (virgin) material and recycled material. The really savvy companies would hedge and arbitrage this spread in order to protect their margins and pricing. The other big trend that I noticed, was a shift into higher end packaging to make products more experiential. It was unclear whether you could achieve the same high end look and feel that consumers wanted while still using recycled materials. Perhaps regulatory incentives can affect the supply / demand equation to nudge consumers and producers to more ecologically friendly alternatives. It looks like the Environmental Paper Network is starting to try to do some of this: https://s3.amazonaws.com/EPNPaperCalc/documents/Paperwork.pdf
Great article! Like Zach, oh how I love Apple. What caught my attention was the initial screenshot of the Apple headquarters and the ending paragraphs about their efforts to improve sustainability at facilities (notably their corporate headquarters). One thing that’s always surprised me about the tech industry in Silicon Valley is it’s embrace of the suburban American landscape, and in particular the way it which it continues to double down on car-centric corporate offices. I would always joke I often felt more that I lived in LA than SF when in the Bay Area, and it’s interesting to see the problem continue to exacerbate as the industry grows (driven not just by tech expansion, but also by the need for people to live further and further away in order to afford rent and housing): http://www.mercurynews.com/2016/11/02/job-boom-intensifies-traffic-and-housing-woes/