This was a really great post, and I really enjoyed reading about Harry’s!! I’ve never been to a store but reading this definitely makes me want to go to one!
I have to wonder though, with the Warby Parkers and Harry’s of the world, what are the potential downsides to their model? There’s been a lot of hype, and I definitely love Warby Parker personally, but I wonder if in the long term they can maintain their model as they scale to the level of a market leader in terms of market share. Because at some point, it makes sense for certain parts of the supply chain to be run by specialists, especially at a larger scale, right? Or maybe it doesn’t and they can maintain their vertically integrated model!!
Definitely excited to watch and see what happens!!
Great article!! Loved hearing your take on Vice! What do you think will happen to their media strategy in the context of the media distribution war happening between Netflix, HBO, all the networks, Google, Apple, Amazon, etc? How does vice fit into all of that as a content creator?
Great article, really loved reading your take on Microsoft’s operating model!
You mentioned how they are empowering the employees to be bold and take risks with developing ground breaking technology. Definitely agree on this point! One thing that drives home your observation is the recent move Microsoft took to remove their stack ranking — a yearly employee evaluation program that graded everyone on a forced curve, regardless of objective performance. If you were on all star, but happened to be the “lowest” performer on an incredible all star team, you were given the lowest rating and lowest bonus! So you actually had an incentive to 1) hope that your fellow employees did worse than you and 2) surround yourself with worse talent to ensure you got a better stack ranking. Not a very collaborative performance incentive!
You bring up great points! One could definitely take the provocative “engineering talent arbitrage” phrasing I bought to the assignment and apply it to almost any other consultancy or company that contracts large amounts of labor.
If I were to make any argument that it’s slightly more applicable to Palantir, it would be that Palantir is finally bringing to fruition the promises of taking advantage of all the “Big Data” these companies have been sitting on trying by applying both their core product as well as the top tier talent they deploy on site for years for various projects.
Some of the conversations I’ve had with employees at these agencies indicate that they’re not unaware of the value of their data, but that they just don’t have the resources or technical know how of how to bring it all together — then comes in Palantir, that have both the engineering talent and core product to unlock that value, and then charge a premium for it, which is where I guess the “arbitrage” pricing comes into play.
And you’re right — they do offer 3 great products that are incredibly powerful, and I don’t mean to downplay that they absolutely have a powerful technology offering for their clients.
I’ve heard though that one of the limiting factors for their ability to scale is that they need to hire just as many “FDEs” or Forward Deployed Engineers to linearly with their increasing number of clients. They’ve been recruiting like crazy because they have greater demand than they can supply, and part of the reason is that they don’t have enough engineers to deploy to meet that demand. One of the things they’re trying to do is make their product more scalable so that it requires less high touch involvement of these engineers to implement, and if they succeed in this regard then I’d definitely change my view! 🙂