Robby Kirkham's Profile

Dan – I really enjoyed this post. Education is something that affects everyone and Success’s novel operating structure clearly addresses several of the historical issues with low-income area schools. It is interesting, though, to consider their business model and how scalable it is. The network has faced criticism in recent years for “pushing out” students that fall behind (http://www.nytimes.com/2015/10/30/nyregion/at-a-success-academy-charter-school-singling-out-pupils-who-have-got-to-go.html?_r=0) and not backfilling open seats in later grades once students drop out. These policies provide an exceptional school environment for the bright and motivated students who can fit in at Success, but can that model serve an entire community? Having a budget that relies on 23% private funding also limits scalability. If there is a trade off in education between access and achievement, it sounds like the Success business model is heavily focused on achievement by creating a few “magnet” schools for a small number of high performing students. While certainly a valuable service, Success should clearly communicate this business model to attract the right student base, private funding, and government support as it continues to grow.

Ahmed – I enjoyed this post as traffic is something everyone has had to deal with. Your perspective on the importance of road efficiency is spot on and I also wonder what the best solutions are. Dynamic traffic lights are definitely an efficient way to improve road utilization, but are limited to short-haul transportation lanes (i.e. not highways). Changing speed limits and lane directions may present a safety concern as changing driving environments requires drivers to be more attentive in their daily commutes (to use TOM terminology, it increases variability in the processes). Real time warnings and alternative routing are probably the cheapest and easiest to implement (Google Maps and Waze are already doing this), but also create distractions for drivers who are now watching their cell phones for directions rather than the road.

In addition to improving efficiency on the existing assets, I optimistically think part of the solution will be adding additional infrastructure. Cities can build subway and bus systems that reduce car usage and even expand or supplement roads that experience the worst traffic. Unfortunately, though, these solutions take a lot more planning and funding and are therefore likely years away.

Art – I really enjoyed this post and your thoughtful insight on how Kinder Morgan targeted the underlying transportation infrastructure rather than the commodity products in the energy industry. As I think about the future of the business, I do have a couple of concerns, though: (i) supply-driven market changes and (ii) corporate structure.

(i) You pointed out how Kinder Morgan retrofitted certain crude pipelines to service NGLs, but the long lead times on new pipelines means the company is limited in how quickly it can react to bigger changes in the supply markets. For example, new oil coming out of the Bakken has been a boon for the BNSF railway in recent years as there is limited pipeline capacity set up to serve the geography.

(ii) I also wonder what the recent consolidation of the corporate structure means for the future. Kinder Morgan started the industry trend of creating Master Limited Partnerships to take advantage of the lower cost of capital for infrastructure assets. However, last year the GP and LP interests were consolidated (eliminating the Incentive Distribution Rights). I think this was done so the infrastructure assets would lower the cost of financing future growth, but worry that it may disrupt the historical alignment in the business and operating models.