Excellent post Mike, I really enjoyed it (especially the s-b word combination at the beginning)!
It’s amazing how they were able to infuse a new vision to an old, rigid industry as hotel lodging. I wonder what the future holds for YOTEL in terms of growth strategy. Given that the lodging industry is so fragmented, they could easily climb their way to a regional protagonist role. YOTEL’s economics seem to be very attractive to self-finance that journey (especially taking into account they are bypassing most of the labor expense, so significant for every hotel, and minimizing the capital expenditures required to acquire large buildings to accommodate spacious rooms), but I think large global players, recently active in the M&A scene, will eventually try to engulf YOTEL (1). In my opinion, the main driver behind a potential acquisition wouldn’t be the opportunity to acquire an additional revenue growth source; rather, the neutralization of a player that could disrupt the industry’s bar for what a “reasonable” price is, which would present a significant financial challenge for traditional players that are bound with the weight of bulky footprints and massive workforces.
(1) USA Today, “Marriott, Starwood merger is complete, loyalty programs will reciprocate,” http://www.usatoday.com/story/travel/roadwarriorvoices/2016/09/23/marriott-starwood-merger-complete-and-loyal-customers-get-reciprocal-benefits/90885318/, accessed November 18, 2016
I wonder if this bold move by UPS is the right one. I understand there is value in trying to prevent being disrupted by a new entrant, but I think this move is especially risky. Besides the obvious focus dilution that UPS will face for entering a business outside its core, I believe the 3-D printing industry is facing stronger than expected headwinds in its nascent stage. It seems to be trapped in a place where it is too dependent on traditional manufacturing to lift off and, apparently, it hasn’t gathered the necessary momentum to accelerate its path down the learning curve and become an economically competitive alternative (1). Until that happens, UPS’s clients won’t have enough incentives to demand the new 3-D printing service, and UPS is at risk of holding onto a yet-impractical, potentially money-losing, service.
(1) Newsweek, “The 3-D printing bubble may have burst”,” http://www.newsweek.com/2016/06/24/3d-printing-makerbot-stratasys-469704.html, accessed November 18, 2016
Very interesting company. Building on the final recommendation you give Descartes to strengthen its competitive position, I think the democratization of the company’s intelligence would help drug enforcing agencies throughout the world, especially those operating in areas where terrestrial patrolling is complicated. As pointed out by the World Drug Report, there are some agencies already using satellites to look for drug plantations; nevertheless, the current model requires those agencies to purchase a library of satellite images of areas typically associated with growing drugs, and then they proceed to examine them. (1) The new technology could enable these agencies to take a more divergent approach, taking extensive segments of land looking for areas that resemble drug plantations, instead of focusing in the same areas over and over. By casting their net wide, they could significantly increase the number of plantations detected and, more importantly, they could signal drug organizations that their vigilance is no longer constrained to “usual suspect” areas.
(1) United Nations Office on Drugs and Crime, “World Drug Report 2010,” https://books.google.com.mx/books?id=HB9PuEhHahQC, accessed November 18, 2016
I wonder how will services like DriveNow be affected by self driving capabilities. The example that naturally comes to mind is Uber with its newly deployed self driving cars in Pittsburgh. Even though this is an exciting innovation, it relies on the model of having a self driving car for the sake of providing a service to move people around (1). On the other hand, I think Elon Musk’s plans for Tesla self driving capabilities are a step beyond, given that it will rather focus on a model of having your private car, whose main purpose is your own movement and recreation, go and provide a transportation service for other people. In my opinion, that will be a game changer and will further improve the overall efficiency of the car fleet, given that the line dividing the private and public usage of a car will be blurred (2).
(1) Tech Crunch, “Uber starts self-driving car pickups in Pittsburgh,” https://techcrunch.com/2016/09/14/1386711/, accessed November 18, 2016
(2) CNBC, “Elon Musk says: ‘It’s not Tesla vs Uber. It is the people vs Uber’,” http://www.cnbc.com/2016/10/26/elon-musk-says-its-not-tesla-vs-uber-it-is-the-people-vs-uber.html, accessed November 18, 2016
Interesting post. I agree with you on the potentially increased restrictions that might arise from the Trump administration. If stringent trade regulations were to put into place, I wonder whether Flexport could eventually assume a political role: based on the massive amount of data it gathers, it could provide strong evidence to exclude certain products or industries from those regulations, on the basis that it would be dramatically more expensive and inefficient to enforce them. As food for thought, the components of the cars that are exported from Mexico to the US, on average cross the border 8 times throughout the manufacturing cycle. (1) Imagine how large must the savings involved in the process be to justify such complex movement. How would the Trump administration account for the economic impact of vanishing those savings?
(1) Rocha Humberto, “Quien gane en EU no debe cambiar TLC: Carlos Salinas de Gortari,” El Universalhttp://www.eluniversal.com.mx/articulo/nacion/politica/2016/11/7/quien-gane-en-eu-no-debe-cambiar-tlc-carlos-salinas, accessed November 17, 2016
Interesting article on a company I´ve looked up to for a long time. I think the only element that is strong enough to push companies to embrace clean energy sources is a financial incentive, and I´m convinced that this will be particularly true for a company that has faced pressure from financial markets to become profitable for so many years, such as Amazon. The market has been fairly patient with Amazon, but I wonder if they would be welcoming to sustainability, environmentally-friendly initiatives at the company. In my opinion, if there is not a financial benefit to doing this, the company will “kick” its implementation down the road. (1)
(1) International Business Times, “Amazon: Nearly 20 Years In Business And It Still Doesn’t Make Money, But Investors Don’t Seem To Care,” December 18, 2013, retrieved on November 7, 2016, from http://www.ibtimes.com/amazon-nearly-20-years-business-it-still-doesnt-make-money-investors-dont-seem-care-1513368
Interesting topic. Managing political pressure with companies that broke environment regulations has happened also in Mexico. A couple years ago, Grupo Mexico, the largest mining company in Mexico and one of the largest worldwide, overlook basic waste disposal measures and spilled contaminants into Rio Sonora, in the northwest of Mexico; per some accounts, it was the greatest environmental disaster in Mexico´s history. The authorities eventually required Grupo Mexico to make up for the damage done (eg. provide fresh water and medical attention to affected families). Though the company committed to meeting the penalty, the local government has complained that GM hasn´t met the conditions imposed yet. Unfortunately, this topic has fallen out of the main media discussion forums and the pressure of public opinion will likely not be there to push for the right cause. (1)
(1) Excelsior, “Grupo México incumplió compromisos con Río Sonora: Pavlovich,” August 18, 2016, retrieved on November 7, 2016 from http://www.excelsior.com.mx/nacional/2016/08/10/1109975
Thanks for the post. I think Tesla’s newly introduced Solar Rooftop (conveniently placed right before the shareholders vote on whether to approve Tesla´s and Solarcity´s merger) is the final piece that was missing from the complete, off-the-grid renewable energy for every household. Besides its solid technical specifications (eg. 98% efficiency as a regular solar panel), the Solar Rooftop seems like a very convenient, beautiful addition that could be massively adopted by millions of household in the US and the rest of the world. Following Tesla´s tradition, this roof tiles will pack outstanding performance in a great design. The key remaining question, for me, will be the product´s price point. Will it be accessible enough to fuel this market´s exponential growth? (1)
(1) Bloomberg, “No One Saw Tesla’s Solar Roof Coming,” October 31, 2016 retrieved on November 7, 2016, from https://www.bloomberg.com/news/articles/2016-10-31/no-one-saw-tesla-s-solar-roof-coming
Thanks for the highly relatable article. I think Miami (and, in general, first-world cities at risk) will have the resources and foresight to address the rising sea level issue effectively. One main concern is how are developing countries going to cope with the situation. Per some accounts, many of the cities at higher risk from a higher sea are located in developing countries, which face an entirely different situation in terms of planning and financial resource readiness: several cities in Southeast Asia and Subsaharan Africa lead the projections on exposed population worldwide. Will poor and emerging markets get the focus and money on time to avoid catastrophe?
(1) The Guardian, “Global sea levels are rising fast, so where does that leave the cities most at risk?,” October 16, 2016, retrieved on November 7, 2016, from https://www.theguardian.com/cities/2016/oct/14/global-sea-levels-rising-fast-cities-most-at-risk-flooding-un-habitat
Interesting industry. One of the most relevant business partner to 3G, Burger King´s owner, is Warren Buffet. Mr. Buffet´s grandson, Howard, is currently developing “the Berskhire Hathaway of sustainable investments”. I believe eventually Mr. Howard Buffet´s findings will permeate to Burger King´s operation; probably the most complicated part of adopting these findings into Burger King´s business model, given that Warren Buffet´s firm and 3G will, as they have, prioritize financial performance above all things. Nevertheless, this will be a great opportunity to “upgrade” the mindset at Burger King, which could leverage a very wide portfolio of sustainable initiatives (especially on sourcing and recycling) from Berkshire´s portfolio companies. (1)
(1) Business Insider, “Warren Buffet´s grandson is trying to create the Berkshire Hathaway of sustainable investments,” November 20, 2015, retrieved on November 7, 2016 from http://www.businessinsider.com/howard-buffett-starting-ix-investments-2015-11