The Weekly: Edition #23 - December 13, 2019
Lessons from 24 years of operating: Bowl America, Inc. (Macro-Ops)
+ Bowl America's letters to shareholders read like a combination of a customer service policy, owner's manual, and survival manual wrapped into one. Our key takeaways from a 55-year profitable run in the bowling business included:
1. It is preferable for as many employees as possible to have skin in the game for alignment of interests. Employees were stockholders in the company, but more importantly, most were avid bowlers and loved the sport. They had double the incentive to ensure the company did well: it lined their pockets and furthered the interests of their sport.
2. Minimize fixed, debt-like obligations (mortgages, leases, etc.) to maximize flexibility in the tough times. This gives greater flexibility during tough times even if it stunts growth in the present. By abstaining from leverage, a business owner is choosing a stronger financial position over higher growth. A clean balance sheet weathers all storms.
3. Obsess about customer service. "Excellent customer service is a large competitive advantage. It’s also one of the hardest to achieve. Top-notch customer service requires employees to buy-in to the company’s long-term vision. Not only that, employees must enjoy working for the company. Reward your employees and they’ll reward the business." See #1. Customer service starts by empowering and rewarding employees to buy in to the company's vision and ultimate success.
4. Look for opportunities to stockpile capital and inventory at below replacement cost. This gives you a cost advantage over competitors. It is the ultimate form of deep value investing - more commonly known as 'bargain hunting' and 'thrift shopping.'
5. Sell a product or service that you believe in. Leslie Goldberg believed that bowling was a key piece in a neighborhood's social fabric - how else can you stay in a business for 55 years (and be profitable every single year) if you don't believe in the product you sell and the benefits to the community?
The future of parcel delivery: drones and disruption (McKinsey & Co.)
+ "Everybody likes to get a package. In 2020, we’ll send more than 100 billion of them—and that number could double by 2030. Who will deliver all those packages, and how? In this edition, The Next Normal explores what’s ahead in last-mile parcel delivery."
Delivering growth: the impact of third-party platform ordering on restaurants (Deloitte)
+ "According to the Uber Eats survey, the share of restaurants on its platform that reported an overall increase in sales after joining was 69% in London, 74% in Paris, and 67% in Warsaw, with this slightly lower at 59% in Madrid."
The 'Amazon Effect' is flooding the recycling system with cardboard (Verge)
+ "Last year, Cyber Monday was the biggest shopping day for Amazon in the history of the company. The trend extends beyond the holidays: US Postal Service deliveries have doubled to 6.2 billion in 2018, from 3.1 billion in 2009."
Ecommerce made warehouses hot, now investors are warming to cold storage (Wall Street Journal $)
+ Storing physical items is big business - self storage, warehousing, and now cold storage have all attracted increasing amounts of capital over the past decade as Americans need more storage for goods and demand quicker delivery times for items bought online.
Oil is the new data (Logic Mag)
+ While the author's points on the climate impacts of fossil fuels are well-intended, the deeper lesson to learn here is the impact of artificial intelligence and machine learning on traditional engineering trades such as oil and gas exploration. As artificial intelligence capabilities continue to improve and expand into more and more industries, it is worth studying how your business's functions could be improved by employing these technologies.
Gazing into the recession crystal ball (Reuters)
+ Predicting a recession is a tall task, but understanding where we stand in the business cycle is important for business owners for strategic and planning purposes.
What happens when a wedding influencer gets divorced? (New York Times)
+ This piece is a useful lesson illustrating the risks of mixing personal and professional brands.
Lessons on business partnerships by renowned couples therapist Esther Perel (First Round Review)
+ Business partnerships can be similar in a sense to marriages - and can exhibit the same types of frustrations, arguments, and problems. Esther Perel digs into how to resolve some of the most common problems that plague startup founders and partnerships.
52 things I learned in 2019 (Tom Whitwell)
+ "At least three private companies have fallen victim to ‘deep fake’ audio fraud. In each case, a computerised voice clone of the company CEO “called a senior financial officer to request an urgent money transfer.” [Kaveh Waddell, Jennifer A. Kingson]"
Ghost ships, crop circles, and soft gold: A GPS mystery in Shanghai (MIT Technology Review)
+ No one can figure out how rogue hackers spoofed GPS systems into thinking they were elsewhere in Shanghai - is this the Chinese government or run-of-the-mill hackers?
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