The Weekly: Edition #85 - February 19th, 2021
Convenience
"It's impossible to imagine a future 10 years from now where a customer comes up and says, 'Jeff I love Amazon; I just wish the prices were a little higher,' [or] 'I love Amazon; I just wish you'd deliver a little more slowly.' Impossible." - Jeff Bezos
Most weeks we like to share our thoughts on a particular topic or article. But on rare occasions, there are broad themes that show up in multiple articles that are too significant to pass over. This week is one of those weeks.
If you don't remember anything else from this edition, remember this: the modern consumer generally optimizes their life for convenience.
Simply put:
"People buy 4 things and 4 things only. Ever. Those 4 things are time, money, sex, and approval/peace of mind. If you try selling something other than those 4 things' you will fail."
Time is the only one of the four that no one can buy more of, so the more you can create built-in convenience for your stakeholders, the better off your business will be. This week, we couldn't help but notice how convenience is powering the biggest businesses in America to next-level growth and upending entire industries overnight.
Let's start with Netflix. In this wonderful HBR piece, Bill Taylor explains how the company is using its troves of data to more efficiently deliver best-in-class entertainment to customers and save them time in identifying what to watch - all from their couch! Convenience in entertainment, at scale.
Next, there's the rise of semi or full-scale ghost kitchens. Chipotle, Chick-Fil-A, and the rise of ghost kitchens has proven that something has fundamentally changed in the food and beverage industry. Using efficient drive-in and ghost kitchen operations, these organizations are able to give the customers what they want. Convenience in food, at scale.
Then there's the struggling events industry, determined to reinvent itself in a digital-only world until the pandemic blows over. As it turns out, convention centers and event planning businesses are the best equipped to provide a convenient option for large scale covid-19 vaccination rollouts. Empty spaces that allow for social distancing and efficient logistics operations are all useful in the vaccination effort and allow for meaningful work during a dark period for the industry. Convenience in healthcare, at scale.
Indeed, even remote work offers a lesson in convenience as it applies to employees. The partially remote option is a wonderful option for great employees that have no plans to move across the world to work, love where they live, but desire a little more flexibility and a little less commute time each week. Allowing for a more flexible work environment will help retain employees while maintaining a physical connection to the organization.
As Jeff Bezos intuitively understood, people are never satisfied and will always expect more as the boundary of what is possible is pushed. The more your business can optimize for quick, convenient service or optimize your product for ease-of-use, the more your business will grow.
The question we are asking ourselves this week is this: how can we use our organization's resources to make life more convenient for our stakeholders?
To see the future of competition, look at Netflix (Harvard Business Review)
+ "Big data is powerful, but big data plus big ideas is transformational. Netflix is a technology juggernaut whose analytics, algorithms, and digital-streaming innovations have changed how customers watch movies and TV shows. But this technology has always been in service of a unique point of view — building a platform that shapes what customers watch, not just how they watch. The company has vast amounts of data on the viewing habits of its 125 million subscribers, from which movies and TV shows they liked or disliked to how long they watched an individual episode or how much they binged a new series. This powerful data system creates a rich social system that influences the movies and shows members see, based in part on which shows they’ve liked in the past what other subscribers see and like."
How a shadow army of ghost kitchens took over America’s restaurants (Marker Media)
+ "On a recent winter afternoon, I trekked an hour north of New York City to see it for myself. From the outset, it was more or less what you’d expect at a Chipotle. Those familiar concrete floors and that minimalist steel-and-plywood design aesthetic, plus pop music overhead and the smell of grilled onions and peppers. One major difference, of course, is that it was eerily devoid of actual customers jamming themselves into small communal tables and lurking near seats that might open up. That this newfangled, online-only Chipotle didn’t even have a bathroom truly drove home the grab-and-go motif a little more forcefully than I would have liked, especially after a long drive. Still, the fact that this store debuted after a quarter in which Chipotle saw its digital sales triple from the previous year clearly demonstrates that something fundamental has changed."
The story of a Boston events business during coronavirus (Boston Globe)
+ "She frets about what seem to her to be haphazard restrictions that allow shopping malls to remain open but cut off trade shows and similar corporate events. By one industry estimate, 50,000 people in Massachusetts’ business events workforce have been laid off and $250 million a month is being drained from the state’s economy. A nationwide study found that nearly 40 percent of business-events companies are at risk of going under."
The battery is ready to power the world (Wall Street Journal)
+ "Rechargeable lithium-ion batteries were first commercially used in hand-held camcorders in 1991. Laptops soon followed. A decade later, batteries enabled the rise of tech titans such as Apple Inc. by powering smartphones and wearable devices, then made their way into electric vehicles. The basic technology throughout remained pretty much the same: Lithium ions move through a liquid from the cathode to the anode, and back again. This, however, was just the beginning. After a decade of rapidly falling costs, the battery has reached a tipping point. No longer just for consumer products, it is poised to transform the way the world uses power."
To plug a pension gap, this city rented its streets. To itself. (New York Times)
+ "It works like this: The city creates a dummy corporation to hold assets and then rents them. The corporation then issues bonds and sends the proceeds back to the city, which sends the cash to its pension fund to cover its shortfall. These bonds attract investors — who are desperate for yield in a world of near-zero interest rates — by offering a rate of return that’s slightly higher than similar financial assets. In turn, the pension fund invests the money raised by those bonds in other assets that are expected to generate a higher return over time. If they can pull off the strategy, cities issuing these bonds can reduce their pension bills by an amount that’s the difference between what they earn and what they pay out. But as with any strategy based on long-term assumptions, there is risk."
Why the $1.1 trillion live events industry is pivoting to vaccine logistics (Marker Media)
+ "Look more closely and you’ll see logos showing that the site is being operated by a company called CIC, which usually manages co-working spaces. Another company, DMSE Sports, which normally directs running events including the Boston Marathon, is handling the logistics. DMSE’s involvement makes sense, said founder Dave McGillivray, because the vaccination process “is like a race.” He gestures around the busy scene: “There’s the parking, there’s the course they go through, there’s the finish.” A clock normally used to show runners their pace is keeping time for people waiting to make sure they don’t have side effects."
The state of remote work (Owl Labs)
+ "Despite difficult circumstances for working remotely, 77% of respondents agree that after COVID-19, having the option to work from home would make them happier. Leaders and managers: 80% of full-time workers expect to work from home at least three times per week after COVID-19 guidelines are lifted and companies and workspaces are able to re-open."
Natural gas skyrockets again to $500 as blackouts spread in U.S. (Bloomberg)
+ "Natural gas for physical delivery in the U.S. was trading for as much as $500 per million British thermal units on Monday as demand for the heating and power plant fuel soared amid a deep freeze. Gas at two hubs in the U.S. Midcontinent was trading at $500 per mmBtu and went for $240 at a third on Monday, according to traders. Spot gas has been trading for hundreds of dollars across the central U.S. since Thursday with a surge in heating demand triggering widespread blackouts and sending electricity prices soaring. The fuel normally trades in the region for less than $3 per mmBtu."
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