Ged Carroll

Category: ideas | 想法 | 생각 | 考える

Ideas were at the at the heart of why I started this blog. One of the first posts that I wrote there being a sweet spot in the complexity of products based on the ideas of Dan Greer. I wrote about the first online election fought by Howard Dean, which now looks like a precursor to the Obama and Trump presidential bids.

I articulated a belief I still have in the benefits of USB thumb drives as the Thumb Drive Gospel. The odd rant about IT, a reflection on the power of loose social networks, thoughts on internet freedom – an idea that that I have come back to touch on numerous times over the years as the online environment has changed.

Many of the ideas that I discussed came from books like Kim and Mauborgne’s Blue Ocean Strategy.

I was able to provide an insider perspective on Brad Garlinghouse’s infamous Peanut Butter-gate debacle. It says a lot about the lack of leadership that Garlinghouse didn’t get fired for what was a power play. Garlinghouse has gone on to become CEO of Ripple.

I built on initial thoughts by Stephen Davies on the intersection between online and public relations with a particular focus on definition to try and come up with unifying ideas.

Or why thought leadership is a less useful idea than demonstrating authority of a particular subject.

I touched on various retailing ideas including the massive expansion in private label products with grades of ‘premiumness’.

I’ve also spent a good deal of time thinking about the role of technology to separate us from the hoi polloi. But this was about active choice rather than an algorithmic filter bubble.

 

  • The Power Law by Sebastian Mallaby

    The Power Law lays out VC history

    The Power Law: Venture Capital and the Art of Disruption does for the technology venture capital industry what Accidental Empires and Where Wizards Stay Up Late did for the technologists that they financed.

    The Power Law

    About the author Sebastian Mallaby

    Prior to reading The Power Law Mallaby wasn’t a familiar name to me. Looking into his background I could see why, Mallaby is a Washington Post columnist and specialises in international economics for the Council of Foreign Relations. A perfect CV for a policy wonk. His previous works have included a biography of Alan Greenspan, the World Bank and a book on hedge funds.

    What the book doesn’t cover

    The origins of modern venture capital in the pre-second world war era was through the family offices of people like the Wallenbergs and the Rockefellers. The Power Law only picks up the story post-war and has a distinct US bias in its storytelling.

    Synopsis of The Power Law

    George Doriot

    Mallaby starts the story with Georges Frédéric Doriot and the American Research and Development Corporation (ARDC). What’s interesting Doriot is how he was different from today’s VCs with a focus on patriotism. Doriot is most famous for his funding of Digital Equipment Corporation (DEC), an enterprise computer company whose mini-computers facilitated the early internet and many business computer systems. At the time of DEC, the Boston area seriously rivalled the Bay Area as the technology centre.

    Treacherous eight

    As the book goes into the story of Arthur Rock and his relationship with the treacherous eight who left Bill Shockley’s lab, this is where many Silicon Valley histories start to coalesce with The Power Law. Mallaby adds a little more, such as the 600x return that both the eight and Rock enjoyed from their investment. At 96, Rock is still alive at the time of writing. He is more recently remembered for his involvement of firing of Steve Jobs from Apple in 1985, a good deal of this came down to his distaste for Jobs informal appearance.

    Sandhill Road

    Arthur Rock and former Doriot student Bill Draper benefited from being in the right place and at the right time. The US government looked to spur innovation as part of the cold war and the Bay Area was were much of this innovation would happen. Sequoia and Kleiner Perkins followed soon after, these names are now central to the Sandhill Road venture capital ecosystem, but in 1972 they were just starting off with businesses like Atari. Atari wasn’t started by experienced business professionals, but by a twenty something who thought meetings in the hot tub were a good idea. Atari marked a point in time when VCs had to become the adults in room, or as Mallaby put it ‘active investors’.

    What I didn’t realise at the time was how early in Kleiner Perkin’s history was their engagement with biotech pioneer Genentech. I didn’t realise that Genentech was funded before Apple and was more a peer of Tandem Computers. Much of the early networking was based on a two-way door between established venture funded firms that were descendants of the treacherous eight and early venture capital firms that employed experienced executives as partners.

    Apple was notable for two reasons. Firstly, venture capital firms operated for the first time rather like an insurance syndicate with several funding the business rather than one large investor. Secondly, the returns on Apple seems to have solidified the model and bought niche financing to a wider awareness beyond the geographic pockets of the technology industry. Where many books like Accidental Empires would use this as a jumping off point to tell the story of the PC industry. The Power Law instead talks about computer networking, this makes sense if one thinks of Metcalfe’s Law as the power law that matters the most in the internet age. The early east coast venture capital community were more cautious than their west coast counterparts, partly because the east coast technology corridor had less of a loose network of connections compared to the west coast. I think that the different business culture of the east coast also had an effect.

    Connectors

    Doerr connected Cypress Semiconductor and Sun Microsystems, two companies that Kleiner Perkins funded so that they would make the SPARC RISC microprocessor. You could put this as the starting point for the golden age of UNIX servers and workstations – which we can trace forward to today’s Mac range and modern Google servers.

    Doerr had attempted other alliances before and in this way we see a different way how Metcalfe’s Law was the power law of the title. VCs has access to several nodes that they could connect together to try and build a technical vision. This is different to the idea we’re usually sold of the tech visionary / company founder a la the Google founders, Mark Zuckerberg or Steve Jobs.

    Meanwhile Don Valentine of Sequoia Capital usurped the founders of Cisco Systems and brought in a new team to run the business bilking the founders out of much of their money. Part of this was down to one of the original Cisco founders being a woman.

    Government money

    The VC industry of the early 1990s capitalised on government money. Netscape was a remake of Mosiac which was the first graphic internet browser software developed in the NCSA software design group. This was part of the government-funded National Center for Supercomputing Applications (NCSA) at the University of Illinois. UUNET was a commercial ISP based on the back of the ARPANET email delivery system. As the dotcom boom took off it was the largest ISP and the fastest growing. UUNET eventually became part of MCI WorldCom and then Verizon, where UUNET remains a key part of the Verizon business offering. Both Netscape and UUNET were viewed at VC successes but as The Power Law shows, the reality was more complicated.

    Irrational behaviour

    I thought that the original dot.com boom was irrational behaviour, but I learned from the account of GO Computers a decade or so earlier that irrational behaviour is very much in the blood of venture capital, which explains how we had WeWork and Uber in the 2010s which is where The Power Law finishes its tale. The funny thing about the irrational behaviour is that both the dot com era and the 2010s Softbank appear to have been an accelerant with their late stage momentum approach to venture capital deals which blew valuations on businesses up far beyond what would be reasonably expected otherwise. Softbank gave birth to ‘growth equity’ as a business model that took in many existing and new VC businesses including Russian Israeli Yuri Milner and his DST Ventures business which invested in Facebook, Stripe and GroupOn.

    Paul Graham and Peter Thiel

    Paul Graham was a founder of an ad tech business who then moved over to investing and had a reputation for warning startup founders about the nature of VC funding. It fitted neatly into the ‘John Gaunt’ type narrative that played well with some of his peers like Peter Thiel. The impact of these people setting an ideological agenda of sorts for Silicon Valley founders, together with a plethora of other founders providing seed capital to businesses from Google onwards greatly impacted the freedom of VCs to operate using their previous models and left the industry open for the Softbanks of the world to inflate everything.

    China off-note

    The Power Law offers a largely truimphantist view of the role of VCs such as Sequoia Capital in China. However, this seems to ignore the impact of Chinese VC and angel investors. It also chooses to ignore the negative impact of Xi Jingping.

    Conclusion

    Mallaby illuminates part of Silicon Valley history that I wasn’t familiar with, in particular VCs strategic role in steering technological change during the 1990s. Time has somewhat outpaced the book. The rise of Xi Jingping and the change in attitude towards safety and innovation amongst young Chinese is likely to make the China section look overly optimistic. The end of easy money, at least for the time being will impact the VC industry globally and growth equity looks like a folly during the present time. But if you want to understand how things were The Power Law is the ideal book for you.

  • Lost luggage & more things

    Lost luggage

    Qantas chaos: outsourced baggage handler says one in 10 bags not making flights | Qantas | The Guardian – this lost luggage mess is emblematic of what is happening globally. Delta Airlines put on a dedicated flight to repatriate 1,000 pieces of lost luggage that had been left behind in in London Heathrow airport. Lost luggage and other overwhelmed ground services has seen both Heathrow and Schiphol airport in Amsterdam cut flight numbers. Lost luggage will tarnish airline reputations.

    Rimowa pilots case as carry on luggage

    A poor experience on lost luggage will give discount airlines an opening, given that they will be supporting fuel related price increases anyway. These lost luggage problems will also help rail companies. I could see Eurostar running some ‘lost luggage’ response ads as a way of putting pressure on British Airways

    China

    Chinese nationalists celebrate Shinzo Abe shooting online, as some argue feeling happy is the normal reaction | South China Morning Post – you also had restaurants and other businesses rolling out special offers including 8.8 RMB discounts to celebrate Shinzo Abe’s death. It was interesting that this outpouring wasn’t censored and the stores not visited indicating Chinese government support for this ‘Chinazi‘ hatred

    China hotpot chain Haidilao spins off overseas unit | Financial Times – basically a hedge against China’s ongoing anti-COVID measures

    Consumer behaviour

    We weren’t meant to see this many beautiful faces – The Face – beauty overstimulation effect of Instagram culture

    Chinese consumer boycotts of foreign companies, 2008–2021 – basically they’re primed to behave like assholes

    As Netflix pivots, American attitudes shift to owning digital assets, not just streaming them | TechCrunch 

    Economics

    China’s image loses its shine in Europe | Financial Times – In the UK, Germany and France, only 14 per cent, 33 per cent and 41 per cent of people questioned in 2006 had an unfavourable view of China. Now, they stand at 69 per cent, 74 per cent and 68 per cent respectively. – its human rights, then military power, then economics and finally Chinese political interference. Central and eastern European’s governments joined hands with Beijing in launching an initiative known as the 16+1 format. It was meant to herald a new dawn of mutually beneficial co-operation. China managed to alienate all with the exception of Hungary and Serbia. The Chinese ignored the region fears of Russia and strong attachment to the US as the ultimate guarantor of each country’s independence – likely because of China’s laser focus on the US as its enemy. Serbia makes sense, Russia backed them during the break-up of Yugoslavia. Yugoslavia wasn’t ‘freed’ by the Soviet Union from Nazi occupation and Tito managed to maintain a distance from them. Hungary is the one that is more puzzling my perspective; the people were crushed in 1956 by Russian tanks when they tried to move away from communism

    The UK economy is stagnant — and the reasons run deep | Financial Times – the 15 years between 2004 and 2019 — pre-Covid and pre-Brexit — were the weakest for growth in gross domestic product per head since the years between 1919 and 1934. Low growth in GDP per head caused low growth in household real disposable incomes: those for non-pensioners rose by 12 per cent between 2004-05 and 2019-20. This can be compared to an average rise of 40 per cent every 15 years since 1961. Also significant have been changes in income distribution. Between 1980 and 1995, median non-pensioner household real disposable incomes rose by 37 per cent, but by 67 per cent for the top decile and only 3 per cent for the bottom one. Between 1992 and 2007, incomes rose by 41 per cent, 47 per cent and 37 per cent, respectively: growth then was both fast and widely shared, which was surely far better. But then, between 2004 and 2019, as median incomes rose by a mere 12 per cent, the top decile’s rose 11 per cent and the bottom’s 2 per cent: that was stagnation all round

    Trade War – by Dexter Roberts

    Finance

    Tymbals : What can Bitcoin teach us about marketing 

    Hong Kong

    ‘Hong Kong police’ threaten UK barristers of jailed tycoon Jimmy Lai | News | The Times – likely to be deniable middle men working on behalf of the government. You had similar middle men used to threaten, intimidate and assault the likes of journalists in the past. See also My testimony today about Hong Kong to the US Congressional-Executive Committee on China – the commentary of NSL related practices being used on non-NSL related charges is very interesting, showing a corrosion of the judiciary

    Hong Kong’s legacy — from Chris Patten’s Diaries to City on the Edge | Financial Times – Patten argues convincingly that for Britain or any other country to abandon liberal principles and yield to the Chinese Communist party’s demands at every opportunity brings neither political nor commercial benefits. The trade and investment statistics he cites from the final decades of British rule do indeed suggest there is little correlation between grovelling and real rewards for business & … “China’s decision [in 2020] to impose the national security law as a pre-emptive strike against a perceived revolutionary situation in Hong Kong amounts to the premature end of ‘One Country, Two Systems’ [the formula for autonomy] 27 years before the 2047 deadline,” Hung writes. “The cost of this move for China could be grave,” he concludes, at a time when the US is already seeking to curb Beijing’s technological and strategic ambitions and China still benefits from Hong Kong’s role as an internationally connected financial centre.

    Hong Kong IPOs: lithium giant’s disappointing listing spells trouble | Financial Times – if this isn’t a one-off then it asks big questions around Hong Kong’s ability to bring foreign capital into China. The lithium company is trading at a 60 precent discount to its price on the Shenzhen stock exchange

    Ideas

    Thinking About the Unthinkable in Ukraine | Foreign Affairs – with back-and-forth tactical nuclear shots is that Russia would be at an advantage because it possesses more tactical nuclear weapons than the United States does. That asymmetry would require U.S. policymakers to resort sooner to so-called strategic forces (intercontinental missiles or bombers) to keep the upper hand. That, in turn, would risk unleashing the all-out mutual destruction of the major powers’ homelands. Thus, both the tit-for-tat and the disproportionate retaliatory options pose dauntingly high risks. A less dangerous option would be to respond to a nuclear attack by launching an air campaign with conventional munitions alone against Russian military targets and mobilizing ground forces for potential deployment into the battle in Ukraine. This would be coupled with two strong public declarations. First, to dampen views of this low-level option as weak, NATO policymakers would emphasize that modern precision technology makes tactical nuclear weapons unnecessary for effectively striking targets that used to be considered vulnerable only to undiscriminating weapons of mass destruction. That would frame Russia’s resort to nuclear strikes as further evidence not only of its barbarism but of its military backwardness. Direct entry into the war at the conventional level would not neutralize panic in the West. But it would mean that Russia would be faced with the prospect of combat against a NATO that was substantially superior in nonnuclear forces, backed by a nuclear retaliatory capability, and less likely to remain restrained if Russia turned its nuclear strikes against U.S. rather than Ukrainian forces.

    Innovation

    €5.5m for 50 qubit photonic quantum computer – eeNews Europe

    Switzerland Moves Ahead With Underground Autonomous Cargo Delivery – IEEE Spectrum 

    IBM Announces Novel Advancement in 3D Wafer Stacking – ExtremeTech

    Japan

    Abe Shinzo: A retrospective – by Noah Smith – Noahpinion

    Marketing

    Ritson: ‘Most scary and remarkable bit of data I’ve ever seen’ – brands, marketers wasting 25% of budgets on loose and lazy briefs, remain delusional on how good they are | Mi3

    Media

    Leaked Videos Show Disney Is the Biggest Ad Tech Giant You’ve Never Heard Of – extremely off-brand usage of Disney characters by its advertising sales team

    Why more advertisers will see Amazon as a brand builder – The Media Leader 

    Why the Elizabeth line marks a new era for OOH design – The Media Leader – better integration into the built environment

    Hollywood won’t budge for Chinese censors anymore. Here’s what changed – CNN – talent in the Chinese industry had become stronger. Local stories told “in Mandarin and portrayed with Chinese sensibilities … naturally appeal to local audiences, particularly as you move from urban to rural markets,” he noted. “As Chinese producers venture further into the action and sci-fi genres in particular, where Hollywood dominated for many years, there will likely be increased competition from local fare.” – the pandering of Hollywood to the Chinese government has created a sector that will likely attempt to bury the US film industry

    A new study points out the biggest threat to the potential of TikTok as it lacks massive earnings for creators compared to rivals / Digital Information World and Nearly Half of Gen Z Prefers TikTok and Instagram Over Google Search – according to Google’s internal studies, “something like almost 40% of young people when they’re looking for a place for lunch, they don’t go to Google Maps or Search, they go to TikTok or Instagram.” Google confirmed this statistic to Insider, saying, “we face robust competition from an array of sources, including general and specialized search engines, as well as dedicated apps.” Google highlighted changes it plans to make to its search engine to appeal to a younger audience, including the ability for a user to pan their camera over an area and “instantly glean insights about multiple objects in a wider scene.” Insider has previously reported about the threat TikTok poses to YouTube, which is also owned by Google’s parent company, Alphabet. Insider Intelligence predicts TikTok’s advertising revenue will overtake YouTube by 2024. – which makes the TikTok shopping TV service shutdown a bit more puzzling

    Why the Overturning of Roe v. Wade Threatens the Adult Industry — Free Speech Coalition 

    Online

    Meta Is Launching Lawsuits Against Groups That Are Exposing User Data From Facebook and Instagram / Digital Information World 

    Indian farmers streamed fake pro cricket matches to Russian bettors for two weeks – The Verge 

    Security

    US and UK intelligence chiefs call for vigilance on China’s industrial spies | Financial Times – In a joint appearance in London, the chiefs of the US and British intelligence agencies called on companies to be much more vigilant about China. FBI director Christopher Wray said Beijing was using “elaborate shell games” to disguise its spying and was even taking advantage of Spacs, or special purpose acquisition vehicles. “The Chinese government poses an even more serious threat to western businesses than even many sophisticated businesspeople realise,” Wray told business leaders at an event with his MI5 counterpart, Ken McCallum. “I want to encourage you to take the long view as you gauge the threat.” In a reference to the Ministry of State Security and the People’s Liberation Army, Wray added: “When you deal with a Chinese company, know you’re also dealing with the Chinese government — that is the MSS and the PLA — too, almost like silent partners – that this is news to business leaders shows how naive they all are. Based on my experience I believe that the reality is that the business community is already state captured, culpable and willing to endanger their home countries for marginal short term gain. More here: Joint address by MI5 and FBI Heads | MI5 – The Security Service and NEW: Top UK and USA spy chiefs warning on CCP 

    TikTok’s data dilemma – by Casey Newton – Platformer – are we really surprised that TikTok is handing over data to the Chinese security services?

    How Conti ransomware group crippled Costa Rica — then fell apart | Financial Times 

    Taiwan

    China’s Sand Dredgers Run Gray Zone Warfare in Taiwan 

    Web of no web

    Consumer Spending In The Metaverse: Why Might People Spend More? – GWI 

  • Electric cars + more things

    Electric cars

    When you think about electric cars you usually think of Tesla. But the reality is that electric cars have been about for almost 200 years. I was reminded of Bob Cringely’s analogy about technology success being about ‘surfing waves‘. The first electric car turned up sometimes in the 1830s. By the beginning of the 20th century there was 30,000 electric cars. But petrol engined cars were cheaper to make and quicker to refill than charging electric cars.

    That didn’t stop Irish inventors converting a Volvo 66 saloon to run as an electric car, 23 years before Tesla even existed.

    Energy

    The Rise and Precarious Reign of China’s Battery King | WIRED – interesting profile of CATL. Shows opportunity for hydrogen and the ceiling of Li ion batteries.

    Finance

    Abducted Canadian billionaire Xiao Jianhua faces trial in Shanghai court | Financial Times – the question not being asked is how many Chinese government officials will the legal action ensnare? They’ve sat on him for five years as they unwound the Tomorrow Group and are only now prosecuting him in the run up to the 20th National Party Congress in November. It is at this event that Xi Jingping is likely to become president for life. The reality is that Mr Xiao’s goose was cooked as soon as he was snatched from the Four Seasons. This trial could affect demand for high-end Hong Kong property adversely

    Beijing announces interest rate swaps with Hong Kong after Xi Jinping visit | Financial Times – this looks like a bear trap for western investment banks

    FMCG

    Irish whiskey roaring back after decades of decline | Whisky | The Guardian 

    Ideas

    3 Things I Got Wrong About Patriarchy 

    The west looks like a political risk to Asian allies | Financial Times 

    Marketing

    Generation X continues to hit the spot, but why is the industry still missing out? | Campaign magazine – don’t even get me started on generations; but the point about the age, demographics and life stage being ignored is a valid one.

    Media

    Is ad fraud the biggest illegal activity on the planet? – The Media Leader 

    Ofcom reviews changing TV ad breaks – The Media Leader 

    CAA Completes $750 Million Deal for Rival Talent Agency ICM Partners – WSJ 

    Online

    It’s Time to Bring Back the AIM Away Message | WIRED – logging off is now the active decision

    Retailing

    TikTok abandons ecommerce expansion in Europe and US | Financial Times 

    Security

    Vast Cache of Chinese Police Files Offered for Sale in Alleged Hack – WSJ and Hacker claims to have stolen 1 bln records of Chinese citizens from police | Reuters – apparently a poorly set up ‘Elasticsearch’ instance on a cloud service enabled the theft. It is interesting that the data wasn’t encrypted.

    Singapore

    How Singapore Got Its Manufacturing Mojo Back – WSJ – focus on supporting bringing back automated production lines

    Software

    Google AI Blog: Auto-generated Summaries in Google Docs 

    Web of no web

    The invisible science of eyewear beats augmented reality | Financial Times 

  • Soviet steel + more things

    Soviet steel urban legend

    I had heard a variant on the ‘Soviet steel’ story that was responsible for Italian cars being rust buckets when I was growing up. The version I heard was that high proportions of recycled scrap from rusted war wreckage and dismantled ships had been put in Italian steel to make it cheaper. (It was easy to believe this version. Libya had a strong historic connection to Italy and prior to oil being discovered Libya’s top export was scrap metal from abandoned military equipment of the second world war’s North African campaign.) Secondly, Russian cars that made it to the west were unreliable and suffered from rust, which supported beliefs about Soviet steel. The reality would have been that the quality related issues in Alfa Romeo’s factories likely would also occur with unmotivated Soviet workers during the economic stagnation from the late 1960s onwards.

    Soviet goods had a rough and ready feel to them, it would be reasonable to assume that Soviet steel wasn’t great. The alternative explanation in this video seems to be reasonable. This viewpoint has changed in the belief of engineers like my Dad that Chinese steel of a particular grade has a quality discount like the Soviet steel of old.

    China

    The High Costs of Disengagement for China by George Magnus – Project Syndicate 

    The next chapter – by Lillian Li – Chinese Characteristics – interesting move to investment by Lillian who will now be working at Baillie Gifford

    New Zealand Prime Minister Jacinda Ardern warns Nato of China’s rising assertiveness | South China Morning Post – New Zealand has in recent years tried not to antagonise China, its largest trading partner 
    Prime Minister Jacinda Ardern urged for the use of diplomacy and economic links to build ties in the Indo-Pacific region

    Internet hospitals: A great idea that’s not working – SupChina – they’re basically just online pharmacy

    Consumer behaviour

    Older Adults Sacrificing Basic Needs Due to Healthcare Costs | GALLUP 

    Culture

    Celebrating the business of the Grateful Dead this July 4th: Morning Brief 

    Economics

    Disinflation begins – by Noah Smith – Noahpinion 

    Finance

    How Well Are European Sanctions Against Russia Working? – DER SPIEGEL 

    Klarna valuation crashes to $6.5bn from $46bn | Financial Times – unsurprising when I see reports that about 30% of buy now, pay later loans will be struggling to pay them back. It reminds me of storecard debt during the 1991 recession. I was working during college holidays for MBNA a few years later and people were using the balance transfer function to get £20,000 to £30,000 of store card debt on to a card to play off at a lower interest rate. MBNA was then securitising their debt via bonds. There’s probably people who bought a suit at Burtons in the late 1980s that only cleared that debt by the time the millennium came around

    FMCG

    Kraft Heinz pulls products from Tesco in UK pricing row 

    Gadgets

    The invisible science of eyewear beats augmented reality | Financial Times 

    Germany

    The complex route to VW’s planned Porsche IPO | Financial Times – Porsche was bought because it was capital constrained, how will it do when farmed out on its own again?

    Hong Kong

    People are leaving Hong Kong and here’s where they’re going – “Everyone’s going to Singapore,” said Pei, especially those working in finance, law and recruitment, she said. Kay Kutt, CEO of the Hong-Kong based relocation company Silk Relo, agreed, saying people are attracted to the ease of business, family friendliness, tax incentives and open borders of Singapore. In its 40-year existence, the past three years have been the busiest years on record for Silk Relo’s sister moving company, Asian Tigers, she said. “We cannot keep up with the capacity,” she said. “We don’t have enough people to serve what’s going on in the marketplace.”   Families are transferring to Singapore, she said, but small- and medium-sized businesses are also on the move. Whereas one company executive might have left in the past, now “they’re all going,” she said. Small companies are “taking the entire team and putting them into Singapore.” Large companies are also relocating to Singapore, said Cynthia Ang, an executive director at the recruitment firm Kerry Consulting. She cited L’Oreal, Moet Hennessy and VF Corporation — the latter which owns brands such as Timberland and North Face — as examples, while noting there are more who haven’t made their decisions public yet. – the volume going to Singapore is immense based on the amount of people that I am seeing coming to the UK

    Hong Kong resistance will live on – SupChina – a few things here. I thought the parallels between Tibet’s annexation by China and Hong Kong was interesting. I don’t think that resistance will continue on. For the majority of people, its just easier to leave. People are going to Thailand, the UK, Australia, Canada and Singapore. They are connected through family networks to the world.

    Hong Kong 25: Hong Kong’s blurring border with China a sign of things to come – Hong Kong Free Press HKFP 

    Innovation

    Do Academic Citations Measure the Impact of New Ideas? | Matt Clancy this could change the game completely When should U.S. research be stamped ‘top secret’? NSF asks for a new look at the issue | Science | AAAS 

    Japan

    EV supply chain: Japan, China vie for power in lithium standards – Nikkei Asia read this related article with a pinch of salt CATL’s new battery is a leap forward but also a precursor of something radical to come – SupChina 

    Sega’s old arcades are making money again as new owners announce 3.175-billion yen profit | SoraNews24

    Korea

    South Korean workers resort to shop-bought snacks as ‘lunch-flation’ starts to bite | South China Morning Post 

    Media

    Trust in media: Times, Telegraph and BBC see record drops in trust 

    Amazon’s Digital Returns Problem | Revue 

    China bans over 30 live-streaming behaviours, demands qualifications to discuss law, finance, medicine | South China Morning Post – on the plus side this helps avoid Gwyneth Paltrow Goop style deceptive marketing, but it won’t be foolproof

    Security

    Glitch at KDDI disrupting smartphone calls, internet use | The Asahi Shimbun: Breaking News, Japan News and Analysis – best guess? Bad software update

    Will Southeast Asia support Russia’s war with semiconductor exports? — Radio Free Asia – Southeast Asian states, apart from Singapore, have eschewed sanctions and continue to trade with Russia. But as the war drags on, that will have consequences in terms of secondary sanctions and other penalties imposed by the west. Russian supply chains run through Southeast Asia, and the United States and other western governments are have made the targeting of Russian sanctions evasion operations a top priority. One area where Southeast Asian actors may be tempted into sanctions evasion – or where, conversely, they could help pressure Russia economically – is in the export of semiconductors. – there will be a point when they will be on the receiving end of either Chinese aggression or western sanctions. In either case, the west will just standby

    Technology

    Samsung Starts Mass Production of 3-Nanometer Chips – The Chosun Ilbo (English Edition)

    Web of no web

    Metaverse dating app popular with young people in China vies for HK listing | Financial Times 

    Honda invites gamers to Hondaverse in Fortnite on Twitch | Marketing Dive – eerily similar to the Nissan brand space my former colleague Jim Olsen worked on in SecondLife

    New York State Buys Robots for Lonely Elders | Futurism – mirrors the seniors robots that Japan has been experimenting with for years

  • Delivery services

    Why talk about delivery services? On the days that I go into office I am reminded of the late 1990s and 2000 with online services marketing, in particular delivery services. The Super Bowl advertising had a plethora of online businesses, Coinbase’s QRcode ad will likely be the Pets.com sock puppet of 2022. (The reason why online businesses are on TV is that it represents the lowest cost per reach for effective brand awareness of any medium, including digital channels).

    https://youtu.be/0XXPKvbNr8o

    Growth hacking

    We also saw a resurgence in growth hacking, trying to get consumers to go from ‘I’ve never heard of you’ to app download as fast as possible. Which usually means thrusting a leaflet with a QRcode into my hand as I leave the tube station on my way home most week day evenings. A lot of these apps are delivery services.

    Here’s a list of the on-demand delivery services that have been promoted to me so far:

    • Getir – I had a leaflet from Getir one time at the the tube station. It’s purple and yellow brand colours caught my attention because it immediately reminded me of vintage Yahoo! I threw the leaflet in the recycling and paid no more attention until ‘Taxi-gate‘. The company alleged that their agency partner didn’t buy enough taxi advertising for their brand and instead bought advertising for other delivery services. I didn’t realise until I started researching this post that Getir was founded in 2015 by a team in Turkey.
    • Uber Eats – Uber Eats had already established itself as a restaurant delivery service to rival Deliveroo and Just Eats. It has also pivoted into grocery deliveries over the past couple of years in my neighbourhood. I would get emails and mailouts from my credit card company with a discount code for use the first time I grocery shopped on Uber Eats.
    • Deliveroo – Like Uber Eats Deliveroo had already established itself as a restaurant delivery service and expanded into grocery delivery services as well. I had them actively promoted to me via email, as I had used Deliveroo in the past
    • Ocado – This spring Ocado started promoting Ocado Zoom to me promising deliveries of a limited amount of products within two hours of order
    • Gorillas – Gorillas is a Getir analogue that was founded in Germany and launched in 2020. I got a number of leaflets from them, they were the most frequent leaflet that I received on my way out of the tube station. The logo was distinctive, but that’s all I could remember about it.

    Kozmo.com

    Kozmo.com could be considered to be the American dot com ancestor of online delivery services. Kozmo.com was the brainchild of two investment bankers in the US. It was launched in 1998 serving areas of New York. In July 2000, at the height of its business, the company operated in selected areas of Atlanta, Chicago, Houston, San Francisco, Seattle, Portland, Boston, New York, Washington, D.C., San Diego and Los Angeles. It was popular with young professionals and college students, in the areas that it served. But despite the delivery service’s careful choice of markets served, it didn’t survive the dot.com bust going under in April 2001. While the business had filed for an IPO, it never actually went public.

    Economic circumstances

    The UK is likely to be heading into a recession that will be harder and longer than our near peers. There is an inflation and commodity pricing storm that has caused a cost of living crisis currently dominating the political agenda and rising interest rates.

    We know from businesses like Uber and Kozmo.com that delivery services are a low margin business at the best of times. We could be staring into another online business bust. This time it will be driven by a wider economic crisis rather than the precipitating incident, but the effect will be the same. Retail investors including pension fund savers will suffer.

    It feels that we forget history and are doomed to repeat it. Yes smartphones made ordering more convenient than dial-up, but it still didn’t change the essential business model for these delivery services. These businesses relied on cheap money to burn through in the hope of eventually getting profitable. In this respect it reminds me of the dot.com startups that I used to meet at the start of my agency life who talked about not worrying too much about profitability, but about trying to move at ‘internet speed‘. We’ve already seen this kind of thinking at WeWork and other Softbank businesses.

    History is destiny; if we fail to learn the appropriate lessons from it.