Materials are as important as technology and innovation. Without access to hydrocarbons you wouldn’t just lose access to the car as transport, but the foundational products of modern life.
Added to the materials list of importance would be the likes of:
Lithium – current battery technology and in some alloys
Helium – inert atmosphere for chemical reactions and lighter than air craft including blimps, airships and weather balloons
Silicon – semiconductors
Cobalt – a key material in batteries
Titanium – similar applications to steel but with a higher weight to strength ratio. Also hypoallergenic in nature
Carbon fibre – high strength light weight materials
Rare earth metals and key materials including:
Dysprosium- magnets, lasers, nuclear control rods
Erbium – lasers, particularly in telecoms fibre optics cables and optronics
Europium – interest in using it to develop memory for quantum computers
Holmium – magnets, lasers and quantum computer memory
Neodymium – high strength magnets
Praseodymium – magnets
Yttrium – catalyst in some chemical processes
Thorium – future safer nuclear fuel source
Thulium – portable x-ray devices, ceramics used in microwave equipment
Scandium – high strength lightweight alloys
Ytterbium – manufacture of stainless steel, atomic clocks
Uranium – nuclear fuel
In addition to innovation in material science and chemistry with these raw materials. There is also the benefit of recycling and reusing existing stuff once it has finished its useful life. The Tokyo olympics of 2020 saw an unprecedented peace time effort to find precious metals in e-waste and junk that could then be processed into the winners medals.
A desire to lower the carbon footprint will require ingenuity in systems, design and materials use for it to be successful
Apple announced that features showcased during the 2024 WWDC enhancing Siri would be delayed. Apple Intelligence delayed represents a serious breach of trust for Apple’s early adopters and the developer community. On its own whilst that’s rare from Apple, it’s survivable.
Apple has made other FUBARs: the Newton, some of the Performa model Macintosh computers in the 1990s, the Apple Pippin, Apple QuickTake cameras and the Apple Cube computer from 2000.
The most recent game-changing product has been the AirPod series of headphones which have become ubiquitous on the tube and client video calls. But there has been a definite vibe shift around perceptions at Apple.
Recent product upgrades to the MacBook Air were given a muted welcome. Personally I think Apple came out with a banger of a product: the M4 processor in the MacBook Air M1 form-factor at the Intel MacBook Air price of $999.
The Vision Pro goggles are at best a spoiler on the high-end market for Meta’s VR efforts, and an interesting experiment once lens technology catches up with their concept. At worst they are a vanity project for Tim Cook that have a very limited audience.
Conceptually Apple Intelligence told a deceptively good story. Let others develop the underlying LLMs that would power Apple Intelligence. This solution is partially forced on Apple due to the mutually exclusive needs between China and its other markets. But it also meant that Apple had a smaller AI challenge than other vendors. On-device intelligence that would work out the best way to solve a problem and handle easier problems without the latency of consulting a cloud service. More complex problems would then be doled out to off-device services with privacy being a key consideration. The reality is that Apple Intelligence delayed until 2027 because of technical challenges.
One of my most loved films is Chungking Express directed by Wong Ka wai. It was one of the reasons that I decided to take up the opportunity to live and work in Hong Kong. This YouTube documentary cuts together some of the oral history about the making of the film. The story of the production is nuts.
Drone deliveries
Interesting documentary by Marques Brownlee on the limited use cases and massive leaps in innovation going into drone delivery systems.
Effective Marketing for Financial Services
Les Binet presents a financial services-specific view on marketing effectiveness. It has some interesting nuances, in particular how brand building is MORE important in subscription services.
Tony Touch set
Tony Touch did a set for Aimé Leon Dore. It’s an impeccably programmed set.
LUCID Air focus on efficiency
It’s rare to hear the spokesperson for an American car company quoting Colin Chapman’s design philosophy – which he shared with Norman Foster.
Clutch Cargo was an animated series first broadcast on American television in 1959. Clutch Cargo was created by Cambria Productions – who were a start-up animation studio. Cambria used a number of techniques to radically reduce the cost of producing the animated series.
A key consideration was reducing the amount of movement that needed to be animated. There were some obvious visual motifs used to do this:
Characters were animated from waist height up for the majority of the films, this reduced the need to animate legs, walking or running.
Much of the movement was moving the camera around, towards or away from a static picture.
To show an explosion, they shook the camera, rather than animate the concussive effect of the blast.
Fire wasn’t animated, instead smoke would be put in front of the camera. Fake snow was sprinkled so that bad weather didn’t need to be drawn.
Cameraman Ted Gillette came up with the idea of Syncro-Vox. The voice actors head would be held steady, they would have a vivid lipstick applied and then say their lines. Gillette then put their mouths on top of the animated figures. Cambria made use of it in all their animations with the exception of The New Three Stooges – an animated series that allowed Moe Howard, Larry Fine and Joe DeRita to be voice actors after their movie contracts finished and they were affected by ill health.
These choices meant that Clutch Cargo cost about 10 per cent of what it would have cost Disney to animate. The visual hacks to cut costs were also helped in the way the scripts were developed. Clutch Cargo avoided doing comedy, instead focusing on Tin-Tin-like adventures. ‘Physical’ comedy gags create a lot of movement to animate. By focusing on the storytelling of Clutch Cargo. The young audience weren’t bothered by the limited animation, as they were captivated into suspending their beliefs.
Ozempic Could Crush the Junk Food Industry. But It Is Fighting Back. – The New York Times – Lars Fruergaard Jorgensen, the chief executive of Novo Nordisk, which makes Ozempic and Wegovy, told Bloomberg that food-industry executives had been calling him. “They are scared about it,” he said. Around the same time, Walmart’s chief executive in the United States, John Furner, said that customers on GLP-1s were putting less food into their carts. Sales are down in sweet baked goods and snacks, and the industry is weathering a downturn. By one market-research firm’s estimate, food-and-drink innovation in 2024 reached an all-time nadir, with fewer new products coming to market than ever before.
Ozempic users like Taylor aren’t just eating less. They’re eating differently. GLP-1 drugs seem not only to shrink appetite but to rewrite people’s desires. They attack what Amy Bentley, a food historian and professor at New York University, calls the industrial palate: the set of preferences created by our acclimatization, often starting with baby food, to the tastes and textures of artificial flavors and preservatives. Patients on GLP-1 drugs have reported losing interest in ultraprocessed foods, products that are made with ingredients you wouldn’t find in an ordinary kitchen: colorings, bleaching agents, artificial sweeteners and modified starches. Some users realize that many packaged snacks they once loved now taste repugnant.
Apple resumes advertising on Elon Musk’s X after 15-month pause – 9to5Mac – the negative reaction to this that I have seen from Mac and iPhone users that I know is interesting. It’s the scales have dropped from their eyes about Apple’s performative progressive values. Yet the signs have been out there for years – in particular with regards anything that is even tangentially connected to China.
Zuckerberg’s rightward policy shift hits Meta staffers, targets Apple | CNBC – employees who might otherwise leave because of their disillusionment with policy changes are concerned about quitting now because of how they will be perceived by future employers given that Meta has said publicly that it’s weeding out “low performers.” Meta, like many of its tech peers, began downsizing in 2022 and has continued to trim around the edges. The company cut 21,000 jobs, or nearly a quarter of its workforce, in 2022 and 2023. Among those who lost their jobs were members of the civic integrity group, which was known to be outspoken in its criticism of Zuckerberg’s leadership. Some big changes are now taking place that appear to directly follow the lead of Trump at the expense of company employees and users of the platforms, the people familiar with the matter said.
I decided to pull together some of the better resources I could find on DeepSeek. It distracted and disrupted my writing calendar as I was researching a post what will be called Intelligence per Watt, once i have it published.
John Yun’s take on DeepSeek is well researched and thoughtful rather than a hot take trying to explain why the sky fell in on Nvidia’s share price.
ChinaTalk have put together a large amount of expert opinions on DeepSeek.
Study: 67% Of Gen Zs Want To Take Charge Of Their Health But Face Gaps In Communication| Provoke Media – Despite being known as the digitally native generation, Gen Z is skeptical of online health information and even telehealth appointments. In fact, eight in 10 Gen Zs say they’ve encountered false or misleading health information online and more than 60% say prioritizing in-person visits over virtual ones is important to feeling respected by healthcare providers.
Louis Vuitton APAC strategy: Inside the luxury brand’s Asian success | Jing Daily – “Given the economic downturn and competitive luxury market in China, Louis Vuitton has been seen adjusting its strategy to appeal to more diverse audiences, i.e. launching more affordable bag styles, participating in pricing games (points collecting, coupons refund), and launching cross-over marketing activities,” says Yu.
This year alone, the house has hosted its exclusive four-hands dinner at its Michelin-starred restaurant, The Hall, alongside Chengdu’s Latin American Michelin one-star restaurant, Mono; launched ultra-limited-edition diamond bracelets and a serpent-inspired timepiece for the Year of the Snake; rolled out its highly anticipated Murakami collaboration; and unveiled a new men’s store at Shanghai’s IFC Mall.
“[Louis Vuitton’s] strategy is rooted in consistency,” says Xuan Wang, activation director and partner at Tong Global and luxury PR veteran. “It has embraced a more localized approach — granting its Chinese team greater creative autonomy — while not losing the essence of the brand.”
HSBC’s Zing shuts down. It didn’t manage to compete effectively against Revolut and Wise. Zing provided cheap foreign exchange. On the face of it HSBC had a number of use cases in its main retail banking markets that would have made sense.
Hong Kong:
7+ percent of the population are expats. This has been pretty constant over previous decades, though people are constantly coming and departing. A big group of these communities are domestic workers from the Philippines, Indonesia, Myanmar and Sri Lanka. All of whom would benefit from cheap foreign money transfers.
Like other developed Asian countries, many young Hong Kongers study abroad. Having a way to cheaply transfer money to and from Hong Kong would be useful for this second group.
Finally Hong Kong has a diaspora, with families being spread across the United Kingdom, Australia and Canada.
UK:
30+ percent of Londoners were born outside the UK. Overall, the UK had ethnic minorities which make up 8 – 10 percent of the population. Many of them have multi-generational links with their homelands.
The NHS in particular has a large proportion of skilled foreigners working for them from Filipino intensive care nurses to Greek X-ray technicians.
Zing decided to launch only in the UK. Despite HSBC’s footprint, it didn’t grab the visibility or market share achieved by Revolut or Wise. It also failed to make money and HSBC seems to have taken a shorter term view to succeed or quit compared to its startup competitors. One could charitably view Zing as a correct view of the ‘fast failure’ model, if learnings from it are taken from it by HSBC and applied effectively.
Zing is emblematic of Clayton Christensen’s Innovator’s Dilemma where established companies lose market share as they fail to disrupt themselves to compete against new upstart businesses.
Financial innovation is hard. Barclays closed down their mobile payment system Pingit, NatWest stepped back from its digital bank offering and Vodafone has struggled to expand M-Pesa.
US TikTok ‘refugees’ make surprise move to China’s ‘RedNote’ | FT – Xiaohongshu’s technical team were not ready for the complexity of a western audience. What’s interesting is that the move was a political statement to US politicians and a tacit rejection of Meta’s competitor platforms very soon after their ‘pivot to free speech’.
Vintage | Hi-Fi News – modern reviews on classic hi-fi models that give you a realistic understanding about how they compare to the current state-of-the-art. A number of the pieces come off much more favourably than I was expecting.
Obsolete Sony are doing a great job at documenting Sony’s history:
Kameron Hurley: There Have Always Been Times Like These – Locus Online – Hard times are coming, when we’ll be wanting the voices of writers who can see alternatives to how we live now, can see through our fear-stricken society and its obsessive technologies to other ways of being, and even imagine real grounds for hope. We’ll need writers who can remember freedom. –Ursula K. Le Guin
Luxury
ISSUE #1 — ARTSUMERISM – Power Dynamics by COPE – massification of luxury goods might have taken the artisan out of luxe. But has enabled it to develop an art collaboration somewhere between patron and influencer relationship.
Shoemaking experts Rose Anvil interview Fitasy on the advantages and challenges of using additive manufacturing for shoes. Fitasy provide a more realistic perspective on the circular economy benefits of filament printing at the end of the interview.
Will Video Kill the Audio Star in 2025? | Vulture – I find it a bit odd as an idea, but then I do listen to a lot of talking heads YouTube channels without looking at the participants such as TLDR, Chip Stock Investor et al and much of the CNBC content I listen to is an audio track from their TV feed.
UK’s elite hardware talent is being wasted. | Josef – this reminds me a lot of working in the chemical and petrochemical industry at the start of my career. When enough people opt out the capability collapses in on itself.
John Donahue is the outgoing CEO at Nike. Full disclosure, I have Nike in my wardrobe and I own a share in the company at the time of writing. Anyway back to Donahue, according to his biography on the Nike website:
John Donahoe is President & CEO of NIKE, Inc. He is responsible for the continued growth of NIKE’s global business portfolio, which includes the Nike, Jordan and Converse brands. John became president and CEO of NIKE in January 2020 and has served on the Board of Directors since 2014. Previously, he was the president and CEO of ServiceNow and of eBay Inc., and he continues to serve as chairman of the board at PayPal. Earlier in his career, he worked for Bain & Company for nearly two decades, becoming the firm’s president and CEO in 1999. A former basketball player and lifelong sports fan, John received an MBA from Stanford Graduate School of Business and a bachelor’s degree in economics from Dartmouth College.
John Donahue via the Nike website.
He is a business strategy wonk and has extensive experience in online businesses and online commerce. When Apple had the vision thing, they hired Tim Cook – a famed operations and logistics executive in the technology industry to deliver. John Donahue had been hired to do great operational execution, by a company that was running low on the vision thing.
Donahue may not have had permission to deal with some of the systemic issues in Nike and some of them issues might be due to the board itself.
Penetration
Nike’s collective strategy to move to D2C via its own retail stores and e-tailing platform was ostensively a way to increase profitability and presumably focus on heavier, brand loyal users. I can understand why they might have felt that due to the ubiquity of their products on the backs and feet of customers around the world.
Secondly, prior to 2010 (and in most business schools still) the perceived wisdom was that modern marketing is supposedly about focusing on loyal, heavier buyers; focusing on retention (not acquisition) and return on investment.
However, things changed in 2010; Ehrensberg Bass researchers Byron Sharp and Jenni Romaniuk summarise the marketing science research that their institution had been doing in their books How Brands Growpart one and part two. A key part of their findings was that brand loyalty is positively correlated with brand penetration – if you have higher levels of penetration then your customers will tend to be more loyal. However, if you have lower levels of penetration then your customers will tend to be less loyal. Smaller brands suffer from a double jeopardy of sorts: their sales are lower because they have fewer buyers, who buy the brand less often.
Which kind of makes sense. When you go to a supermarket, you can only buy what’s on the shelf when you’re in the supermarket. It would take a lot to go and try another supermarket to just buy one product. Most people will just buy what they can on their list and maybe look at substitute products.
Nike is a huge brand, but it wilfully reduced its marketing penetration, by reducing the amount of places it appeared. It withdrew or reduced engagement with a range of partners:
Amazon
DSW
Footlocker
JD Sports
Macys
Olympia Sports
Urban Outfitters
Zappos
When Nike goes back to those partners, there will be a shift in the power dynamic away from Nike. These retailers have options because Nike let other brands in to fill the void it chose to leave behind.
On LinkedIn, people have talked about this as Nike has a brand problem. This is far beyond a brand problem; but brand has suffered.
Where’s the community?
Nike’s Londoner celebrated community back in 2018. Nike has continued to win in culture with collaborations including Nigo and Yoon Ahn of Ambush. But the culture didn’t translate into the degree of sales that Nike wanted so far.
Part of the reason for this is Nike’s focus on sub-cultures rather than broader transformational trends in middle class and working class consumers.
On Running have built their brand around running groups. Nike used to have running clubs ran by staff at their retail outlets. They were also were supporting Charlie Dark’s Run Dem Crew in the early 2010s.
When did Nike give competitors space in communities? Was it down to a pivot win focus from retail to online? Given that part of the rationale for Nike’s move to selling direct to customers was to be closer to them, this all seems really odd.
In the late 1990s and early 2000s Nike sold watches. The most famous of which was the Triax range that angled the display to make it glanceable for runners. There were also Nike MP3 players made with Philips. There was also the Nike fuelband, an in-house attempt at a wearable.
The company decided to focus on what it did well and has since made products that are complementary to Apple’s product line like watch straps and apps. Under Donahue’s watch Nike extended itself into the technology space with NFT offerings and metaverse experiences. Both of which seem to have been expensive follies.
Fading stars
Nike was formed at a unique point in time and over the decades has worked with a range of game-changing athletes who were known globally thanks to mass media and the internet.
Nike’s biggest brand and star is still Michael Jordan. The Air Jordan 1 was launched in 1984. That means that the shoe design and when he played in it is older than the young people it is sold to. The linkage between the iconic jumpman performance and his signature shoe is becoming elongated by time.
Granted Adidas sells the Superstar, the Stan Smith, the Samba and Gazelle shoes which are older than the Jordan 1. But Adidas doesn’t lean as heavily on any one design. Instead they rotate in and out of style. Even then Adidas has suffered from problems executing consistently such as the Yeezy scandal.
Nike’s Dunk design comes from 1985, the Air Force 1 came out in 1982. They are not bad shoes, but they will fade in and out of style.
Nike had also been relatively slow to take advantage of the surge of interest in women’s basketball with Caitlin Clark only getting a signature shoe deal this year.
Nike also managed to grossly underestimate the demand for replica jerseys of its England and Australia women’s football teams.
Jordan has since expanded into a brand that Nike has used to sponsor the likes of French football team Paris St Germain.
In golf, Nike parted ways with Tiger Woods this year. Woods is launching his own line instead. While Nike has other golfers on its roster, they don’t have the cultural impact that Woods had on the game.
The brand has better news in football where it has a deep bench of both teams and player sponsorships to draw on. Nike still has a great bench of athletes comparable to rivals like Adidas, and that’s the problem. They glitter like the Milky Way rather than radiate like the sun.
The secondary market
Hypebeasts
The rise of streetwear as an industry took off in the late 1980s. Its origins go further back. You had Dapper Dan in Harlem in the 1980s, football casual culture, Japanese fashions and the California surf culture influence. Soon after it took off you had unobtainable items:
Major Force t-shirts – (Major Force was a Japanese hip hop and house label featuring artists like Hiroshi Fujiwara)
The Tommy Boy Carhartt Detroit jacket
Numerous Stüssy Tribe letterman jackets
Supreme drops from 1994 onwards
Trying to scratch that itch made you a hype beast. I know hypebeasts who are 60 years old and have college age children. The signs of this secondary market being bubbly could be seen back before COVID.
The end of easy money
Nike like other premium brands benefited during COVID-19, when interest rates were low and consumers had money in their pockets. Interest rate rises, inflation and an economic dip took away the easy money. Nike doesn’t seem to have factored this into its expectations. The decline in Chinese economic growth, seems to have hit Nike particularly hard.
The polyurethane problem
Nike shoes took off on them being tradable alternative assets like sports cards, or vintage bottles of wine. Nike trainers have a shelf life due to the materials that they are made from. Adhesive bonds can be reapplied, stitching can be repaired, but polyurethane midsoles crumble over time and can’t be replaced.
The plastic breaks down and and the soles disintegrate. I have had pairs go at the four year mark. Chemistry undermines the collector segment that supports much of the secondary market for Nike products.
A long train running
John Donahue was in charge when Nike had unprecedented decline in sales. But there have been issues for a long time. Donahue was executing on a strategy for direct-to-consumer sales via its own retail stores and online, that Nike had committed to prior to his arrival as CEO.
This is obvious from John Donahue’s recruitment process.
Donahue’s reputation was helped by his roles at ServiceNow and eBay
Donahue was a former partner at Bain and a friend to many in Silicon Valley
He received his MBA from Stanford School of Business – which is a great institution and happens to be the one that Phil Knight went to.
What Nike didn’t do was commission a headhunter, hold a beauty parade or anything akin to a rigorous recruitment process in hiring their CEO.
All of which points a board-wide issue rather than just a CEO issue. Which begs the question, will Nike become the sports apparel version of Yahoo!? A rotation of CEOs, intractable board level issues and an inevitable slide out of the limelight? Nike has been wrong-footed before, it was clobbered by the rise of Timberland in the early 1990s driven by the brown boots usefulness for standing on cold wet street corners in the criminal underworld adjacent to hip hop culture. But Nike came back. That was a different Nike with a more energetic Phil Knight and Tinker Hatfield.
The scale of this stumble seems bigger and faster than before. Nike might not be resilient enough to withstand it.
The innovation problem
Former Nike designer Steve McDonald has painted a very different picture on Nike innovation internally within the company than has been seen on the outside. Outdoor sub-brand ACG was ‘never supported‘ when it was launched back in 1989. It was an immensely political environment with star-designer Tinker Hatfield warring with rival designers. Instead Nike used golden birdcage contracts to lock up and stifle talent. Hatfield is in charge of Nike’s Innovation Kitchen, but there seems to be a lack of commercially beneficial output.
Hatfield’s days as a star designer are numbered following several decades at the top and there doesn’t seem to be a star-status worthy successor coming though.
Nike seemed to abandon mainstream sustainable innovation some time after 2012, with its ISPA range as a sporadic tokenism to green issues.
NikeLab – a premium line that fits in with On Running’s apparel seems to receive only sporadic support. All of which implies that product innovation had problems way before Hoka and On Running turned up.
Nike’s Vaporfly running shoes were originally released back in 2018 and by 2020, World Athletics rule changes meant that Nike has a range of competitors providing similar shoes.
The next battle ground has been fought over consumers focusing on wellness and fitness. When Hoka and On Running did turn up, Nike didn’t have much in the tank to respond.
It was really brought home to me in sportswear-loving Merseyside where On Running shoes are the universal choice of everyone from office workers to scallies. Before COVID they’d all be in Nikes with the Air Max 95s being particularly popular.
