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August 06 2017

Electric Vehicle Realities

Brian Piccioni and team at BCA Research offer a good starting point to our questions on Thursday, in a report entitled Electric Vehicles Part 1: Costs of Ownership.

The bad news for EV fans is their work determines that the cost of ownership of an EV still far exceeds that of an internal Combustion Engine Vehicle (ICEV), even after subsidies are accounted for.

With numbers crunched, a comparison between the Chevy Bolt EV and two equivalent ICEVs, the Chevy Sonic and the Open Astra, over 100,000 miles, shows that there’s no denying EVs are still more expensive than ICEVs.

Three points come up in particular.

1) Excluding subsidies, the net expense difference is about $16,000 in the US, $18,500 in Germany and $13,200 in France.

2) After subsidies, the difference is about $6,600 in New York State, $13,900 in Germany and $6,000 in France.

3) Even if electricity were free (which of course it isn’t), after subsidies, the difference in cost of ownership in NY would be $3,400, $3,200 in Germany and $600 in France.

With respect to the Bolt specifically, the analysts note GM believes it’s losing some $9,000 with every Bolt it sells. The automaker would need manufacturing costs to be cut by about $14,750 — 34 per cent — to make the vehicle competitive with GM’s Opel Astra in France.

The numbers above can thus be adapted for a “What If…” scenario, wherein GM actually begins selling the Bolt at average corporate profitability.

In that case the numbers get even more bleak. Excluding subsidies, a Bolt would be $26,900 more expensive in the US than the equivalent ICEV, $29,300 more expensive in Germany and $24,000 more expensive in France.

August 04 2017

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Angelina Jolie Solo

“The other day she made some joke to Knox along the lines of “Pretend to be normal.” “He said, ‘Who wants to be normal? We’re not normal. Let’s never be normal.’ Thank you—yes! We’re not normal. Let’s embrace being not normal!”“

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July 16 2017

Content isn't king

“For Amazon, then, one could say that content is king - that content has strategic leverage. The puzzle is whether any of the other tech platform companies (all of which are experimenting with commissioning original TV) have a similar opportunity. For Google and Facebook, there’s no subscription to cancel - there’s no binary (renew/don’t renew, cancel/don’t cancel) decision you might take that would cut off your access to that great TV show. You don’t close your Facebook account - you just go there less. You might stop paying for the Youtube TV service, but that won’t cut off your access to any other part of Google - nor would anyone want it to - the purpose of these businesses is reach. Nor, really, will you fundamentally change your search behaviour if Google discovers the next Game of Thrones. That is, cancel Prime and you’d lose Amazon, but what do Google & FB have to cancel? Without some platform decision to lock you into, content is marketing, and revenue, but not a lever. “

July 15 2017

MVPM: Minimum Viable Product Manager

“Don’t waste your time making strategic business cases, 3 year plans, and other MBA artifacts. I won’t go as far as to call it bullshit, but it’s not the way to succeed in software. Understand the vision, find a problem worth solving to achieve it, build a hypothesis to solve it, and then validate it as quickly as you can with real customers. Rinse and repeat.”

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Blue Apron has spent approximately $270M on marketing, which has resulted in the acquisition of approximately 2.87M customers ($94 per customer). 

The average customer (including inactive ones) spends $410 in their first six months, another $194 in their second six months (to total $606), and so on.


Blue Apron spends $94 to acquire a paying customer who subsequently generates revenues of $410 in their first six months at a contribution margin of 28%, thus generating $114.8 in net cash flows to the company. In other words, it has recouped the entire marketing spend in six months, and all subsequent revenues generate incremental profit.

More importantly, we see that 2x payback occurs at 18 months, leading to an over 100% return on marketing investment in 18 months. This is important because some business models with high churn rates manage to pay back their marketing spend rather quickly, but effectively lose/churn their customers as soon as they have made their 1x payback. This results in effectively useless marketing spend.


July 14 2017

Define Your Agenda Before It's Too Late

“Any plan of sufficient scope, complexity, or time horizon is bound to have major flaws. And we just have to live with that, with “strong opinions, weakly held”. This concept was coined in the 1980’s by Paul Saffo, a technology forecaster who teaches at Stanford University. As he puts it:

Instead of withholding judgment until an exhaustive search for data is complete, I will force myself to make a tentative forecast based on the information available, and then systematically tear it apart, using the insights gained to guide my search for further indicators and information. Iterate the process a few times, and it is surprising how quickly one can get to a useful forecast.”

Platform Sprawl Leaves No Industry Behind

“Today, so many industries are realizing the importance of moving to platforms that few industries are exempt. For example:

  • Significant competition is heating up in heavy industry (Siemens, GE, Schnieder, ABB, Legrand, Rockwell Collins, Emerson, Dassault). An emerging ecosystem, likely with players such as IBM Watson and Microsoft Azure, is providing the backbone.
  • Infrastructural shifts are becoming more common in banking and fintech, with many companies investing in Ethereum and other open-source, blockchain-based technologies. Established companies such as Deutsche Bank are making major efforts to transform traditional business models, while startups such as Quantopian are crowdsourcing trading algorithms and running funds using the best of breed.
  • The insurance industry is moving toward new value-creation models and leveraging an environment that’s based on wellness instead of monetizing illness. For example, MassMutual has made significant strides in its platform efforts. In addition, insurance companies are increasingly willing to cross-sell competitors’ products to build and maintain customer relationships.
  • Digitization of global trade is creating huge opportunities across global supply chains. These include supplier ecosystems, container shipping, logistics, trading, and ports. Most transportation players also are moving to platform models.
  • Health care is seeing a fragmented ecosystem landscape emerge as well, with equally fragmented regulation regarding patient-data ownership. The Affordable Care Act had the paradoxical effect of moving the deployment of electronic medical records forward while possibly locking in older technologies. Now this industry will feel increasing pressure to move away from traditional enterprise implementations toward more open platform solutions.
  • Fast-moving consumer-goods companies, such as Unilever, Procter & Gamble, and GlaxoSmithKline, are looking downstream to establish direct links with consumers through an ecosystem. For example, food producer McCormick has worked to establish a digital layer around its spice product line.“

Putting Yourself in the Customer’s Shoes Doesn’t Work: An Interview with Johannes Hattula

“In a battery of experiments, Imperial College’s Johannes Hattula and his coresearchers Walter Herzog, Darren Dahl, and Sven Reinecke interviewed marketing managers about their personal preferences for a selected product or service. The researchers then primed some managers to be empathetic by having them describe a typical customer of the offering and imagine that person’s thoughts and reactions. All managers were asked to predict customers’ desires and took a survey assessing empathy levels. The more empathetic managers were, the more “egocentric” they became; that is, the more likely they were to say that the customers’ preferences were the same as their own.“

July 13 2017

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Planning like it’s 1974. JWT Planning Guide 

July 12 2017

How to compose a successful critical commentary

via Daniel Dennett - Intuition Pumps

  1. Attempt to re-express your target’s position so clearly, vividly and fairly that your target says: “Thanks, I wish I’d thought of putting it that way.”
  2. List any points of agreement (especially if they are not matters of general or widespread agreement).
  3. Mention anything you have learned from your target.
  4. Only then are you permitted to say so much as a word of rebuttal or criticism.

One immediate effect of following these rules is that your targets will be a receptive audience for your criticism: you have already shown that you understand their positions as well as they do, and have demonstrated good judgment (you agree with them on some important matters and have even been persuaded by something they said). 

July 09 2017

Dear PMs, It's Time to Rethink Agile at Enterprise Startups

“The other way B2B product management can go off the rails is forgetting, in most cases, that the user is not the buyer. In the B2B world, though, users may not have much of a voice when it comes to a buying decision. A department VP may be the buyer, but it’s the team working for her who’ll actually be using the product. 

When you’re selling to a business, you need to understand every factor that goes into its purchasing decisions — and it’s quite possible that how delightful a product is to use won’t be anywhere near the top of that list. Therefore, you need to listen — not to the voice of the user but — as Kavazovic calls it, the voice of the market.

Heeding the voice of the market requires looking at all the broader forces — what your competition is pitching, upcoming regulations, as well as the ambitions and needs of your biggest and most important customers (current and prospective).

“All of these things need to be fully considered in order to make the right product strategy decisions,” says Kavazovic. “And that’s quite a bit of work.” While there are plenty of industry-standard B2C best practices for how to do user research, he’s found a void when it comes to baking various market forces into your roadmap. 

As a result, product teams either stick to what they know — well-run focus groups and user research — but stumble through an ad hoc approach incorporating all the market dynamics that will likely influence a buyer’s decision. Often, the result is a rude awakening when the sales team gets into the field. 

“We thought we were doing great at Opower — the current customers were happy and we were confident we had the best product in the market from a user experience perspective,” says Kavazovic. “Then out of nowhere we lost the next three deals — a new competitor backed by a well-known Silicon Valley billionaire interested in cleantech entered the game. 

We soon found out they were winning because they pitched a grander platform vision about where the market was going and where the product may need to be years from now, complete with very convincing mocks and demos. We started seeing customers partnering with a company whose product didn’t even exist.“

July 07 2017

The Sure Thing That Flopped

A large pharmaceutical company recently did such digging to understand how consumers felt about two of its pain relievers—one based on acetaminophen, the other on ibuprofen. Traditional research had showed that the two analgesics were poorly differentiated—that consumers saw them as interchangeable. Accordingly, strategists were baffled about how to make each product stand out on its own.

In one-on-one research that probed into the deep metaphors used by consumers, heavy users of the two medications were asked to select images that represented their thoughts and feelings about the products. Many chose pictures of mothers. It turned out that people’s choices about pain relievers were strongly influenced by what their mothers had given them. By probing more deeply, the company discovered that acetaminophen moms were different from ibuprofen moms. Some of the consumers recalled from childhood that when they awoke with runny noses, headaches, and sore throats, their mothers brought them soothing drinks, told them to stay home, and gave them acetaminophen. Others recalled being told to get up, get dressed, and go to school, despite their illnesses. Those kids tended to get ibuprofen.

The company now had the beginnings of a coherent picture: Customers seemed predisposed to believe that acetaminophen is for when you’re staying home and taking care of yourself, and ibuprofen is for when you want to go to work or school despite being sick. Hence, consumers’ feelings about the products were potential sources of differentiation. The company used that insight to reinforce this distinction in its marketing, creating very different positioning for the products.

The Sure Thing That Flopped

“At OXO, we’ve found that user research doesn’t need to be rocket science. What’s important is that managers be inquisitive, that they be avid users of the type of products we sell, and that every employee be looking out, constantly, for problems and solutions in both the company’s and competitors’ products. When OXO employees attend social gatherings outside the office, they often bring up the topic of product pet peeves. We have done simple surveys in the lobby of our building by offering free OXO products in exchange for people’s opinions. If Procter & Gamble’s researchers saw us doing that, they’d say we were crazy for interviewing unscreened New Yorkers in an unscientific sampling. 

But we uncover great insights—in fact, we find that our small samples often echo the voice of the market.The most valuable learning happens when we come across latent needs—problems that users aren’t able to articulate. For example, when evaluating a concept for a new measuring cup, we noticed that users were repeatedly bending down to read the measurements on the side, adding or subtracting liquid, then bending down again to check the measurement. They never identified this as an inconvenience—they accepted it as a part of the measuring process. The OXO Angled Measuring Cups’ interior ramps solve the problem, making measurements visible from above.“ 

The economic benefits arise not from innovation itself, but from the entrepreneurs who eventually discover ways to put innovations to practical use.
— The Box, Marc Levinson 
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