Rishi Taparia - Issue #105
This week we look at Costco’s chickens (millions and millions of them), AI learning from babies, Samsung getting out of China, the importance of sleep, a bit of Modern Love and more. Enjoy!
Costco is going to extremes to keep its rotisserie chickens at $4.99
Costco has an amazingly resilient business. Employees love the company, they have run a masterclass in private label and consumers are so tied to the brand that when Amex foolishly made the decision to end their relationship with Costco the credit card company’s stock price dropped by 6%! One reason the company’s been so successful is the focus on price. In a world where a turmeric latte costs $5 (for all my Indian readers - seriously, haldi dood for $5!), you can still get a hot dog longer than most actual dogs for just $1.50. They value their promise to customers so much so that Costco’s now getting into the chicken business.
The chickens have become almost a cult item. 91 million were sold last year, double the number from a decade earlier. They have their own Facebook page with nearly 13,000 followers.
So Costco is willing to go to extreme lengths to keep its chickens at $4.99. For the past few years, it’s been recruiting farmers for this moment: The official opening of a sprawling, $450 million poultry complex of its very own in Nebraska.
Costco loses $30m - $40m (that’s million!) a year on their chickens. And yet, chickens as a loss leader makes complete sense. Come for the chicken, walk out with the hundreds of dollars worth of Bounty and frozen food that you don’t know where to keep in your apartment. After all, what’s a hundred million chickens between friends?
The Ultimate Learning Machines
The future of artificial intelligence depends on designing computers that can think and explore as resourcefully as babies do. The Defense Advanced Research Projects Agency (aka. DARPA), inventors of or contributors to small, non-world changing technologies like the internet, GPS and Windows! - are tackling this future. Their approach - build AI that can learn the same way babies do.
Babies seem to learn much more general and powerful kinds of knowledge than AIs do, from much less and much messier data. In fact, human babies are the best learners in the universe.
One of the secrets of children’s learning is that they construct models or theories of the world. Toddlers may not learn how to play chess, but they develop common-sense ideas about physics and psychology…They are surprised if they see a toy car hover in midair or pass through a wall, even if they’ve never seen the car or the wall before. Babies know something about people, too…1-year-olds see someone accidentally drop a pen on the floor and reach for it, they will pick up the pen and give it to them. But they won’t do this if the person intentionally throws the pen to the floor.
AI has traditionally been “children with super-helicopter-tiger moms—programs that hover over the learner dictating whether it is right or wrong at every step.” If possible, getting the algorithms and models to instead self train on a smaller sample set of imperfect data, much as children do, would be a major breakthrough in AI development. This is a big if. Imitation, curiosity and millennia of genetic development are hard to program. I also don’t particularly love the idea of robots imitating babies if it means more Johny Johny Yes Papa.
Samsung’s departure is new blow to Chinese manufacturing
Samsung is proving China is not the only manufacturing game in town. As of October 1, the world’s largest smartphone maker (23% of the global market) no longer has any manufacturing operations in China.
As recently as two years ago, the Huizhou plant’s 6,000 workers were still making 63m phones, or 17 per cent of Samsung’s global production, according to analysts. But its closure, alongside plants in Tianjin and Shenzhen, is the culmination of a decade-long strategy by Samsung to “diversify the risks of its manufacturing bases”, according an executive at the South Korean company.
Most of Samsung’s manufacturing now takes place in Vietnam, where Samsung first built a facility in 2008. China’s labor cost advantage has eroded over the last 15 years as the country has seen increased prosperity and wage increases - wages in China are double that of Vietnam and several times that of similar workers in India. Given the added political uncertainty and the ongoing trade war between China and the US, expect to see more companies trying to follow Samsung’s lead.
NBA exec: 'It's the dirty little secret that everybody knows about'
Sleep. A critical part of life with so many benefits. Yet, when push comes to shove life’s race largely has us compromise on sleep. After all, it’s hard to put off work, child care, content consumption, socializing and all the other things to do while awake! We can sleep when we’re dead, right? As this article points out, sleep deprivation is the NBA’s silent scourge, a pox on the bodies and minds of players. This article goes a two-year investigation that reveals the dangers of chronic sleep loss in the NBA – and why, even in a business that is reliant on peak physical performance, it has taken until now for one athletic specialist to finally sound the alarm.
25 Modern Love Essays to Read if You Want to Laugh, Cringe and Cry
This month celebrates 15 years of the New York Times’ famous Modern Love column. It started in 2004 and has since turned into a fan favorite, now with its own podcast and, as of this week, Amazon Prime show. Its success, I’m sure, has had other papers sitting back saying “Dammit, I wish we would have thought of that!”
Modern Love isn’t a series I search for on a weekly basis, yet it feels like I should. In a rather turbulent world where news largely follows the mantra of “if it bleeds it leads” or “if it involves a unicorn that has some sheisty dealings all we’re going to talk about is why the entire startup ecosystem is going to go down in flames”, a good love story can offer that respite. As a romantic at heart who always enjoys a good love story (certainly those with happy endings…the sad ones less so), Modern Love offers that warm feeling that reminds me of the Chicken Soup for the Soul series from what feels like forever ago. This paragraph from the Times’ review of the show describes the feeling quite well:
“Modern Love,” when it works, provides the kind of soothing comfort supplied by an inviting armchair, a warm fire, or a mug of hot tea on a chilly night. It’s the TV equivalent of a hand-knit cardigan or an Instagrammable latte; a mood of transitory wistfulness appears to be the goal, not some chest-thumping artistic statement about Life. And there’s certainly room for this kind of artisanal woolly sweater on the TV scene: The real world and the headlines it generates are not much fun these days, and when the actors in the best-written “Modern Love” installments are on their A-games, it’s hard to resist the appeal of these amiable, slightly world-weary stories of connection in the big city.
As the days get shorter and nights get darker, if you’re looking for that specific kind of “soothing comfort”, and are willing to put up with a few cringes here and there, I highly recommend a bit of Modern Love.
I read these things cover to cover...multiple times.
Quote I’m thinking about: “I want people, when they realize they have been wrong about the world, to feel not embarrassment, but that childlike sense of wonder, inspiration, and curiosity that I remember from the circus, and that I still get every time I discover I have been wrong: “Wow, how is that even possible?” - Hans Rosling