Rishi Taparia - Issue #78
This week we explore Amazon’s entry into the autonomous rover delivery, the Church of England going contactless, algorithms literally able to see around corners, Lego as an asset class and more. Enjoy!
Commerce
Meet Scout
Amazon have entered the autonomous rover delivery business. They introduced Scout, “the size of a small cooler, and roll along sidewalks at a walking pace.” Starting this week 6 Scouts will begin delivering packages to customers in a neighborhood in Snohomish County, Washington (close to Amazon). This is a new trend that has taken hold with companies including Pepsi, Postmates and Starship Technologies all in the battle to replace human delivery people with robots - understandable in markets where the cost of labor is high like the US and Europe - but I still wonder what the ROI math looks like here. While the robot delivery technology is certainly novel and cool, for this to see application at scale will take years and tens if not hundreds of millions of dollars. Worth it? I’m not so sure.
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You get a delivery rover and you get a delivery rover...
Mickey Drexler Has Retired From His Chairman Role at J.Crew
J Crew is without a CEO, and now it seems, without a Chairman (who, I might add, was the reason the CEO resigned). Mickey Drexler is a pioneer in retail with his tenure at Gap launching Old Navy and Gap Kids, having previously worked as CEO and President of Ann Taylor. Drexler is said to be focusing on Drexler Ventures (he’s an investor and sits on the boards of both Warby Parker and Outdoor Voices…not too shabby) but there’s certainly more to emerge here. In the meantime, there are a few slots to fill over at JCrew if you know anyone interested.
U.S. set to lose its position as world’s biggest retail market
The US is set to lose the crown as largest retail market in the world according to a new forecast by eMarketer. To whom you may ask? China. Duh.
The latest forecast by eMarketer predicts that retail sales in China will increase 7.5% to $5.636 trillion in 2019. That’s approximately $100 billion more than the United States, where retail sales are expected to grow 3.3% to $5.529 trillion.
This shouldn’t come as a surprise to anyone who has been paying attention. With the Chinese tourist becoming the most important consumer in the world, increase spending power and ~1.4 billion people, it was going to happen. I think the shock is that it’s happened so fast.
FinTech
Church of England: Contactless collection payments trialled
Smart moves by the Church of England who can now accept contactless payments for collections - the digital plate if you will. In partnership with SumUp, now churchgoers will be passing around a digital card reader with present amounts listed and can pay using tap and go cards or mobile phones. Early data has shown churches reporting a 97% increase in donations made at services trialling a digital collection box. “An amazing example of tradition meeting technology” according to SumUp’s co-founder (and friend of mine) Marc-Alexander Christ. I’d have to agree. This plays a close second for me in payments ingenuity, behind beggars in China having their own QR codes to accept donations.
Target stores to accept mobile payment including Apple Pay, Samsung Pay and Google Pay
rolling, no matter how hard anyone tries. Target, themselves having done quite well of late with 2018 numbers showing their biggest sales gain in 13 years, was a long time Apple Pay holdout. They refused to accept the NFC based payments in store, trying to compete with their own Target Red payment method and app. Now, it seems the Cupertino giant has worn down Target (as well as a number of other retailers including Taco Bell, Speedway, Hy-Vee and Jack in the Box), making Apple Pay available at 74% of US retailers. Next on the list for Apple - Walmart. I wouldn’t hold my breath.
Mobile money transactions equivalent of half of Kenya’s GDP
In the mind blowing statistic of the week category, we have a clear winner: Central Bank of Kenya data shows that mobile money transactions stood at Sh3.98 trillion ($38.5 billion), having increased by Sh346 billion (10%) from 2017. What does this mean you ask? Kenyans moved nearly half the equivalent of the country’s gross domestic product (GDP) through their mobile phones last year. underlining the growing importance of digital wallets to the economy. An astronomical number by any measure, the penetration of mobile wallets in Kenya (and throughout sub-Saharan Africa) is the largest globally (including China) and with room to grow as more Kenyans look to ecommerce and more P2P transactions.
Technology
Program allows ordinary digital camera to see round corners
It turns out that the answer to Plato’s Allegory of the Cave is algorithms. Using algorithms, a researcher and his team were able to reconstruct images based on just their shadows.
Vivek Goyal, an electrical engineer at the university, said that while the work had clear implications for surveillance he hoped it would lead to robots that could navigate better and boost the safety of driverless cars. He said: “I’m not especially excited by surveillance, I don’t want to be doing creepy things, but being able to see that there’s a child on the other side of a parked car, or see a little bit around the corner of an intersection could have a significant impact on safety.”
The amazing thing about this is the hardware that was used to do this is a standard laptop and a standard digital camera. The technology currently takes 48 seconds to register the hidden image but like the 4 minute mile, now that it has proven possible it’s not hard to see this reaching near instant processing.
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Indians Are So Crazy About Mobile Video, They Use YouTube Like Google
In a country that loves their video content, it’s not surprising that an explosion in demand for mobile video in India is transforming the country’s media landscape. Indians now download an average of 8.5gb a month (the equivalent of 40 hours of video!), the highest in the world. With data rates having dropped below $2/mo, Indians use of video is unlike any other in the world.
It isn’t just what Indians watch but also how they consume content that is driving companies to innovate. They like to download as much as possible when they have a connection. They monitor their allotted gigabytes a day, week or month carefully. And when they reach the final hour of the day or day of the month, they binge some more to make sure they use up every byte they bought, telecom companies say.
Amazon Knows What You Buy. And It’s Building a Big Ad Business From It.
The online retail giant is taking advantage of what it knows better than anyone: consumers’ online shopping habits. Amazon can now be considered the third pillar of online advertising thanks to its deep understanding of their consumers - not only what they buy but also where they live, what payment types they us and what they’re searching for.
Random Tidbits
Lego Collectors Get Huge, Uncorrelated Market Returns
Legos as…an investment vehicle? Apparently collecting Legos returned more than large stocks, bongs and gold over the last 30 years.
Lego sets that focus on Super Heroes, Batman and Indiana Jones are among the ones that do best over time. The Simpsons is the only Lego theme that has lost value, falling by 3.5 percent on average. Newer sets have higher returns than older ones, though this can be due to a growing popularity of investments in Lego, Dobrynskaya said.
My son is too young to play with Legos, but maybe it will be better for him in the long term if I don’t let him.
Customer Loyalty Is Overrated
Speaking of Lego, this interview with Jørgen Vig Knudstorp, cochairman of the LEGO Brand Group, talking about building habit. According to Knudstorp, simplicity early on is important, particularly when working with children. Making things easy to understand and use allows for adding complexity later on. Much like game design, by teaching the basics and then making the platform ‘extendable’ “has a terrific network effect. If a child already has a LEGO set, getting another LEGO product is more valuable than just the incremental purchase—it extends his or her platform for play in an exponential way.”
How To Be Successful
Sam Altman, president of YC, and his observations on how to be successful.
Compound yourself
Have almost too much self-belief
Learn to think independently
Get good at “sales”
Make it easy to take risks
Focus
Work hard
Be bold
Be willful
Be hard to compete with
Build a network
You get rich by owning things
Be internally driven
Quote I’m thinking about: Confidence comes not from always being right but from not fearing to be wrong. - Peter T. Mcintyre