A Blog by Jonathan Low

 

Apr 24, 2017

Tesla's Model 3 Success Rides on Risky Assembly Line Strategy

Tesla has embraced risk since its inception. The very idea of one tech entrepreneur taking on the global auto industry personifies risk.

And now, as it prepares to manufacture the car that could redefine it as a popular consumer company - and possibly make or break its fortunes - the company is taking further risks to reduce costs and speed production. JL

Alexandria Sage reports in Reuters:

Most automakers test a new model's production line by building vehicles with cheap, prototype tools designed to be scrapped once they deliver doors that fit, body panels with the right shape and dashboards that don't have gaps.Tesla is skipping that preliminary step and ordering permanent, more expensive equipment as it races to launch its Model 3. “Advanced analytical techniques” (computer simulations)  would help Tesla in advancing to production tooling.

Virtual Reality Companies Navigate the Trough of Disillusionment

Virtual reality was certainly the most over-hyped new technology since the internet of things. Which is to say, there is about one of those every year or so.

The strategic question is whether VR will emerge from the trough or be consigned to wallow in it forever by the emergence of its perhaps less magical, but more practical and easily adaptable cousin, augmented reality. JL

Jeremy Kahn reports in Bloomberg:

Virtual reality has entered the dreaded "trough of disillusionment." That's the bust part of the boom-and-bust in public expectations that precedes mass adoption of a new technology in research firm Gartner's famous "hype cycle." Research still forecasts that virtual reality device shipments will reach 110 million units by 2021. The question is how long the field will have to wallow in the trough.

Italian Court Rules Mobile Phone Use Caused Brain Tumor

Whether this will become the bellwether  case many have anticipated remains to be seen. In the meantime, there's a lot to be said for texting. JL

Agence France-Presse reports via The Guardian:

An Italian court has ruled that excessive, work-related use of a mobile phone caused an executive to develop a benign brain tumour. Roberto Romeo said he did not want to demonise mobiles, “but I believe we have to be more aware about how to use them." Heavier use may pose some risk, other studies have found, and many experts say it is too early to do a proper assessment of what is a relatively new technology.

Ecommerce Isn't Killing Shopping Malls As Much As Newer Malls Are

People still like to shop and view it as a popular leisure time activity. Amazon's move into physical retail underscores the economic and social power of  the personal shopping experience.

But overbuilding of malls and failures to reimagine shopping centers' retail mix have made it more difficult for malls is secondary locations or with a less contemporary offering of stores to survive, especially given the challenge of ecommerce as an alternative. JL

Esther Fung reports in the Wall Street Journal:

Internet retailing is eating into mall revenue, but competition from newer shopping centers was the most common cause of death for malls over the past decade. Relocation of an anchor department store from the weaker property to the newer mall was a tipping point for the downfall of the weaker mall. Weak malls are typically the fourth or fifth mall in a town with a population insufficient to support that much shopping.

The Hidden Dangers of Linear Thinking In A Non-Linear World

Humans are predisposed to linear bias. It is how our brains are wired. And leaders are especially vulnerable because many of the tools at their disposal are based on quantitative relationships - causal or correlative - that reinforce that thinking. If x, then y. And this tendency has been bolstered by the web-based economy which takes pride in emphasizing its 'digitization' of every click. 

But the reality, as the following article explains, is that the same forces which have made business ever more dependent on technology, have also increased its non-linearity by introducing sufficient volume that greater subtlety is required in order to accurately interpret the meaning of all those numbers, loosely called data.

Successful enterprises recognize that they must focus on outcomes rather than indicators because the way to arrive at a goal may not always be the most direct. JL

Bart de Langhe and colleagues report in Harvard Business Review:

Research in cognitive psychology shows the human mind struggles to understand nonlinear relationships. Executives often focus too much on volume and costs instead of getting the price right because the large volume increases they see after reducing prices are very exciting. The nonlinear relationship between attitudes and behavior between what consumers say they care about and their actions is often highly nonlinear. But managers often believe quantitative tools, like surveys using 1-to-5 scales of importance, will predict behavior.

Apr 23, 2017

Can Twitter Be Saved?

Twitter has become ensconced as a significant communications link between businesses, celebrities and other consumer oriented entities and their fans/customers. But Twitter has not yet captured the value it is providing. 

Bruce Judson reports in Tech Crunch:

Twitter’s loss in the fourth quarter of 2016 was $167 million and less than 1% revenue growth. A central reason for Twitter’s profitability problem is that it has been far too good a deal for large advertisers.  Twitter (should) capture, through fees, the economic value its service brings these companies. Tweets bring these companies far higher returns than a proposed monthly fee plus any social media management expenses. "I also believe these companies know it."

You're A Bot? Cool!

The younger generation of mobile technology users accepts the fact that they might be interacting with a chatbot rather than a person. And many seem to think it's great. JL

Ben Sissario reports in the New York Times:

Chatbots have become a common part of online interaction for major consumer companies. Chatbots may also offer a glimpse of the music industry’s future, which is beginning to involve virtual-reality concerts, playlist algorithms and virtual assistants. When its bots send a new notification, 50 to 75% of subscribers open the message and click a link within 10 minutes. “I know it’s a robot. Does it creep me out that it’s a robot? No.”