True autonomy is worth almost nothing

Saturday, January 15th, 2022

True autonomy is worth almost nothing when it comes to trucks, Stefan Seltz-Axmacher of Starsky Robotics explains:

At Starsky we modeled that our robotrucks could achieve 42% margins even if each had a dedicated remote person paying attention 100% of the time. Those margins would jump to 58% if that remote driver only needed to pay attention for the first and last miles.

True autonomy, on the other hand, would have added less than 2% to our bottom line. Which means that the technological achievement $70b has been invested in over the last decade is worth less to the trucking industry than automatic billing.

The US trucking industry is structured around the systemic shortage of long-haul truck drivers. The 3.5 weeks/mo an over-the-road (OTR) driver is expected to spend in a truck is so miserable that few will do it for even $60k/yr. On the other side, trucking is a highly fragmented commoditized industry, which puts no fleet in the position where they can raise prices sufficiently to afford to pay drivers more. The result is that the market typically has at least 50,000 too few drivers to meet demand.

This shortage defines everything in American trucking — it’s why our trucks have nice comfortable cabs (worse fuel efficiency but better driver retention), it’s why our railroads are so profitable (which is why Warren Buffet buys them), and why our supply chain has even been shaped to minimize how much time trucks need to drive in cities (drivers get paid by mile and hate driving in slow-speed cities).

[...]

$60k/yr isn’t enough to entice over-the-road drivers but it is more than enough to recruit drivers who get to sleep at home.

[...]

Trucking is a business with both high fixed and variable costs. For every dollar that comes in, the best run firms typically spend 75% of it evenly divided between fuel, equipment, and labor. They then spend another 17% or so of administrative overhead per truck before eking out an 8% profit margin.

[...]

American truck drivers are paid only for the miles they haul freight — the hours spent waiting to be loaded or unloaded and taking mandatory breaks are all unpaid. As a result, the $200/day drivers typically earn is really only for the 7 hours/day they move freight and not for the 14 total hours they’re on-duty. This delta is big — it means that the trucking company feels like they pay drivers $28/hr while drivers feel like they only get $14/hr (or $8/hr if you consider the 24 hours/day drivers spend in a truck).

Drivers who aren’t physically in a truck don’t need to lose productivity when the truck stops moving. Rather than twiddling their thumbs at a distribution center the driver could simply switch to a different truck in the fleet which has been loaded and is ready to move. The driver actually cares about earning $200/day — if they earned that by driving for 11 hours (vs being on duty for 14) their hourly rate would increase. The fleet would see their $200 buy them 57% more hours of a truck moving which would drop their labor cost by 30%, bringing it to just 17.5% of gross.

As a result a robotruck which is remotely monitored 100% of the time by a teleoperator who is looking only at that truck while it moves would cut labor cost from 25% of gross to 16.5% and have profit margins of 42.5%.

95% of the hours an OTR truck moves is on the highway. If you were able to eliminate remote supervision for the bulk of those hours you would see per-truck labor cost drop to just 1.75% of gross and profit margin would soar to 58%.

The hardest 1% of the technical problem, automating the surface streets and interchanges, would end up being worth only about $600/truck/yr. Level 4 truck autonomy has less value than a daily coffee.

A big market will develop for speeding ecommerce to and from suburban warehouses long before air taxis are considered safe

Saturday, January 8th, 2022

Beta Technologies is valued at a billion dollars. Its Alia electric aircraft was not designed for passengers:

But Clark designed Alia primarily as a cargo aircraft, betting that a big market will develop for speeding ecommerce to and from suburban warehouses long before air taxis are considered safe to allow over city streets.

“We’re actually going to win at the passenger game because by the time others are doing passenger missions we will have thousands of aircraft, millions of flight hours and a safe, reliable, vetted design,” says the 41-year-old Clark, whose company is based in his hometown of Burlington, Vermont.

Clark is also spooling up what he thinks will be a lucrative second business: charging stations for electric aircraft of all types that he plans to dot around the country to create the aviation equivalent of Tesla’s supercharger network. There are nine up and running already, in a line from Vermont to Arkansas, with another 51 under construction or in the permitting process. Most will contain banks of used batteries from Alia aircraft, removed when their capacity has declined about 8%, giving them a profitable second life while Beta sells Alia owners replacement packs at about a half a million a pop. Equipping the charging stations with battery storage will avoid the need for expensive upgrades to the local power grid: Clark’s plan is for them to fill slowly at off-peak times, while unneeded power can be sold back at peak to utilities.

Alia Electric Aircraft

Beta aims to start delivering UPS’ first 10 aircraft in 2024 — assuming it wins safety certification for Alia by then from the Federal Aviation Administration. If not, the U.S. Air Force could end up fielding Alia first: Beta has won contracts worth $43.6 million to test out Alia for military use. In May, Alia became the first electric aircraft to win airworthiness approval from the Air Force for manned flight.

Beta says Alia’s bulbous cabin will be able to carry 600 pounds of payload, including the pilot, a maximum 250 nautical miles — at least 100 miles farther than any competitors that have prototypes in the air — or up to 1,250 pounds for 200 miles with one of the five battery packs removed. Clark expects FAA reserve requirements to restrict flights to 125 miles.

But given Alia’s high price — roughly double a similarly sized new Cessna Grand Caravan and up to five times the used planes that dominate small cargo fleets — Beta and UPS know Alia will only make economic sense if it flies a lot. That will require a radical reshaping of delivery networks away from the longtime hub and spoke pattern under which cargo planes typically make just one roundtrip per day, funneling packages from a local airport to a sorting center. Instead, they envision Alia flying directly from one UPS warehouse to another — cutting out truck trips as well as plane flights — and eventually straight to large customers. Frequent flying will allow savings as lower operating costs kick in. Beta promises 90% savings on fuel and cheaper maintenance due to the fewer parts of electric propulsion systems — plus a fat 35% reduction if computers eventually bump pilots from the cockpit altogether.

I was expecting cargo drones by now.

Fisher Price re-released their Music Box Record Player

Friday, December 10th, 2021

In 2010 Fisher Price re-released their Music Box Record Player, in a new version that does not work like the original:

Fisher Price Music Box Record Player 1

Fisher Price Music Box Record Player 2

Fisher Price Music Box Record Player 3

Fisher Price Music Box Record Player 4

Fisher Price Music Box Record Player 5

Fisher Price Music Box Record Player 6

Fisher Price Music Box Record Player 7

Fisher Price Music Box Record Player 8

Fisher Price Music Box Record Player 9

 

Fisher Price Music Box Record Player 10

(Hat tip to commenter Chedolf.)

Toyota is poised to make affordability, not range, at the center of its EV play

Sunday, December 5th, 2021

Toyota is poised to put affordability, not range, at the center of its EV play:

“‘Nothing happens until you sell a car’ is an expression we have internally,” he summed. “To have a positive impact on the environment, you must sell a high volume of cars…so it’s really important that the price point is such that we can make an actual business model out of it.”

To that point, Toyota expects that it will be selling millions of electric vehicles by the end of the decade. In September, the automaker announced plans to spend $13.5 billion on battery development through then, with aims of cutting the battery cost per vehicle by 50% versus the bZ4X.

[...]

“The bottom line is, over time we view EV range similar to horsepower,” Ericksen said, comparing it to how almost any customer really wanted 400 horsepower but, at an affordability standpoint, might settle for 120 hp. “People who are affluent and can afford a really expensive vehicle can afford a lot of horsepower.”

“Batteries are expensive, and the bigger you make the battery, the more expensive it is,” Ericksen said. “So the trick, I think long-term is not all about range, range, range; the trick is matching the range and the price point to what the consumer can afford.”

“And as people become more accustomed to operating an EV I think the anxiety over range is going to dissipate,” he continued, saying that many EV shoppers are going to understand they don’t need 300 or 400 miles—and certainly not in a second or third car.

Although we tend to agree that range is a red herring, especially for that second or third car, Toyota will face some headwinds if it dives into the “just enough” category. In a study released earlier this year, J.D. Power found that EVs with more than 200 miles of range had higher levels of satisfaction than those with less. And back in 2017, a comprehensive Autolist survey on minimum range found that only 14.6% of individuals saw 200 miles of range as enough, while the largest group, 38.9%, considered 300 miles of range to be enough. It emphasized, then, that a jump from 250 to 300 miles yielded an increase of 30% more people willing to buy an EV.

Range really is like horsepower.

Americans do indeed spend more when Thanksgiving falls early

Thursday, November 25th, 2021

Retailers don’t just put up decorations to steal Christmas sales from each other, Tim Harford notes. They are also boosting the total amount we impressionable customers spend:

In 2005, the economist Emek Basker…studied the US, where Thanksgiving now ranges between November 22 and 28, leaving as few as 26 or as many as 32 shopping days between Thanksgiving and Christmas. She found a clear pattern: Americans do indeed spend more when Thanksgiving falls early. The sums aren’t trivial: about $10 per person per day in today’s terms. Robert Urbatsch, a political scientist, used a similar approach to examine the jobs market and found that longer Christmas seasons lead to higher levels of employment.

Professor Basker estimated total holiday spending by comparing all spending in November and December vs all spending in September and October; the difference was about $300 per person in today’s money. Using a slightly different method, the author of Scroogenomics Joel Waldfogel has produced broadly similar estimates of the Christmas bump in sales.

Some of the best engineers would rather quit than be micromanaged

Saturday, November 20th, 2021

The Pragmatic Engineer (Gergely Orosz) looks at how Big Tech runs tech projects and ends with the following ideas as food for thought:

  • Iterative changes always work better than ‘big bang’ ones. A European tech company struggling with shipping very slowly hired a new VP of Engineering. This person decided to move the whole organization to a NoEstimates method in the first few months of their tenure. They organized a major event, hired a rock band, and unveiled the new way of working. The following weeks and months were chaos, and the organization reverted to doing what it did beforehand.
  • It’s more work to teach someone to fish, than it is to catch a fish for them. My approach to project management has been to coach and mentor members of my team to become project leads themselves. It was a lot more work upfront, but resulted in the team delivering more, people growing faster, getting promoted faster, and those people becoming engineering leaders faster than their peers. This approach was one of my best decisions in an empowered environment.
  • Directing, mentoring and coaching all have their uses. Directing – telling people exactly how to do something – is micromanaging when they can do it themselves. However, it’s a supportive activity when they can’t. Choose your approaches depending on whether you direct, mentor or coach and give space to people or teams, based on their capabilities as well. Over time, you should be doing little to no directing. But you might need to start with this.
  • The fewer people you need to make decisions, the faster you can make them. If an engineer only needs to talk to an engineer to decide, that decision will be faster than if the engineer needs to talk to their project manager, who talks to another project manager, who talks to an engineer, who talks to… you get it.
  • Optimizing for reporting is optimizing for a low-trust environment. Reporting at the executive levels is important. However, if you roll out project management methodologies that add heavy processes for the sake of reporting, then you’ll get more process, lower trust, and people gaming whatever reports you’re trying to produce.
  • Consultants will be biased to deliver easy-to-measure results because this is the simplest way to prove their value. If the easy-to-measure result is a good goal, this makes consultants a good investment. Just make sure it is a worthwhile goal, and directionally correct.
  • Learning from direct competitors is underrated. Understanding what a faster-moving competitor is doing – and experimenting with something similar – is a very smart one. Having a coffee with a peer at a competitor can be a great professional, and networking investment, not to mention one that may inspire you.
  • Some of the best engineers would rather quit than be micromanaged, especially when the job market is hot, and it’s so easy to switch jobs. A relevant quote from a response to my survey: “Recently, C-level executives have started to mandate the ways of working for all teams (everyone needs to follow the same methodology). It resulted in a lot of engineers leaving.”

Netflix’s greatest impact on pop culture will not be allowing us to binge watch

Thursday, November 18th, 2021

I haven’t watched Squid Game, but the Korean show is on pace to be the biggest hit in the history of Netflix:

Netflix has been investing in foreign language programming since 2015. It has spent more than $1 billion on Korean programs alone. This is the first Korean show to break through on this scale, and it is driving millions of new viewers to other East Asian series like “Sweet Home” and “Alice in Borderland.”

When all is said and done, Netflix’s greatest impact on pop culture will not be allowing us to “binge watch,” or stream TV on-demand. It will be globalizing the entertainment business, creating a platform for people from more than 190 countries to watch stories from all over the world.

Halloween used to be kid stuff

Tuesday, November 2nd, 2021

Halloween used to be kid stuff:

By 2005, just over half of adults celebrated Halloween. Today, that number has grown to over 70 percent. Those between 18 and 34 years old participate at the highest rate, and they’re also the holiday’s biggest spenders, shelling out over twice as much on their costumes as older adults and children.

Halloween celebrations have changed, too: less trick-or-treating and more parties and bar hopping. Today, alcohol is as important as candy to the Halloween economy.

The ports of Los Angeles and Long Beach ranked below ports in Tanzania and Kenya

Monday, November 1st, 2021

Stifling regulations have left America with the most inefficient ports in the world:

A recent review of container-port efficiency ranked the ports of Los Angeles and Long Beach below ports in Tanzania and Kenya, near the bottom of the list of 351 top ports. America’s ports are effectively third-world. The 50 most efficient ports in the world are mostly in Asia and the Middle East; none are in America.

Gygax was surprised to find both of the Blume brothers in attendance

Monday, October 18th, 2021

In the fall of 1985, Gary Gygax was the most famous and powerful figure in hobby gaming, Jon Peterson explains:

October 22 was a Tuesday, and Gygax was wrapping up another day at TSR corporate headquarters on Sheridan Springs Road in Lake Geneva, Wisconsin. His last appointment was a board meeting just after close of business; with 1,371 shares of stock, he held controlling interest in the company, and thus chaired the board. The meeting started late, at quarter past five. Five of the company’s six directors were present: two of the independent directors, James Huber and Wesley Sommer, and then the three principal shareholders: Gygax, Brian Blume, and Kevin Blume. Gygax was surprised to find both of the Blume brothers in attendance. Though they held a substantial stake in the company—as a family, nearly one thousand shares total—they had lost their executive positions at TSR following a reorganization the previous year.

The board proceeded to review the company’s turbulent negotiations with the American National Bank before moving on to the ostensible purpose of the meeting, a discussion regarding TSR’s royalty payments to authors. In recent internal memos, Gygax had insisted that the company allow its employees, himself especially, to retain all copyrights, trademarks, and royalties for works authored rather than assigning them to TSR; in the eyes of other directors, this was in violation of existing contracts. During the course of this discussion, Gygax mused that since it seemed the board would find it easier to afford him these privileges if he were not an employee, perhaps he should just resign.

It was of course preposterous for a majority shareholder to suggest their own resignation, but Gygax found the room coldly receptive to this course of action. The presence of the Blumes worried him. He turned to the Board Secretary, Willard Martens, to ask if his personal stake relative to the other shareholders had changed recently. At first, Martens replied only that Lorraine Williams had exercised her option for 50 shares in TSR. Williams had joined the company in April as Vice President of Administration; her options alone could not endanger Gygax’s majority.

“Have there been any other changes?” Gygax further inquired.

Martens only then volunteered, “Brian Blume exercised his option for seven hundred shares.”

Realization set in. Gary Gygax said simply, “I see.”

What did Gygax see, in that moment? He saw enough shares in play that he stood to lose control of TSR, a company he had founded and transformed into a global brand. But he surely also saw something even more dear at stake: that he might lose control of Dungeons & Dragons.

It’s a rejection of the casual, new money looks of the 2010s

Thursday, October 14th, 2021

Prep is back:

The aesthetic first gained a foothold among Gen Z, who took to TikTok to share “old money” inspiration: polo, croquet, lush gardens, and Italian villages. These scenes became inspiration for both fashion and decor: riding boots, Gucci crossbody bags, floral wallpaper, and lots of vintage. Meanwhile, millennials picked up leisure-class hobbies like sailing and golfing during the “solitary leisure” days of quarantine.

In some ways, it’s a rejection of the casual, new money looks of the 2010s, on display both by Instagram influencers and the hoodie-wearing millennial billionaire class. In other ways, it’s a practical consequence of how a supply shortage and a lockdown changed the economy in ways that will be permanent. And in still another sense, it’s an expression of escape: away from the traumatic events of the young 2020s and toward a nostalgia for another time.

Oxford shirts, tennis skirts, and tweed blazers are taking over social media. Gen Z is plastering Ralph Lauren campaign ads from the ’90s and vintage tennis photos all over TikTok and Instagram — and they’re spending big to recreate the looks.

Vox’s Rebecca Jennings first reported on the “old money” aesthetic in fashion, writing that Gen Z lusts after “the unapologetically pretentious Ivy League-slash-Oxbridge fourth-cousin-of-a-Kennedy country club vibe.”

TikTok users have rediscovered prep and are driving the trend, Morgane Le Caer, content lead at Lyst, told Insider. The global fashion shopping platform has seen increasing demand for preppy styles. Over the week ending on September 24, searches for leather loafers were up by 28%, pleated skirts by 16%, Peter Pan collar shirts by 23%, and pearl necklaces by 29%.

[…]

It’s also a response to the casual outfits that typifies the new millennial billionaire class: Dressing in the polished way of a northeastern socialite is ultimately a rejection of the tech CEO’s hoodie and sneaker ensemble.

The old money aesthetic has also made its way inside homes.

The posh look first took root in form of the “grandmillennial” vibe that some millennials gravitated towards pre-pandemic, rich in porcelain figurines, English antiques, chintz wallpaper, and brocade curtains. They were seeking décor inspiration everywhere from English country houses to neo-preppy brands like Rodarte.

[…]

Country clubs, yacht clubs, and old money hobbies like golfing and boating have enjoyed a pandemic boom.

During quarantine, these pastimes replaced the group activities typical of social leisure, like amusement parks, concerts, and crowded bars and restaurants. And they continued to remain popular even as the economy reopened, especially as people grew wary of indoor activities again during the spread of the highly contagious Delta variant.

US boat sales hit a 13-year high last year, per the National Marine Manufacturers Association, with younger first-time boat buyers leading the way. Online resource Discover Boating saw site traffic increase by 90% year-over-year through May among those ages 18- to 24-years-old, with millennials comprising the largest number of visitors overall. Experts expect the upswing in interest to last for a long time.

A similar story is unfolding out on the green. Golf play in the US increased by 14% from 2019 to 2020, according to Golf Datatech, the largest uptick since the industry market research company began tracking the data in 1998. Even spending on golf equipment is on the rise, with retail sales up by nearly 50% in June, July, and August compared to those months two years prior, per data from The NPD Group.

Big money for container carriers

Saturday, October 2nd, 2021

Two years ago, a 40-foot container cost less than $2,000 to transport goods from Asia to the U.S:

Today the service fetches as much as $25,000 if an importer pays a premium for on-time delivery, which is a luxury. That’s translated into big money for container carriers, with the industry on track to post $100 billion in net profit this year, up from about $15 billion in 2020, says John McCown, an industry veteran and founder of Blue Alpha Capital.

The real currency of the professional elite

Sunday, June 13th, 2021

The Class Ceiling combines an analysis of earnings data from the large-scale Labour Force Survey with findings from the Great British Class Survey (an online questionnaire hosted on the BBC website in 2011) to explain why it pays to be privileged:

In the case of the creative industries, being told that their employment practices are classist, racist and sexist would irritate and anger most senior staff, even when they implicitly accept the reality. Take their case study of one of the major TV companies, which they disguise as “6TV”, who, in the words of one self-employed — and underemployed — working-class actor, are “all these middle-class people making…working-class programme[s]”.

The creative industries’ diversity problem is obvious from the outset. It is partly about behaviour, an easy switch between the demotic and more rarefied. Senior commissioners at 6TV can put their boxfresh trainers up on the desk and swear freely, but only because they know how to do it at the right time and in the “right” context.

Friedman and Laurison’s interviews illustrate the power of “studied informality” — essentially the way in which working class ways of being have been ruthlessly appropriated by the upper middle-class as a way to make money and cachet from authenticity. 6TV’s commissioners pride themselves on programming that connects with “real people”, living “real lives” in “real places”. At the company’s gladiatorial commissioning meetings, where programme ideas get thrashed out, the most coveted skill is a kind of highbrow banter. You can proclaim, as one commissioner does, that “We’re talking about TV…it’s not Hegel!”, but you still have to know who Hegel is and to know how to get a laugh out of bringing up his name.

In other words, the authors highlight the multiplying effects of factors that privilege the already privileged. It’s not just that having rich parents makes your upbringing well resourced, which in turn makes you less risk-averse, secure in the knowledge that you have money to fall back on. It means being used to dinner settings with more than one fork. It means going to schools where the stock in trade is the cultivation not of passionate argument but of dispassionate debating skills — because none of it really matters, does it Boris? Wordplay, wit, highbrow references, and above all, the display of lightly worn intelligence deployed to raise a knowing chuckle, are the real currency of the professional elite.

They’re unlikely to function as effective team members in an organization that has to deal with everyday realities

Saturday, June 12th, 2021

R.R. Reno is not inclined to hire graduates from America’s elite universities:

A decade ago I relished the opportunity to employ talented graduates of Princeton, Yale, Harvard and the rest. Today? Not so much.

As a graduate of Haverford College, a fancy school outside Philadelphia, I took interest in the campus uproar there last fall. It concerned “antiblackness” and the “erasure of marginalized voices.” A student strike culminated in an all-college Zoom meeting for undergraduates. The college president and other administrators promised to “listen.” During the meeting, many students displayed a stunning combination of thin-skinned narcissism and naked aggression. The college administrators responded with self-abasing apologies.

Haverford is a progressive hothouse. If students can be traumatized by “insensitivity” on that leafy campus, then they’re unlikely to function as effective team members in an organization that has to deal with everyday realities. And in any event, I don’t want to hire someone who makes inflammatory accusations at the drop of a hat.

Student activists don’t represent the majority of students. But I find myself wondering about the silent acquiescence of most students. They allow themselves to be cowed by charges of racism and other sins. I sympathize. The atmosphere of intimidation in elite higher education is intense. But I don’t want to hire a person well-practiced in remaining silent when it costs something to speak up.

The work that made Darwin and Newton famous was actually closer in spirit to building treehouses than studying for exams

Tuesday, June 8th, 2021

A few days ago, on the way home from school, Paul Graham’s nine-year-old son told him he couldn’t wait to get home to write more of the story he was working on:

This made me as happy as anything I’ve heard him say — not just because he was excited about his story, but because he’d discovered this way of working. Working on a project of your own is as different from ordinary work as skating is from walking. It’s more fun, but also much more productive.

[...]

You have moments of happiness when things work out, but they don’t last long, because then you’re on to the next problem. So why do it at all? Because to the kind of people who like working this way, nothing else feels as right. You feel as if you’re an animal in its natural habitat, doing what you were meant to do — not always happy, maybe, but awake and alive.

[...]

Instead of telling kids that their treehouses could be on the path to the work they do as adults, we tell them the path goes through school. And unfortunately schoolwork tends be very different from working on projects of one’s own. It’s usually neither a project, nor one’s own.

[...]

It’s a bit sad to think of all the high school kids turning their backs on building treehouses and sitting in class dutifully learning about Darwin or Newton to pass some exam, when the work that made Darwin and Newton famous was actually closer in spirit to building treehouses than studying for exams.

[...]

When I was picking startups for Y Combinator, I didn’t care about applicants’ grades. But if they’d worked on projects of their own, I wanted to hear all about those.