The NYT Times has worked hard to cut costs and get people to pay for digital content. It has been more successful in this quest that many other newspapers around the world. But as more and more people read their news on smartphones, it faces challenges from digital-only news sources. Politico has published an insightful piece on the big transformation that still lies ahead for the NYT if it wants defend its position as leading news organization.
As far as I can tell, Thian is trying to move Credit Suisse in the right direction to make the firm more sustainable. But a large fraction of employees is in open revolt again him. Will be successful. The NYT reports: “When Tidjane Thiam took over at Credit Suisse last July, he laid out a new direction for a financial giant with a storied investment banking history: Do less investment banking. [...] One year in, Credit Suisse stock is down 50 percent. And the investment bank, the second largest in Switzerland after UBS, is in open revolt.” Read full story.
Australia’s most valuable brands. I would have not guessed them correctly.
Elon Musk gave an interview that makes it clear that the fundamental objective for Tesla is not profits.
Question: The German automakers just presented their responses to Tesla in Frankfurt at the international automobile show. What do you think of the Audi e-tron quattro and the Porsche Mission E?
Any action in the direction of electric mobility is good. Our goal at Tesla is for cars to transition to e-vehicles. That’s why we opened up all our patents for use by anybody.
And who has used them?
Maybe the companies you already mentioned. When I saw a diagram of Porsche’s Mission E, I thought: It looks exactly like our car. Which is fine. It’s more important to accelerate the advent of sustainable transport.
Jeff Dyer, Nathan Furr, and Curtis Lefrandt have put together a useful graphic on the relative uncertainty in different industries.
John Cassidy explains in the New Yorker:
Thanks to the sterling efforts of Sylvia Nasar, Ron Howard, and Russell Crowe, many people are aware that John Nash, the Princeton mathematician who was killed over the weekend in a car crash on the New Jersey Turnpike, lived a remarkable life. It included early academic stardom, decades of struggling with schizophrenia, and, in 1994, a shared Nobel Memorial Prize in Economic Sciences. But outside the field of economics, Nash’s contribution to game theory, for which he was awarded the Nobel, remains rather less well understood.
Although it is often used in economics, game theory can be applied to any venue where people, or other decision makers, interact strategically and follow rules-based behavior. The setting could be nuclear negotiations, such as the ones currently taking place between Iran and the great powers. It could be a product market, in which a number of firms compete for business. Or it could be a political campaign, in which various candidates try to outdo each other. The word “strategically” is important, because the various players, in choosing from a variety of possible moves, take account of one another’s actions, or likely actions. And the phrase “rules-based” means that the players are acting purposefully and seeking to maximize their own advantages, rather than behaving passively, or randomly.
The founders of Kickstarter wanted to ensure that their company does not stray from their fundamental objective of ““help bring creative projects to life.” Now they have reincorporated themselves as “public benefit company”. The NY Times reports:
As co-founders of Kickstarter, the popular online crowdfunding website that lets people raise money to help fund all manner of projects, including cooking gadgets and movies, Mr. Strickler and Mr. Chen could have tried to take their company public or sell it, earning millions of dollars for themselves and other shareholders.
Instead, they announced on Sunday that Kickstarter was reincorporating as a “public benefit corporation,” a legal change they said would ensure that money — or the promise of it — would not corrupt their company’s mission of enabling creative projects to be funded.
“We don’t ever want to sell or go public,” said Mr. Strickler, Kickstarter’s chief executive. “That would push the company to make choices that we don’t think are in the best interest of the company.
The economist reports on the trouble of Tesco as UK consumers shopping habits change and the German discounters Aldi and Lidl roll our their operational models in the UK.
By any measure the figures were eye-popping, worse even than most analysts had expected of the struggling company. Tesco made the largest pre-tax loss, of £6.4 billion ($9.6 billion), in British retail history, eight times as much as the previous record, set by Morrisons last year. This was also the sixth-largest loss in the country’s corporate history. Most of it (about £4.7 billion) was due to a fall in the property value of Tesco’s British stores. This was not merely an accounting matter, but a sign of how its out-of-town hypermarkets have fallen out of favour with consumers who shop online or use smaller convenience stores. Underlying profits were 68% down on the previous year, at £961m, and overall sales were down by 1.8%. The stock that Tesco keeps in its warehouses is worth £570m less than previously thought, and the pension scheme is £3.89 billion in deficit. And so on.
Full Story on Economist.com
Gerhardt Steidl was asked: Many people call you the “king of printing” and some artists will trust no one else with their books. In what way are Steidl’s books different than other books?
Most of the publishing houses in the world are owned by shareholder companies and their interest is to make profit. My publishing house is a private business. I founded it in 1968 and it is still owned by me. It is a family business. It is a Manufaktur and we don’t set any limits on cost. A Steidl book is always made in Germany, in Göttingen, in Düstere Straße 4 and there is a guy, Gerhard Steidl, who is hands on. So, believe it or not, I oversee every sheet that tumbles out of our press. This craftsmanship and this know-how we bring to every one of our babies, our books, makes a huge difference compared to the production processes of other companies.
Source: The Talks
CEO of Qantas highlights that some private investors explicitly do not focus on financial returns but on social impact. This is called impact investing.
Joyce writes on LinkedIn: It’s not a well-known term in Australia, perhaps because our economic prosperity makes it seem less relevant. But the impact investment market here is growing, targeting areas of social disadvantage that government funding alone can’t fix, from unemployment to homelessness. The point of difference is that an investment relationship requires much more sustained engagement between the investor and the business they’re supporting, compared with a one-off donation or grant.
Indigenous businesses have a particular interest in the potential for impact investment. The Forrest report found that Indigenous enterprises are 100 times more likely to employ Indigenous Australians than other businesses, so building the capacity of these enterprises is vital. Organisations like the CAPE Fund in Canada and Indigenous Business Australia show the way forward, and Qantas is playing a role through our Reconciliation Action Plan, partnerships with Career Trackers and Supply Nation, and backing for ventures such as the North Kimberley carbon offset project.
I have seen a lot of bookshops go out of business, including the famous bookshop on Telegraph Avenue in Berkeley. From Adelaide comes a new business model for having a physical bookshop that moves to different locations in the city. A pop-up bookshop. The owners write:
Curating an ever-evolving, eclectic mix of old, new and collectible books (in itself somewhat out of step), we’ve popped up in various locations, in various styles, within Adelaide’s CBD. On the street, at boutique markets, in cafes, empty shopfronts, arcades. The idea being that by putting ourselves in plain view, we remind people that bookshops exist.
Well, that’s our story too. In November 2013, we pushed ourselves by leasing a space on Adelaide’s main retail strip, Rundle Mall. Next door to French Connection, across from Nespresso, sharing mall frontage with Apple and Nike. It was a make-or-break philosophy – and we received the most amazing reactions from the public who just couldn’t believe what they’d stumbled upon. It lasted four months and we were encouraged enough by that success to give Rundle Mall another go this year. We’re putting a bookshop on the main stage in a city where people constantly – interminably to us – decry the fact there are “no bookshops in Adelaide”.
But how can this work? Our bookshop is a business. Businesses survive by making money. Bookshops don’t make enough money to pay big rents. All these statements are true, more or less. All we have is a complete, unfaltering faith that what we’re doing is worthwhile and important and, because of this, we’ll be OK.
At the moment, we sell just enough books to pay our wealthy landlord, buy stock and cover our modest living expenses. It’s long hours, risky and stressful but we love it. We need to make money to survive but aren’t driven by money. In fact, the short answer to the “how can it work?” question is that we sacrifice money for lifestyle. We treat it as a seasonal occupation, working unsustainably hard for a short period of time then taking a break.
Full Story in the Guardian
The director of CIA has decided to that CIA needs a radical overhaul of its structure. The NY Times reports:
Drawing from disparate sources — from the Pentagon to corporate America — Mr. Brennan’s plan would partly abandon the agency’s current structure that keeps spies and analysts separate as they target specific regions or countries. Instead, C.I.A. officers will be assigned to 10 new mission centers focused on terrorism, weapons proliferation, the Middle East and other areas with responsibility for espionage operations, intelligence analysis and covert actions.
During a briefing with reporters on Wednesday, Mr. Brennan gave few specifics about how a new structure would make the C.I.A. better at spying in an era of continued terrorism, cyberspying and tumult across the Middle East. But he said the current structure of having undercover spies and analysts cloistered separately — with little interaction and answering to different bosses — was anachronistic given the myriad global issues the agency faces.
During his two years as C.I.A. director, Mr. Brennan has become known for working long days but also for being loath to delegate decisions to lower levels of C.I.A. bureaucracy. During the briefing on Wednesday, he showed flashes of frustration that, under the C.I.A.’s current structure, there is not one single person in charge of — and to hold accountable for — a number of pressing issues.
Source: NY Times
The Guardian reports on the problems of the existing business model:
Australia Post has warned its losses will amount to $6bn over the next 10 years unless the government allows it to change the price of sending letters.
The national carrier is forecasting its first full-year loss in 30 years, or since before it was corporatised.
Its chief executive, Ahmed Fahour, said Australia Post had a competitive parcel business, but losses from its letters business were swallowing up profits.
Fahour said the government understood the scale of the problem. “They either fund the next 10 years of losses, which could amount to $6bn, or we’re out of business,” he told Fairfax radio on Monday.
Australia Post reported a first-half profit after tax of $98m, down 56% on the first-half result of the previous year.
The letters business lost $151m, 57% worse than the loss in the first half of last financial year.
Fahour said Australia Post had never been subsidised and had always paid dividends to the government, but the world had changed.
“Either we get a massive injection from the government to keep the business going, or they give us the permission to manage the business and therefore no subsidy is required and the business can continue,” he said.
Letter volume decline accelerated to 8.2% year-on-year, the largest fall recorded since Australia Post’s letter volumes started falling in 2008.
In this context this quote by Jim March also is relevant:
“Leadership involves plumbing as well as poetry.”