2021-03-22 7 min read


Notes, 2021-03-22.

A few weeks ago I expressed skepticism here about businesses with multiple business models. “It’s difficult to succeed at just one thing,” I wrote, “and the desire to succeed at multiple things strikes me as deeply naïve.”

Of course, it was too broad a claim, and a smart reader called me on it. It’s not as if I would bet against anyone who serves multiple customer bases or sells multiple kinds of stuff. Nor would I claim that diversifying one’s business necessarily results in worse outcomes, or makes it harder to achieve good ones. But I do believe that business model diversification increases complexity. It introduces financial and (perhaps more importantly) organizational nonlinearities, making it really hard to prepare for an uncertain future.

I’m about halfway through (re)reading The Idea Factory with The Prepared’s Members’ reading group right now, and am struck by just how focused Bell Labs’ commercial goals were. After the 1956 consent decree allowing AT&T a monopoly over the US telephone network, all of Bell Labs’ patents were issued royalty-free; Bell was effectively barred from having a technology licensing business model. Moreover, Bell repeatedly declined to pursue new technologies due to concerns about being broken up. They (and regulators) ultimately saw themselves as a phone company, and their job was to milk that vertical monopoly as hard as they could - not to get distracted by satellites, or integrated circuits, or any of the other technologies that Bell pioneered and which now dominate modern life.

I don’t believe it’s an accident that Bell Labs was both *so* innovative and also *so* focused on a narrow (and deep) commercial opportunity. But for the topic at hand - for the issue of whether it’s a good idea for the random entrepreneur to go to market with multiple business models - I don’t think it even matters. Most folks aren't motivated enough, or driven enough, or agile enough to start and maintain a business as a plumber, where the technologies at play are mature and the customer is often *quite* motivated to write a check. Why would those same folks - heck, why would I - be capable of building a company that’s *much* more complex than that?

-Spencer Wright

The most clicked link from last week's issue (~10% of opens) was a 1/12 scale Eames lounge chair being made.

Planning & Strategy.

  • In about 2013, I was doing some work for GE Corporate Strategy when a friend there marveled about how GE Capital - not GE Aviation but GE Capital - employed a team of pilots who were tasked with flying airplanes around when they were due for service. The reason was GE Capital Aviation Services (GECAS), which owns about 1650 aircraft (for context, Delta operates just 768), leasing them to airlines and, critically, providing service on both those airplanes and a whole bunch of additional jet engines. And so GE Capital employed not only pilots but also mechanics, and aircraft operations consultants, and also teams of underwriters and analysts and other folks to help their airline customers "eliminate residual value and asset disposal risk."

    Which is all to say that early 21st century GE was kind of the ur example of a high complexity business. But they’ve done much to unwind that complexity, and recently announced that they were selling off GECAS - a move that will make a new, much more focused company worth ~$40B.
  • Me, writing in Why Is This Interesting, on the inherent morality of maritime right of way laws and how they could (and should) be extended to our roads.
  • A rather unexpected argument that privately developed elevators should be converted to public ownership. “Elevators are almost exclusively privately held. That is not unusual for new forms of transportation—New York’s original subway lines were built out by private investors, as were its commuter lines...The technology, however, has long since become mature and developed. There is no justification for continuing to sanction private monopolies on the vertical realm: we are ready for the public elevator.” I especially love the analogy between elevators and cul-de-sacs.
  • A profile of Puritan Medical Products, a nasal swab manufacturer which is run by two cousins who hate each other. “Nonetheless, Puritan almost has a monopoly on the market for Covid swabs in the U.S. now and is positioned to dominate a global medical swab industry that could be worth as much as $4 billion by 2027...For now, new competitors don’t seem much of a threat. Experts did design injection-molded and 3D-printed testing swabs, but production is expensive, and clinicians are reluctant to switch to devices from new companies.”
  • A recap of Apple’s Racial Equity & Justice Initiative, which includes a developer academy, an investment in Harlem Capital, and a learning hub for HBCUs.

Making & Manufacturing.

Maintenance, Repair & Operations.

  • The quality of the municipal water supply for the city of Warsaw, Poland is monitored by clams; Minneapolis’ water supply is monitored by mussels. “Snuggled up side by side, a dozen mollusks live in a tank with water continuously being cycled in from the Mississippi River. If the mollusks come across anything funky like gasoline or heavy metals, they’ll all clam up, setting off tiny sensors attached to their shells.”
  • A good, succinct explanation of why ISO 8601 is the only suitable date/time format - for legibility, for consistency, and for its ability to transcend language and culture.

Distribution & Logistics.

Inspection, Testing & Analysis.


  • A few interesting cargo bike designs:
  • The Flevobike Green Machine, a recumbent with a fully enclosed drivetrain and a Rohloff 14-speed internally geared hub that operates as a totally enclosed mid-drivetrain gearbox. Older Flevobike models are even weirder, as are all of the wacky remixes and adaptations on the Flevobike Fanclub Site. See also these old (and rather moody) Flevo engineering sketches.
  • XYZ Cargo sells a line of 2, 3, and 4 wheeled cycles made of square aluminum tubing, bolted together with end connectors. Based on an open source (Creative Commons FTW!) design called the XYZ Spaceframe Vehicle, they look a little floppy to me but have some pretty rad configurations due to their modular framing system.
  • CW&T’s Penny Pelican is a front-loading cargo bike made of bolted-together aluminum tubing & plate. I found the handling geometry totally incomprehensible the one time I rode it, but to be fair to Che-Wei it didn’t have a seat installed at the time - and anyway, seeing him riding around Brooklyn with his two kids loaded into the Pelican case is *extremely* charming.
  • A fun thing I’ve been playing with at the shop with the kid: The Great International Paper Airplane Book, which was published in 1967 and still very much holds up. And yes, I’ve got a bunch of White Wings lined up too ;)
  • I blasted through The Ice at the End of the World while installing a new door last weekend. The book is partly about the field of glaciology, partly about climate change, and partly about a bunch of variably unsavory explorers doing all sorts of crazy stuff in Greenland. The book reminded me of ice-albedo feedback (the effect that as polar ice melts, it exposes materials that are usually less reflective than ice - increasing the amount of solar energy absorbed by the earth and therefore accelerating climate change) and learned of Eismitte, a shelter dug into the inland ice sheet which allowed explorers to survive the extreme cold.
  • Sodium citrate, which is often used to keep melted cheese emulsified and gooey, has the chemical compound Na3C6H5O7.

Photos of the Maunsell Sea Forts under construction in 1942.

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