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Amazon Air Takes Off for Faster Ecommerce Operations

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As I have noted, the core component in marginal cost in an ecommerce business is on distribution. And anyone who controls that distribution has an upper hand. The news is that Amazon has purchased many planes; it used to lease. What that implies is that Amazon is going all the way to run an end to end logistics operations, across all nexus and dimensions, from road to air, in order to deliver those packages on time and in full.

Amazon is taking delivery to new heights. For the first time ever, the e-commerce giant has purchased 11 Boeing 767-300 planes, having previously leased aircraft in the past. The move is part of an effort to beef up its cargo operations and to “supplement capacity” from carriers like UPS and FedEx. Amazon expects to have more than 85 planes in service by the end of 2022, according to Bloomberg, to “keep pace in meeting our customer promises.” Amazon is one of the companies that has flourished during the pandemic as consumers have increased online shopping exponentially. (source)

Simply, for Amazon Prime to remain a rainmaker for Amazon, it needs to deliver a new dimension of service. That way Primer membership renewal will continue to happen. Amazon has more than 150 million Prime members globally. If you take an average of $100 per member, you will get $15 billion revenue  which these members pay for the privilege to shop at Amazon. That money could have cost Amazon a lot if it was to be borrowed from a bank. But here, Amazon gets that money interest-free from these members.

More so, because the members have paid this money, many of them are incentivized to shop more at Amazon, creating a virtuous circle which enables Amazon to make more money. Buying planes to keep these customers happy, through faster delivery, is a good call for Amazon.

Understand Your Marginal Cost!

Amazon-Berkshire Hathaway-JPMorgan Chase’s Haven Fails

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It was seen as a game changer in the American healthcare sector when it was unveiled many months ago. Yes, bringing JP Morgan Chase, Amazon and Berkshire Hathaway  together to invent a new system was a big deal. But healthcare is not an ecommerce operation which you can optimize easily. Of course, it is not banking, and certainly falls outside the domain of Warren Buffett’s investment sagacity. 

So, the news is that Haven, a  joint venture between the CEOs of Amazon, Berkshire Hathaway and JPMorgan Chase, has informed employees that it will shutter by the end of the month, reminding everyone of the difficulty of changing the highly regulated healthcare sector in the United States..

  • Haven began informing employees Monday that it will shut down by the end of next month, according to people with direct knowledge of the matter.

  • Many of the Boston-based firm’s 57 workers are expected to be placed at Amazon, Berkshire Hathaway or JPMorgan Chase as the firms each individually push forward in their efforts, the people said.

  • One key issue facing Haven was that each of the three founding companies executed their own projects separately with their own employees, obviating the need for the joint venture to begin with, according to the people, who declined to be identified speaking about the matter.

Sure, the experiment will offer many insights to the companies as LinkedIn noted: “Three years ago, the trio sent shock waves through the medicine world with hopes its new company could innovate in the primary care, insurance and prescription drug space. Haven’s collapse reflects how hard it is to “radically improve” America’s “complicated and entrenched” health care system, per CNBC.”

The lesson here is evident: the human system is different and sometimes the most valuable thing is not measured in financial terms. While we can improve banking, investment thesis and ecommerce,  no one can optimize how doctors work because the systems they work on are evidently unique and different.

Tekedia Mini-MBA Early Registration Ends Soon; Register Now for Great Benefits

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Frictions. Capabilities. Products. Yes, markets have frictions, and you need capabilities to fix them. Those capabilities help you arrange and organize factors of production to create products and services. Products and services are forces which overcome those “frictional forces” which exist in markets.

 I was a very good physics student in secondary school: if there is a force, you need a force to overcome it. Your customers’ problems are market frictions for you. The products or services you deliver are the forces you are creating to overcome them. Make those products great, moments come.

I ask you to join me and other 90 faculty members at Tekedia Institute mini-MBA where we educate on the mechanics of markets and business systems. I promise you – you will see things differently. You will learn of new frameworks and models. You will ADVANCE.

Besides, you get a free course on Facyber.com cybersecurity training, our published books like The Dangote System, Africa’s Sankofa Innovation, etc plus free access to our Innovation Week, and Career  Week (not for jobs, but for the physics of great careers).

Our early bird ends soon; register now to beat it and get those benefits. Click here and register.

Tekedia Mini-MBA Edition 4

The Unification Google Does Not Want

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Google has changed over the last few years, looking from the outside. That is expected as our world, and indeed everything, has changed. First is the advertising devaluation: if you needed 20,000 page views to make $1, Google could just wake up one day, and shift the goal post to 50,000 views for the same $1. 

That is why in most websites, especially in Nigeria, media houses are adding ads everywhere just to make up what was “lost”; it is a vicious circle as they have no chance. You can call that free market pricing under market forces. But you need to understand that Google owns the open search and advertising planet, with Facebook participating via its walled planet.

It is extremely bad: you grow traffic, and you make less money. That is the world Google has given publishers. Sure, it can claim that advertisers are paying less. That is not true; Google’s profit continues to improve, and what that tells me, is that it is using its market power to extract more value from small publishers around the world. It is very fearful if you look deep on the power one company has.

So, the news that its workers want to form a union is a good one. I wish them good luck and hope they can change this company for good, not just internally but externally. But let this be known: this is one unification or “organizing” Google will fight, even as it promises to “organize” the world information!

CEO of Google

In one of the first Big Tech unions, more than 225 workers at Google have formed a “minority union” with the Communications Workers of America. The more informal grouping allows for the inclusion of contractors at the Alphabet-owned company, who outnumber full-time workers, and doesn’t require contract negotiations. The announcement comes after demands by workers on such issues as pay and harassment, and is aimed at giving “structure and longevity to activism at Google,” according to the workers, writes The New York Times.

On the union, Samuel Nwite has a detailed report on it here for Tekedia: “This statement suggests that Google will not recognize the newly formed union and will carry on like before. But the union leaders said their goal isn’t to force a new system, but to ensure that things are done right. So for the year 2021, it is not going to be business as usual at Google.”

Let’s hope they include how Google prices its products for many independent publishers. 

Everyone wants to be a publisher and depends on ads. But watch out, after six months, the vision goes. Google’s power on ad is more power than whatever Rockefeller did on oil many decades ago. This has made visiting local Nigerian newspapers challenging as they put adverts everywhere, pursuing an illusion.

We Have Had Enough: Google Workers Form A Union

 

We Have Had Enough: Google Workers Form A Union

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The year started differently at Google. The web search giant’s workers have kicked off a long anticipated movement that will alter the status quo and ensure more accountability from their employer.

On January 4, the workers announced that they have formed a union of more than 200 employees who believe that Google needs to do better. The union comes at the heels of culminating controversies between Google and its workforce that have kept the Silicon Valley big name in the bad page of the news recently.

There have been issues of moral questions which spiraled into a degenerating toxic relationship between Google and its employees. The staff believe the situation can be ameliorated if there is a strong union to question some of the decisions of those at the helm. Google was said to have used its artificial intelligence technologies in military contracts among other things.

On Nov, 1, 2018, about 200 Google employees teamed up with employees of other subsidiaries of Alphabet, Google’s parent company, including Waymo and Verily to stage a global demonstration. The protest had been based on the company’s inability to take action against cases of alleged sexual misconduct and racial discrimination. Two executives who were fingered in the allegation were paid tens of millions of dollars, and the company did little to amend the situation that enabled the impunity.

Two years later, nothing seems to have changed. The case of Timnit Gebru, a leading artificial intelligence researcher who was recently fired amplified the concerns of the employees – now they have had enough.

In a statement published by New York Times, the union leaders listed series of culminating events at Google that prompted the coalition of employees to take action. They have been silently working on the move for about a year.

The two of us are software engineers, and we were recently elected executive chair and vice chair of the Alphabet Workers Union, a group of more than 200 workers in the United States who believe our company’s structure needs to change.

For far too long, thousands of us at Google — and other subsidiaries of Alphabet, Google’s parent company — have had our workplace concerns dismissed by executives. Our bosses have collaborated with repressive governments around the world. They have developed artificial intelligence technology for use by the Department of Defense and profited from ads by a hate group. They have failed to make the changes necessary to meaningfully address our retention issues with people of color.

Most recently, Timnit Gebru, a leading artificial intelligence researcher and one of the few Black women in her field, said she was fired over her work to fight bias. Her offense? Conducting research that was critical of large-scale A.I. models and being critical of existing diversity and inclusion efforts. In response, thousands of our colleagues organized, demanding an explanation. Both of us have heard from colleagues — some new, some with over a decade at the company — who have decided that working at Alphabet is no longer a choice they can make in good conscience.

Workers have mobilized against these abuses before. Organized workers at the company forced executives to drop Project Maven, the company’s artificial-intelligence program with the Pentagon, and Project Dragonfly, its plan to launch a censored search engine in China. Some of Alphabet’s subcontractors won a $15 minimum hourly wage, parental leave, and health insurance after an employee outcry. And the practice of forced arbitration for claims of sexual harassment was ended after the November 2018 walkout — albeit only for full-time employees, not contractors. A few months later, Google announced that it would end forced arbitration for employees for all claims.

To those who are skeptical of unions or believe that tech companies are more innovative without unions, we want to point out that these and other larger problems persist. Discrimination and harassment continue. Alphabet continues to crack down on those who dare to speak out, and keep workers from speaking on sensitive and publicly important topics, like antitrust and monopoly power. For a handful of wealthy executives, this discrimination and unethical working environment are working as intended, at the cost of workers with less institutional power, especially Black, brown, queer, trans, disabled, and female workers. Each time workers organize to demand change, Alphabet’s executives make token promises, doing the bare minimum in the hopes of placating workers.

It’s not enough. Today, we’re building on years of organizing efforts at Google to create a formal structure for workers. So far, 226 of us have signed union cards with the Communications Workers of America — the first step in winning a recognized bargaining unit under U.S. law. In other words, we are forming a union.

We are the workers who built the Alphabet. We write code, clean offices, serve food, drive buses, test self-driving cars and do everything needed to keep this behemoth running. We joined Alphabet because we wanted to build technology that improves the world. Yet time and again, company leaders have put profits ahead of our concerns. We are joining together — temps, vendors, contractors, and full-time employees — to create a unified worker voice. We want Alphabet to be a company where workers have a meaningful say in decisions that affect us and the societies we live in.

As union members, we have created an elected leadership and representative structure with dues-paying members. Our union will be open to all Alphabet workers, regardless of classification. About half of the workers at Google are temps, vendors or contractors. They are paid lower salaries, receive fewer benefits, and have little job stability compared with full-time employees, even though they often do the exact same work. They are also more likely to be Black or brown — a segregated employment system that keeps half of the company’s work force in second-class roles. Our union will seek to undo this grave inequity.

Everyone at Alphabet — from bus drivers to programmers, from salespeople to janitors — plays a critical part in developing our technology. But right now, a few wealthy executives define what the company produces and how its workers are treated. This isn’t the company we want to work for. We care deeply about what we build and what it’s used for. We are responsible for the technology we bring into the world. And we recognize that its implications reach far beyond the walls of Alphabet.

Our union will work to ensure that workers know what they’re working on, and can do their work at a fair wage, without fear of abuse, retaliation or discrimination. When Google went public in 2004, it said it would be a company that “does good things for the world even if we forgo some short-term gains.” Its motto used to be “Don’t be evil.”

We will live by that motto. Alphabet is a powerful company, responsible for vast swaths of the internet. It is used by billions of people across the world. It has a responsibility to prioritize the public good. It has a responsibility to its thousands of workers and billions of users to make the world a better place. As Alphabet workers, we can help build that world.”

Google said in a statement following this announcement that it will continue to interact  directly with staff.

“We’ve always worked hard to create a workplace that supports and rewards our workforce,” said Kara Silverstein, Google’s director of people operations. “Of course, our employees have protected labor rights that we support, but as we have always done, we will continue to interact directly with all of our employees.”

This statement suggests that Google will not recognize the newly formed union and will carry on like before. But the union leaders said their goal isn’t to force a new system, but to ensure that things are done right. So for the year 2021, it is not going to be business as usual at Google.