Airbnb, Longtail Theory, Erdal Arikan, Virgin Atlantic and Women in the Workforce
With Prfizer and Moderna both showing breakthrough results in the Vaccine for COVID, it seemed like the right time to talk about breakthroughs. Not particularly about the Vaccine development but I am safely assuming you would have already read about that. These breakthroughs in business are an enigma. The same ones that newspapers present as overnight wonders, but which you know in your heart is a result of a million small insignificant decisions. In the shadows the sweat you put in prepares you to shine in the light. Pandemics usually make a spoiler of potential breakthroughs but finally as the world accepts and adjusts to the disruption, the light is shining through.
One of these stories is of last week, as Airbnb fights off the menace of the bats to fulfill its destiny. Another goes back to the first theory of internet commerce and how Chris Anderson coined the Longtail theory. As relevant today as it was a couple of decades back. Another takes us back to Erdal Arikan’s research in MIT in 1981 and for two decades after it, the impact of which will be seen in 2021 in 5G Networks. Giddy Optimism is not my forte, so we continue with a story to understand the ripple effect of a pandemic, what Virgin Atlantic had to do to survive and how the pandemic disrupted the suppliers and even their suppliers. We end with a reverse breakthrough, how decades of development in actual women empowerment and work force participation has been reversed.
1. It might be too early to celebrate the resilience of Airbnb but this is certainly a step in the right direction. Airbnb finally unveiled its IPO prospectus. The business world is in a dire need of fancy ideas turning into sustainable businesses and Airbnb for its short but beautiful history would be an example of things done right. A lot of the actions taken might not be sustainable and governments across major cities are not Airbnb’s best friends.But good design and sound business decisions have an ability to overcome the struggles that in their core define journeys. Here is hoping a design first company becomes a successful listed company.
2. Before the words Unicorns and Blitzscaling and Growth hacking became mainstream, there was the article by Chris Anderson. Anderson in 2004 wrote about the Long Tail strategy and followed it up with a book. The article was quoted for many years in almost every pitch deck. The idea of the Long tail was that you would sell less or more items. The idea was that with the absence of physical inventory and with great recommendation systems you would have huge aggregators who would be able to match consumer demand. In the space of 16 years you can see why it was a great idea. Amazon, Netflix and so many others are products of the long tail. But as expected somethings did not go as planned. Recommendation systems are not as advanced as they were supposed to be and there is intense competition among content creators. The idea of the article is to study how the biggest idea of the 2000’s fared and how the next 20 years would pan out for the Internet industry.
3. Erdal Arikan worked for 20 years on a problem no one wanted to solve. Every time you send information noise gets in and how do you correct the noise that comes in. The problem was theoretical and had been solved to a small extent. There was nothing else to do in it. But the solution was not perfect. So in his enthusiasm he attacked the problem for 2 decades. He found the solution. It was polar codes. Now what are polar codes? They are the basis of the 5G technology. This is a long article about Erdal Arikan and Huawei. Two stories weaved into an article. Two fascinating stories, give it a read. Sometimes Trump’s tweets are not all there is to a company.
4. So much time has passed in the pandemic that we are finally able to understand the ripple effects of the disaster. For example earlier analysis would talk about the direct impact on the airline industry. but with such a capital intensive industry there had to be a massive domino effect taking over. A affecting B is an oversimplification, always. It is always how A’s impact on B and B’s impact on C creates a domino that affects millions of people the world over. This story is a story of Virgin airlines and how the pandemic impacted millions of people and thousands of companies worldwide. The story also has hidden gems in financial management as to how Virgin negotiated with companies across to bring savings and stay afloat. This is not the story of a breakthrough. But it is the first of many stories that will come out in the next 5 years as we understand the true business impact of the pandemic.
5. In the last few years, before the pandemic the participation of women in the labor force, had actually fallen. In the last 6 years it has fallen from 31% to 23%. So things were not exactly rosy before COVID. But the pandemic has accelerated a process that shouldn’t be taken lightly. Forget gender equality for just a second, it is a pure economic disaster. To put some numbers in perspective, women’s participation in the workforce almost halved. There are some wonderful stories in Bangladesh of how women working in the workforce have driven the economic growth of the country. If you have educated people not working, national economic growth and prosperity suffer for sure. So no matter how many stories you hear of men sharing the household duties, don’t be happy. We have a long way to go in India.
Hope you had fun reading !