Juan Torres

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On March 6, 2019, Juan Torres commented on Bye-Bye Britannica, Hey Siri :

Maren,

Thank you very much for a very insightful (and nostalgia-inducing) post! When I graduated from elementary school, my Mom gave me a choice between a PC or an Encyclopedia Britannica. Of course, I chose the books 🙂 (which I still have).

One of the most salient points from your post comes from the dates of the conflict between Britannica and Encarta. Even when Britannica recognized the threat and took action (in 1994, five years before the dot-com bubble!) it was too late for them to prevent encroachment by Encarta. This feels like one of the shortest windows for a coordinated response that I can recall before the advent of the Internet.

The other main takeaway for me is the importance of Wikipedia as a knowledge resource and its fragility as a non-profit company. As you mentioned, Wikipedia is the 5th most popular website in the world, but it is the only non-commercial site in the top 10 and only one of two (along with AmpProject) in the top 50. The high costs of servers needed to handle this traffic and to maintain the database emphasize the importance of the donations that Wikipedia receives, and I would hope that the value that they create for search engines would drive these companies to support Wikipedia further.

Reference

[1] “Top 10 Most Popular Websites for 2017”, Webhostface, 30Oct17, https://www.webhostface.com/blog/top-10-most-popular-websites-for-2017/, accessed March 2019.

Alex,

Thanks for a very insightful post! In addition to the mechanisms that you described (and their positive impact on resilience and green energy use), I am also fascinated by the impact that IoT and more powerful climate processors are having on commercial building climate controls. For example, one of my friends is working for a startup that is installing weather sensors throughout New York City lampposts to modify building temperature controls (on a room by room basis, in lieu of a central or floor control) based on outside temperature and sunlight. As you said, I feel that this space has great potential to impact companies by both greatly reducing their costs (providing an economic incentive) and by consuming less conventional energy (providing environmental and PR benefits).

On March 6, 2019, Juan Torres commented on Sleep on It: How Casper *Flipped* the Mattress Industry :

Gina,

Thank you very much for a wonderful post! I think that the other significant losers after the entrant of online mattress companies have been the retail outlets themselves (e.g., the Mattress Firm, Sleepy’s, etc.). The high margins that you described led to a proliferation of physical stores. A 2016 estimate placed the number of mattress stores in the US at around 9,200 stores (for comparison, Starbucks had approximately 12,700 U.S. outlets at the time). Following a wave of significant consolidation early this decade, a considerable portion of those stores was owned by Mattress Firm (which was acquired by Steinhoff International Holdings). The agglomeration effect that had occurred when competing chains were first established ended with Mattress Firms owning a lot of stores in close physical proximity to each other (When I lived in Norfolk, there were 4 Mattress Firm-owned stores within two miles of each other)

The successful entry of online competitors and its simplified customer shopping proposition has placed enormous pressure on physical outlets. This pressure, combined with allegations of fraud at Steinhoff in late 2017, resulted in an announcement by Mattress Firm last year that it will close up to 700 of its stores in the near future.

References

[1] Dubner, Stephen, “Are We in a Mattress-Store Bubble? (Ep. 251)”, Freakonomics, 08Jun16, http://freakonomics.com/podcast/mattress-store-bubble/, accessed March 2019.

On March 6, 2019, Juan Torres commented on Hi, my name is C-3PO. How can I assist you today? :

Marissa,

Thank you very much for a deep and insightful post about this nascent industry. This technological transition and its implications for customer service and labor remind me of the transformation that AT&T (as the monopolistic provider of telephone services in the United States at the time) executed when it implemented dial machines in the 1930s.

Then, as now, the expected growth in demand for communication services was expected to grow at a much faster rate than the available labor pool (at that time, for telephone operators. Additionally, the increased number of customers and possible connections made the operator’s task increasingly complicated, while automated dial machines could complete a connection in a relatively constant time regardless of the number of telephones in the network. Fears that a lack of an operator would result in a degraded customer experience were supplanted by the realization that connections were much faster and reliable. I feel that fears that a chatbot or voice assistant cannot deliver a satisfactory experience will recede as the technology improves.

I also think that we can draw some lessons for the shifts in labor that this automation created. In the first ten years after implementing dial machines, AT&T lost approximately 70,000 jobs (mostly suffered by the younger, single women that AT&T employed as operators), while the majority of the ~20,000 jobs created for installation and maintenance of the dial machines went to engineers and electrical technicians. I expect similar shifts when virtual assistants start to become more prevalent.

References

[1] Gross, Daniel, and William Kerr, “AT&T: Managing Technological Change and the Future of Telephone Operators in the 20th Century,” Harvard Business School Case No. 718-486. Boston: Harvard Business School Publishing.

On February 24, 2019, Juan Torres commented on Via: a platform revolutionising transportation :

Alex,

Thank you very much for sharing this innovative platform! I agree with Li (as we saw in the Fasten case) that building awareness vis-a-vis Uber/Lyft and building a dedicated user base of riders and drivers will be the greatest challenge for Via moving forward. I wonder if the company can leverage its strengths in three aspects of its operations:
1) By emphasizing the reduced carbon footprint aspect, especially in cities where Uber/Lyft significantly contribute to traffic congestions and where the population is environmentally conscious (i.e., the major cities of the Northeast and the West Coast).
2) By leveraging its government partnerships. For example, in both Cambridge and Boston (because of schools being assigned by lottery rather than by geographic location) there is a significant portion of public school students who are transported by independent contractors operating vans; Via could provide a centralized alternative to these contractors.
3) Most importantly, by stressing the fact that Via provides the vehicles for operation. Greg Buchak from UChicago showed that the entry of Uber and Lyft into low-income zip codes significantly increases auto sales and auto loans in the area, as potential drivers race to acquire vehicles for operation on the platforms, which creates debt for those drivers. By having the company finance the cars, the drivers have much less risk.

Reference
[1] Buchak, Greg, “Financing the Gig Economy,” University of Chicago Booth School of Business and Department of Economics, December 2018.

On February 24, 2019, Juan Torres commented on EdX: The Path to Learn for Career :

Ge,

Thanks for the post! As a person who has completed courses both on EdX and Coursera, I was shocked when you stated that EdX’s primary source of revenue is from fees to partnering universities, which on a -per-course basis are quite significant! I would be curious to see if the fees act as a deterrent for smaller universities from offering similar courses to those offered by more renowned institutions, or if those universities can get value from their EdX courses as a screening mechanism for full-time students as you stated in your post.

Coursera’s courses used to be significantly more expensive than EdX’s certificates (around $300 per course), which I am sure yields higher course completion rates per participant, but which deterred me from “exploratory” courses (the course that I completed there was an Intro to Finance prior to HBS). I would say that my WTP for these MOOC offerings is higher than what EdX charges (which allows students to audit any courses for free, and where the only expensive offerings are the MicroMasters) but much lower than Coursera’s (which has shifted to a subscription model, with most courses between $40-$80 USD a month). Coursera also has an audit feature, but it provides much more limited functionality than EdX’s.

Reference

https://www.class-central.com/help/how-much-coursera-cost

On February 24, 2019, Juan Torres commented on EdX: The Path to Learn for Career :

Ge,

Thanks for the post! As a person who has completed courses both on EdX and Coursera, I was shocked when you stated that EdX’s primary source of revenue is from fees to partnering universities, which on a -per-course basis are quite significant! I would be curious to see if the fees act as a deterrent for smaller universities from offering similar courses to those offered by more renowned institutions, or if those universities can get value from their EdX courses as a screening mechanism for full-time students as you stated in your post.

Coursera’s courses used to be significantly more expensive than EdX’s certificates (around $300 per course), which I am sure yields higher course completion rates per participant, but which deterred me from “exploratory” courses (the course that I completed there was an Intro to Finance prior to HBS). I would say that my WTP for these MOOC offerings is higher than what EdX charges (which allows students to audit any courses for free, and where the only expensive offerings are the MicroMasters) but much lower than Coursera’s (which has shifted to a subscription model, with most courses between $40-$80 USD a month). Coursera also has an audit feature, but it provides much more limited functionality than EdX’s.

On February 24, 2019, Juan Torres commented on VIPKid – “Ubernization” in EdTech :

Li,

Thank you very much for sharing! I have a couple of friends who are tutors in VIPKid, and they both are passionate about their experiences interacting with Chinese children, as well as for the flexibility of VIPKid system and the user-friendly interface that manages their interactions.

During my time living in Japan, several of my military spouse friends also worked in similar ventures, with the difference that their interactions were coordinated to be in-person, and were between 40-45 USD an hour. Even with these high prices, the demand for native-speaker instruction was very high. I was thus not surprised to see the announcement in August of 2018 that VIPKid was expanding its services to Korea and Japan, which are countries with much higher median income than China.

While I agree that Babbel, Duolingo, and similar services could make language education a lot more accessible and affordable, I still think that there will always be value to face-to-face instruction – especially for aspects which require practice and imitation such as pronunciation. I am thus not as worried about the (immediate) future of VIPKid.

Reference
https://www.businesswire.com/news/home/20180802005606/en/VIPKid-Announces-Expansion-Curricula-Product-Lines-Overseas