[VIC – 106] AHS – Amazon Health Services 😷 . Avoiding exploitation in the sharing economy. To understand > to reply. Hostess with the mostest 🍩 .

Business & Money

A few days ago there was an announcement that Amazon, Berkshire Hathaway, and JPMorgan Chase are creating a joint healthcare venture. The press release is pretty vague, but intriguing nonetheless.

To start, let’s look at AWS to get an idea of how the Amazon model works. As Amazon was scaling in the mid-2000s, it decided to build an easy-to-use interface that developers across the company could use to spin up cloud servers, build applications, and access the necessary compute and storage resources as-a-service. And once this system got to scale internally, it offered the whole thing as-a-service to external developers. So now anyone in the world can leverage the front end that Amazon has built (aws.amazon.com), leverage all of the back-end technology (servers, data centers, etc) to deploy whatever app they’re working on far faster and far cheaper than would otherwise be possible.

It’s the same story with e-commerce. Want to sell something? Leverage the interface at Amazon.com and all of the back end tech (fulfillment centers, logistics networks, etc) to be up and running in no time.

So I imagine this will be the plan for healthcare. Build a front-end interface for Amazon employees (and those at Berkshire and JPMorgan) to easily access insurance information, pharmacy benefit managers, pharmacies, and any other players in the ecosystem, while also building the back-end infrastructure to make the whole thing possible. And once they have that figured out, of course, open the floodgates by offering that same interface+infrastructure to other employers and maybe even individuals at some distant point in the future.

The really interesting thing to me is that, while this is all playing out, all of the healthcare suppliers (insurers, pharmacies, etc) will likely be modularized in the process. If Amazon becomes the front end, then it won’t matter to the consumer what insurance company is behind the scenes paying the bills or what pharmacy fills a prescription. And I think it’s this idea that explains why healthcare stocks across the board sold off when the announcement hit the wire. The writing is on the wall.

Now if this hypothetical scenario does play out, it would do so over a very long period of time. Maybe 10, 20, or even 30 years. So the short-term selloff is likely a bit of an overreaction in the immediate term. I imagine short-term traders are taking advantage as we speak.

But speaking of how long this will take, I think that explains why the aforementioned companies are partnering on this initiative. Nothing I’ve mentioned to this point requires anything from Berkshire or JPMorgan. The strategy, approach, and time horizon is purely and quintessentially Amazonian.

However, Berkshire brings something interesting and unique to the table. While they do not play in healthcare insurance directly, they are one of the largest reinsurers in the game. That is, they provide insurance for the health insurance companies. So they wouldn’t be at risk of being modularized by this new platform, but would instead provide a vital piece to the puzzle.

And finally, we have JPMorgan. What are they doing here? Well, one of the lines from the press release says that the new venture will be “free from profit-making incentives and constraints.” First off, I think it’s highly unlikely that these guys are building a non-profit (if you disagree, I’d love to hear your perspective). Instead, I think that sentence reflects the long-term perspective of the partnership. This won’t be a money-making endeavor anytime soon. If they can be successful with this, and that’s a massive IF, this will take many many years and many many dollars to unfold. And as such, access to capital markets and financing will be a critical component to the long-term strategy. And who better than JPMorgan to fill that role.

Human Progress

The sharing economy fascinates me. It’s incredible how, over a very short span of time, entrepreneurs across the globe have identified ways to better utilize and monetize existing resources.

On the employment front, this brings many new and exciting opportunities to the table. Workers have a new found flexibility to define the nature of work for themselves. Individuals that may have otherwise had limited opportunities can now easily become market participants. And sharing economy platforms generally have the ability to scale in a way that traditional businesses cannot (low fixed costs, network effects, etc). As such, the net benefit to job creation can be massive.

That said, the moral and ethical implications are also significant. There is a chance that workers become completely commoditized by these platforms. When you think of a company like Uber, it’s hard not to think about the low bargaining power of drivers which leads to serious exploitation. We’ve all read about how drivers can be penalized for shutting off the app, the gamification elements that lead to long hours, and how long it took to get tipping implemented. And given that sharing economy laborers are often contractors (as opposed to employees), their ability to collectively bargains is basically non-existent.

So how can we ensure that we benefit from this incredible new business model, without allowing the negative externalities to run amuck?

To start, I think it’s important to think about how the reputation systems are employed. All sharing economy platforms use them, but all are not created equal. For example, let’s look at Airbnb. If you’re a host with great reviews, your listing gets prioritized in search results and you have the opportunity to make more money. So the platform leverages the system to create more economic opportunity for participants. Uber, on the other hand, leverages their reputation system to remove bad actors. I can’t find any evidence that higher rated drivers are more likely to get more fares. Instead, as long as your reputation is high enough to remain on the platform, you are matched based on location and pick-up times. What if riders could see these rating ahead of time and select drivers based on them? That small change might provide more incentive for safe driving and better reward the top drivers on the platform with more fares and more money.

Another thing to consider is whether these platforms encourage repeat transactions between the same buyer and seller. For example, when I was running DogsterApp, I used LawTrades as my platform for legal services. It matches you with qualified lawyers based on what services you need. And when you find the right lawyer, you can basically pay a flat monthly fee for a block of that specific lawyer’s time. It’s like a dedicated and on-demand general counsel. And over time, I can build a relationship with a specific person based multiple interactions and trust. I think this encouragement of repeat transactions between the same people empowers suppliers (the lawyers in this case) to build reputation, a loyal customer base, and again, increases their earning potential. Contrast that with platforms like TaskRabbit where you are just matched with a different random person each time you use the platform. The latter leads to commoditization of labor and exploitation, just like the Uber drivers.

Finally, I think the ability to set the price has a lot to do with the quality of the experience for workers on these platforms. For example, you can use a platform like Thumbtack to secure local services like house cleaning or carpentry, and the workers have the ability to offer their services at whatever price they decide. That type of flexibility allows greater freedom and agency for suppliers, while not allowing the platform to control their earning potential.

These are just a few things to consider, but perhaps we need some form of regulatory checklist by which to evaluate the merits of these platforms and determine if they will produce a net benefit to society.


For the longest time, when other people would speak, I would always listen with the intention of replying. As I took words in, I was simultaneously figuring out what I was going to say next in response. And it makes logical sense. A conversation is an interchange between two people wherein they take turns speaking.

And in sales, it seemed to make even more sense than in normal conversation. When an existing or potential customer speaks, it’s often about why their current situation is working and why they don’t need any help. It’s about how they made an investment with a competitor and their needs are being met. So logically it was my job to find cracks in the story, respond with how our feature set was superior, or elicit fear, which might encourage them to make a change.

But at some point, in both work settings and my personal life, I made a change. I stopped listening with the intention to reply, but rather listening with the intention to understand. I mean really understand.

And funny things happen when you make that change.

First, the pace of conversations tends to slow down. There are often pauses after the other person stops speaking. And I think that’s a good thing. It makes conversations more thoughtful, deliberate, and insightful. (But the silence does take some getting used to.)

Second, I found that my replies, more often than not, would be another question, rather than an answer or statement of fact. Because in reality, only so much can be said with a couple sentences. Word choice matters. Tone of voice matters. Body language matters. And when you really listen and make a genuine attempt at understanding, you start to get curious about why a person uses one words versus another. You start to get curious about what underlying emotions and drives might be coloring the conversation. And everything in life really comes down memories and motives. To past experiences and future desires. The more you can understand those things, it seems the better you can influence or motivate a desired action.

And finally, you end up with deeper and higher quality relationships, whether business or personal. And things basically boil down to relationships, so this seems to be a good outcome.

My Latest Discovery

Last week I touched on the fact that many companies have been giving out these one-off bonuses in response to tax reform. And every example that I had seen to that point was basically the same. Here’s a $1,000 bonus check, spend it wisely!

But this week, I stumbled upon a press release from Hostess.

“Hostess Brands, Inc. today announced that, following the recently enacted tax legislation, the snack cake maker will be providing bonuses totaling $1,250 to its 1,036 hourly bakery and corporate employees. The bonuses will include $750 in cash and a $500 401k contribution.”

I love the 401k contribution angle. Think about it. For hourly workers in retail or manufacturing, there’s a fairly high likelihood that they might not be the most highly educated employee base. And as such, a $1,250 cash infusion might fly out of their checking accounts just as quickly as it arrived.

This is a great example of long-term thinking from the executive team at Hostess and real investment in its people. Good Stuff Hostess! (That doesn’t mean I’ll be eating any of their manufactured poison anytime soon)

[VIC – 102] Offshore war chests. Moore vs Eroom. Original thinking. When to scroll.

Business & Money

There’s been a lot of talk lately about how much money US companies have parked in offshore accounts. This is especially apparent in tech with Apple holding something like $250 billion offshore, Microsoft holding $100B, and Oracle, Cisco, and Alphabet all sitting on around $50B.
But how can you blame them? I’d leave my money sitting there as well if 35% of it immediately evaporates upon repatriation. You might even make the argument that it’s irresponsible to bring it home. Perhaps even against the fiduciary duty of the executive team.
That’s especially the case when you think about ridiculously low interest rates. It’s cheaper to borrow money at home and leave the cash parked where it is.
The downside, though, of these companies leaving the cash abroad is that they are incentivized to invest abroad rather than at home. They’re building new factories and creating jobs in other jurisdictions. Maybe those investments wouldn’t really be enough to move the needle, but you’d likely get share buybacks or dividends at the very least.
In any case, here we are in the present moment. I imagine these companies have continued to build these war chests to force the hand of regulators to make a change. And it looks like it’s working.

Human Progress

I’ve written about Moore’s Law here on VIC many times. The fundamental idea is that technology gets exponentially better over time, while the costs get cheaper.
For all intents and purposes, it’s a truism that applies across most markets and industries. But the one painfully obvious exception is healthcare. In fact, it’s so untrue in healthcare, people have coined the term Eroom’s Law (Moore’s backward) to capture the idea that drug discovery actually gets more expensive over time, despite our improving technological capabilities.
So I’ve been thinking about this over the past few weeks and decided it was worth writing about.
The first thing I set out to understand is why drug discovery is so expensive. And the simple answer I landed on is that it’s so damn hard and involves a ton of different stakeholders.
First scientists or companies need to hypothesize about what might be a good point for disease intervention. Then, tons of tests and experiments hopefully lead to some fundamental discovery (which takes a lot of time and $).
Then you need to test/prove that the drug is safe and effective via multiple stages of clinical trials (a lot more time and $).
Then you need to convince people to use by dealing with regulators and educating providers and healthcare systems (time + $).
And finally, you need an effective go-to-market strategy that gets it into patients hands.
All of that takes about $2.5 billion dollars and 10-15 years on average to for a new FDA approved drug (not to mention all of the drugs that fail along the way).
So that entire process is really long and messy, and probably too much to tackle for one post, but I do want to go back to that first step about making the discovery. And I want to do that because I believe we’re at a really interesting inflection point (take a look at biotech stock charts over the last few years).
To really innovate in healthcare via making a new discovery, there seem to be a few key steps.
1. You need to determine what outcome are you trying to achieve.
If we think about Sickle Cell Anemia, you want to eliminate the extreme pain that results from the disease, and the subsequent impact on patients’ lives, their families, and the economic impact on our healthcare system.
2. You need to have a pretty good understanding of the underlying disease biology that will enable you to achieve the desired outcome.
Following the same example, we know that patients’ have an error in their hemoglobin gene that causes red blood cells to fold or sickle.
3. You need to know, with a lot of specificity, what you’re going to target to get that outcome.
Here, the best way to address the disease is to repair/replace faulty hemoglobin.
4. You have to be confident that you can make a medicine to hit that target effectively.
We know that gene therapy has a pretty high probability of being able to repair the cells in question and a lot of people are working on that problem.
If you think about Alzheimers, in contrast to Sickle Cell Anemia, it’s a very different picture.
Following the same process, we don’t know the desired outcome. Can we reverse the effects? Should we just aim to halt progression? Or maybe just improve memory recall?
We don’t understand (very well at least) the underlying biology. Is it the plaques in the brain or neural tangles that we should focus on, or are those only symptoms of a larger problem?
And because we don’t understand the biology, we have no idea what to target.
And as a result, most of the recent attempts to discover new treatments have been failures, sometimes in late-stage clinical trials.
So why are we at an inflection point?
First off, we’re doing biology at a speed and scale that is unprecedented. For example, think about what Illumina has done in genomics by making it possible to sequence a genome faster, better, and way cheaper than was previously possible.
Secondly, we can now understand things at a single cell resolution. Scientists at the Broad Institute of MIT and Harvard have created an atlas of various cell types which greatly improves our ability to understand biology with increased granularity.
And thirdly, all of this generates a ton data that’s far too complex for the human mind. But lucky for us, AI and machine learning have reached a point where these tools can aid us in deriving real insights from the data.
I hope all of this can help rid of us of dyslexia and return to Mr. Moore.


A while back I read Zen and The Art of Motorcycle Maintenance. At one point the main character is teaching a rhetoric student suffering from writer’s block. He instructs her to write about her home town and she cannot think of anything to write. He then changes the assignment and tells her to write about the front of an opera house on a specific street in a specific part of that town. He tells her to start writing about the uppermost brick on the right side of the facade. The student begins to write and unleashes a torrent of creativity. The next day she shows up to close with 20 inspired pages of beautiful prose.
Similarly, in The Art of Learning, the author writes about making smaller circles. That is, when trying to master something it’s necessary to simplify practice into the smallest actions. Master the simple techniques. Depth over breadth. He talks about how winning championships is accomplished by complete mastery of fundamentals, as supposed to varied or sophisticated forms.
In The River of Consciousness, there’s an essay about Hellen Keller and her run-in with plagiarism. But the person whom she’s accused of copying doesn’t get angry. She wrote to Keller saying that everything in creative endeavors comes from other sources of inspiration.
I point these example about because I’m thinking about a specific question. Is there really such a thing as original thought? I’m not sure there is. I’m not sure there should be so much cultural stigma tied to plagiarism. Of course, you can’t just copy someone else’s work and submit it as your own, but digesting the ideas of others, then combining them with yet more ideas and some of your own, is really the only way to create anything.
Perhaps this is yet another reason I write here each week. None of the ideas here are entirely new. They are derivations and imitations of things I’ve read, listened to, and experienced. After consuming things in various forms, I spend some time thinking things through and mulling them over, then through the writing process, attempt to reorganize, combine, and pull things apart until I form something unique and personally refreshing.

My Latest Discovery

A few weeks ago I made a small change that has been very refreshing.
When you read an article or piece of content on your phone or computer screen, do you constantly scroll as you go, or only scroll when you get to the bottom? I had always done the former, scrolling little by little after every few sentences. I’m not sure why.
But now I do the opposite. I read everything that’s on the screen, then scroll to reveal the next section.
It’s a small change, but helps me feel more relaxed and less anxious as I read.
With social media and so much content at our fingertips, our digital overlords are trying their best to cultivate a degree of ADD in all of us. So I think small changes like these can go a long way.

[VIC – 70] Disagree and commit. Visit to the doctor. Sugar coating. Sea salt caramel.

Business & Money

I’m working on a big deal at work. The kind of deal that, if it closes, could knock out 50-75% of your annual revenue target in one fell swoop. Us sales people call this type of deal a “whale.” Whenever whales present themselves, my best practice is to loop in my leadership team so it becomes a team effort. As such, I sent an email to our executives asking for thoughts and feedback about my approach. To my dismay, the response I got was that the deal was unlikely to close and the prospective customer likely wasn’t serious about wanting to work with us. At the same time, they offered any support and/or resources I needed to try to close the business. They basically said “we’re doubtful that this will close, but we we’ll support you in any and every way.”
For a while I was a little disheartened by the seemingly cold response. After thinking about it more though, I think there’s a huge leadership lesson hidden below the surface. It didn’t make itself truly apparent to me until I read Jeff Bezos’ annual letter to shareholders yesterday. Here’s an excerpt:

“Disagree and commit.” It’s so powerful! In a simple three word phrase, he is acknowledging his disagreement, but simultaneously letting his team know that they have his full confidence and support.
It’s the same thing I got from my leadership team. They weren’t quite as excited as I was about the opportunity at hand, but also have enough trust and confidence in my ability to give me freedom and support for whatever deals I choose to pursue.

Human Progress

I went to the doctor’s office this week for the first time in a long time. When I arrived they asked for my insurance card. I had previously taken a picture and uploaded it to ZocDoc, which then aided me in finding a doctor and booking the appointment. My assumption was that my insurance information would then be shared with the doctor’s office. Wrong! Luckily I have the picture saved on my phone so it wasn’t an issue. Why is that, in the era of the internet and instant digital information sharing, insurance info can’t be sent quickly and securely between relevant parties?
Once I made it to the examination room, I was asked the same 1000 questions that we’re always asked at doctors offices. Any allergies to medications? Family history? Bla bla bla. Can’t the answers to all of these rote questions be stored in some central repository on AWS that’s easily accessible by certified medical professionals?
When I was leaving, I asked how I would receive my results? “The doctor will call you in about a week.” Send be an email for Pete’s sake! If the companies in this space won’t centralize all of my data (or perhaps can’t, due to regulatory red tape), at least give it to me in a digital format so I can do it myself!
You all know that I’m a techno-optimist, but sometimes I wonder whether the healthcare industry will ever catch up to every other vertical.


A few weeks ago I had a slice of pie from the local grocery store. It was incredible. The crust was baked to the perfect crispiness and it had sugar sprinkled on top.
This got my thinking about sugar coating in more general terms. In most cases that I can think of, sugar coating is a great thing. Take a delicious food item, sprinkle some sugar on top, and it generally gets better. There is, of course, one downside. Whatever you’re eating automatically becomes worse for you due to the added sugar. Moreover, if you think about most of the food items that have sugar sprinkled on top, most already offer exorbitant amounts of sugar in the first place. So it’s really just insult to injury.
I think this idea also applies to sugar coating in the less literal sense. That is, using indirect or gentle language to deliver a difficult or stern message. Sugar coating the message will make it easier to swallow for the recipient, but this isn’t necessarily a good thing. There are times, when dealing with children or overly sensitive people for example, when it’s necessary to soften the blow. But in general, I’m a fan of being direct and blunt. It might sting a bit in the moment, but I find that people come to appreciate honest and forthright feedback. You actually build more trust and value into your relationships.
Best to leave the sugar coating for yummy snacks and desserts.

My Latest Discovery

This stuff is incredible!!! Go try it immediately!

Hasta la vista baby!


[VIC – Issue 66] Frequent & big problems. Republicans vs Merriam-Webster. Say hello to the undercover plumber. Grammarly is dope!

Business & Money

In thinking about what side project to work on next, I’m trying to decide what problem to tackle. That is, every business needs to solve a problem. Customer’s don’t even need to realize they have a problem. Think about Nike. Customers already had a lot of alternatives when Nike came on the scene. But they didn’t realize that wearing a certain brand of sneaker could make you cool while playing a sport, could fill an aspirational void, and perhaps even increase your odds of becoming a superstar. They created a market out of thin air.
But back to the point. We can agree that every business needs to solve a problem. That said, not all problems are created equal. In general, I’d say there are 4 different categories. I’ll bring out the top-notch drawing skills to represent these:

I’ve created two axes here:
The Y-axis represents size. Some problems are big and some problems are small. Searching to buy your first house is a massive problem. Conversely, buying tooth pics at the grocery, not so big.
The X-axis represents frequency. Some problems need solving all the time and others are more rare. I like to talk to my friends on a daily basis. I haven’t purchased a personal computer in almost a decade.
If you plot all problems on this plane, they fall within one of four categories. I’ll list them in ascending order from the perspective of which seem to make for good businesses.
1) Infrequent and small. Every now and then there is a water main break in NYC which causes the water to come out brown from the faucet. Thus I’m forced to head to the deli to buy bottled water or even shower at a friends place if the problem persists. This problem, however, is so rare and so small (at least in developed cities) that it would not make any sense to start a company centered around on-demand water bottles or mobile showers. This quadrant is the graveyard and I’d say most should steer clear.
2) Infrequent and big. Perhaps once ever 3-8 years you need to buy a new car (ride-sharing aside). An extremely expensive purchase that takes a considerable amount of time. This category, while good businesses can definitely be built, tend to be hard and capital intensive. Not only are the products themselves very complex, but the customer journey is itself complex. With cars, you are researching online, asking friends, taking test drives, etc. Marketing budgets need to be substantial since you need to stay top of mind in between purchase decisions. You also need to charge customers a lot of money to cover the cost of building the product and acquiring customers. All in all, this category, while better than the first, is still rather hard for startups.
3) Frequent & small. I like to read news about technology and business on a daily basis. It’s incredibly easy to acquire this information from a plethora of email newsletters, websites, blogs, apps etc. If you can build a compelling product in this quadrant, which inevitably becomes a habit, you’ve hit gold, though these can sometimes be fleeting such as mobile games or apps.
4) Frequent & big. You have to talk about Apple here. People will purchase a new iPhone whenever it comes out. And these things are not cheap. You simply NEED to have the best phone whenever it becomes available. Not many companies are lucky enough to hit the sweet spot, but when they do, you get lasting, defensible, cash-rich juggernauts.

Human Progress

I’m pretty sure progress by definition connotes moving forward or in a positive direction. So whether or not you like the Affordable Care Act aka Obamacare (some apparently don’t know these are synonyms for the same thing), it’s an objective statement to say that millions of Americans were able to obtain coverage that was previously outside their means. Seems safe to say that this qualifies as a move in the right direction. How we fund that or how this is implemented is surely up for debate, but we’ll leave that for another day.
The plan now being proposed is trying to completely dismantle the AAA and regress to a time when millions of Americans couldn’t afford healthcare. This seems like a clear step backward. And what happens when people can’t afford healthcare? They don’t seek out preventive care (which is far more effective) and show up in hospitals with incredibly severe conditions that are for more difficult and expensive to treat.
Don’t get me wrong, our healthcare system is in serious need of reform. I’m not sure it should be a mandate that everyone should be forced to obtain coverage (though I don’t see a downside).
Technology and digital health records should pay a much larger role. But hastily throwing away legislation without a legitimate alternative does not seem to fit the definition of progress. And last time I checked, political affiliation has no power over Merriam-Webster.


Every day around 3 pm I have to see a man about a horse (that’s the ridiculous phrase my grandfather used for heading to the bathroom for a #2). This past Wednesday was no different. As I made my way to the bathroom and inside the stall, I came upon an unsettling discovery. The toilet was clogged.😩😩 Luckily it wasn’t one of the gross ones, but instead looked as if someone was on a personal mission to sabotage future visitors by simply unraveling the entire roll of toilet paper into the toilet for no reason at all.
I promptly pumped the breaks, turned around, and made my way into the other stall. All good to go in this one. Then I saw a small plunger inconspicuously sitting in the corner of the stall. I stood staring at it for a few moments not sure what to do. I didn’t clog the other toilet so why should I go out of my way to fix it? Especially when there’s a perfectly functioning one right in front of me. I stood there contemplating for what seemed like ages, but more realistically was probably 10 seconds. I had to make a decision quick. The last thing I wanted was for someone to walk in while I was busy plunging the toilet, which would, of course, give off the impression that I was the guilty party. And you can’t say “I didn’t clog this toilet. I’m just being a good samaritan by clearing it for the next person.” Yea right! 😂😂 That’s totally believable.
So I quickly grabbed the plunger, went back to the original stall and had the thing cleared in about 10 seconds. Easy peasy!
If I had to put a figure on it, I’d say that probably 5% of people would do what I did. Maybe less. In any case, the point here isn’t to seek out a thank you or an acknowledgment for my services, but instead, bring to light the idea itself. Human beings are inherently selfish creatures. Our own affairs are all consuming, especially when being considerate of others will go unnoticed. This is not a good thing. We need more undercover plumbers walking around if we want to collectively flourish!

My Latest Discovery

I approach this newsletter as a rather informal communication channel. As a result, grammatical errors, typos, and other miscues are all too common. And I’m honestly not so concerned about it.
That said, Grammarly has been a godsend. You know the spellcheck functionality within Microsoft Word, Grammarly is basically spell check embedded within your browser. It calls out mistakes in the same way Word does while you write emails, blog posts or comments on social networks. If you head to the Grammarly site and log in, there’s even a browser based document editor. Now that I think about it, I can’t believe that it took until 2017 for cloud-based word processors. It’s still the norm to purchase software licenses from Microsoft and download a local version to your computer. Bananas!! 🍌🍌

Shout out to my loving grandmother for always pointing out my mistakes! 😍


It’s a Wrap! ✌️ & ❤️️ in the upcoming week!