Sunday Snapshots (10/11/20) – Setting the Table, Detecting display defects, and Shopify subscriptions
In which I talk about what hospitality means to me
Hey everyone,
Greetings from Washington, D.C.!
This has been one of those pedal-to-the-metal weeks where regular chores and text messages fall through the crack. At some point, this newsletter will fall through the crack and I will have to eat humble pie. But not today. Today, we are 73 weeks and 73 issues in. As always, whether you have been here since Day 1 or just joined 14 minutes ago, a huge thank you for your attention and spending a few minutes of your week with me.
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In this issue of Snapshots, I want to talk about:
Setting the Table by Danny Meyer and what hospitality means to me
How machine learning can detect broken displays
Shopify’s subscription moves
Album sequencing, movie theaters, and french butter
Book of the week
I’ve read a few amazing books this year. Revolt of the Public. When Breath Becomes Air. Kochland. But this week’s book might be my favorite of the year so far. So much so that I decided to slow down and enjoy the stories in the book instead of rushing towards the finish line of Sunday early afternoon.
This elusive feeling of calm excitement was brought on by Danny Meyer’s Setting The Table. If you live in the United States, you’ve definitely heard of Shake Shack. If you don’t, Shake Shack is a fast casual restaurant chain. Danny Meyer is mind behind that and many other acclaimed restaurants.
What starts as a life story turns into a treatise on hospitality. I’ll discuss the specifics of this later in next week’s longer essay, but this week I wanted to share a personal story about hospitality.
What is hospitality?
For me, there’s no answer, only a feeling that takes me back to the summer of 2017. I was in the small town of Yangshuo in southeastern China studying Mandarin during the week and exploring the neighboring towns during the weekend. I have always been culinary curious – long time Snapshots readers might remember the now defunct Meal of the Week section that cap-ended every issue – but to say that I was ready for this experience would be a gross mischaracterization. It was culinary shock for someone who thought he was immune to it.
Then I found a dumpling shop next to my language school. This literal hole-in-the-wall fed me for the next month and a half. The couple that ran the store spoke a different dialect of Chinese and my Mandarin language skills were still fairly limited. So I communicated using colors – I would ask for the – “lù sè de” (the green ones) – filled with chicken and leeks or the – “huáng sè de” (the yellow ones) – filled with corn. Over the course of month, my meals there became memorable. As my language skills inspired, so did my ability to ask them to fine-tune the dumplings to my taste. Of course, I asked them to ratchet up the spice level. They were definitely impressed.
I talked to them about my parents, my life in the US, what I was studying, what I was reading, etc. They were strangers who were friends for the briefest periods of time. On my last day in Yangshuo, the couple not only didn’t let me pay for my meals, but also packed my dumplings for my travels. They also gave me their spice mix to give to my parents.
Now, I’ve been lucky enough to have some truly delicious meals in the last 3 years, but nothing quite matches the labor of that lovely couple that kept me alive for those two months.
For me, that's hospitality.
Hold tight for a more business-as-usual and a less personal essay about my takeaways from this amazing book next week. In the mean time, definitely grab a copy of the book.
Long read of the week
Smart-Inspect: Micro Scale Localization and Classification of Smartphone Glass Defects for Industrial Automation by M Usman Maqbool Bhutta, Shoaib Aslam, Peng Yun, Jianhao Jiao, Ming Liu
A boring-yet-important improvement in the classification of display defects means that fewer people will get phones with damaged displays. The key component here seems to be the use of multiple algorithms at different stages of the inspection process. These algorithms are coded around the idea of Residual Neural Networks – these mirror the brain in that they are able to “skip” levels of processing.
This is the type of stuff that I love – behind-the-scenes technological innovation that is sure to go mainstream in a very important part of daily life but is a few degrees away from the core experience. Very cool.
Business move of the week
Shopify announced a subscription API this week. This was something that was conspicuously missing from a company that otherwise stays pretty close to its fellow Canadian Drake’s vision of “all hits, no misses.”
This announcement from Carmen Spitz, their PM of Subscription, lays out the case for merchants pretty well. But what does the case for Shopify look like?
Let’s go back to my Financing the rebels essay from earlier in the year:
Shopify’s business model means that they are going to have wins (businesses on the platform that become successful) and losses (ones that doesn’t end up surviving). They don’t need to care about any specific business, they just need to win in aggregate.
If you take a quick look at Shopify’s financials, this becomes more clear. They have two sources of revenue – subscription solutions and payment processing. Although payments account for a higher percentage of revenue, they also cost more. In fact, they are so costly that subscriptions actually make up a much larger percent of profits than payments.
So, it makes financial sense for Shopify to encourage many people to join and pay the subscription fee even if the payments part doesn’t work out completely. Again, the goal is to win in aggregate.
Seen through this dual framework of subscriptions and payments, this move makes more sense. More subscription products build on Shopify = more recurring payment flow for them (higher revenues) and more merchants willing to pay for a Shopify subscription (higher profits).
Couple of questions I have:
How does this affect current 3rd-party subscription apps on the Shopify app marketplace? Were they given a heads up?
Is there a lower take rate for Shopify on subscriptions vs. individual purchases because subscription revenue is recurring?
Similar questions have been asked of Apple lately and I think it’s only fair that we hold all our platforms accountable – even ones on the rebel side.
Odds and ends of the week
A delicious content sandwich for you this week: 2 videos with an article in the middle.
🔉 The Lost Art of Album Sequencing by Nathan Zed: When was the last time you listened to an album all the way through? Music consumption today is much more driven by playlists and algorithms. That leads to downstream incentives
🎥 Spoiler: Movie Theaters Are Dying Because They Mostly Suck by M.G. Siegler: Over the course of researching for an upcoming long essay, I’ve been looking into how the movie business works. A critical part of this value chain are movie theaters. This essay outlines why they suck.
🧈 How Traditional French Butter Is Made: Sorry for tempering your Sunday Scaries with a mouth watering video about traditional french butter, but I had to share this. If only I had a nickel for every time I said, “Surely no one cares that much about [anything].”
That wraps up this week’s newsletter. You can check out the previous issues here.
If you want to discuss any of the ideas mentioned above or have any books/papers/links you think would be interesting to share on a future edition of Sunday Snapshots, please reach out to me by replying to this email or sending me a direct message on Twitter at @sidharthajha.
Until next Sunday,
Sid