[Andrew Spencer]

Hi Hamsi – great question!

Given the cost of living pressures at the moment, rate rises will put an unwelcome strain on household finances. I think that the security provided by a fixed rate could be very important.

I also think it is interesting that in July, Boris Johnson was supposedly considering allowing house buyers to take out 50-year mortgages that they would be able to pass on to their children. These “cross-generational” mortgages could be useful to allow additional borrowing over a longer period. These proposals don’t seem to have been picked up by Lizz Truss or Rishi Sunak, but it will be interesting to see if this reignites the idea given buyers will increasingly struggle to get onto the housing ladder in more expensive areas of the country.

I’d be very interested to hear other thoughts on whether this is a good idea!

[Andrew Spencer]

I think it’s a good question.

This comes as Binance is currently being investigated for potential securities violations in the US, alongside further warnings in South Africa, Thailand and the Cayman Islands that it was not authorised to operate locally.

When Binance started 5 years ago, it appears that there was very little regularly framework in place to affect a decentralised business and little interest in compliance from Binance. However, as the regulatory scrutiny increased we have also seen Binance setting up local offices and local compliance teams to satisfy regulators.

I think that regulators are still catching up with these emerging technologies and the fines will be significantly larger than $3 million for perceived non-compliance with local regulations in the near future.

It will be interesting to see the result of their US investigation!

[Andrew Spencer]

I think it’s interesting because warehousing is at a premium at the moment so this seems like a prudent investment.

However, I’ve seen it reported that despite regular investment in tech, such as developing its latest robots to supplement warehouse workers back in January, the investments are yet to pay off.

In particular, the company has generated a profit just three times in its 22 years of operations!

[Andrew Spencer]

Interesting question!

I think that ESG will remain a buzzword until the regulations tighten and companies are forced to take more responsibility.

Greenwashing remains a risk because of the demand for funds with ‘ESG’ in their name and marketing materials. A genuine substantive policing of ESG claims seems possible but difficult. If, for example, the SEC imposed restrictions on funds labelled ‘ESG’ then it would be a significant extension of its current role.

However, given the SEC recently charged BNY Mellon Investment Adviser Inc. for misstatements and omissions about ESG considerations in making investment decisions for funds, we could see a wave of ESG enforcement actions and increased responsibility for funds. This could reduce Greenwashing and drive improved ESG regulation.

[Andrew Spencer]

Hi Hamsi

One thing that I found interesting about this is Love Island’s decision to dress contestants in second-hand clothes from eBay this year.

BBC News reported that this could spark a change in viewers’ shopping habits, according to fashion experts.

I think that this could be a tipping point for many consumers interested in sustainable clothing, and fashion brands will have to be increasingly wary of their ESG targets!

[Andrew Spencer]

Hi all

Great question and some really interesting points raised so far.

I agree that the cost of living crisis has driven customers to review their existing subscriptions. Yet on the other hand, I saw that customers with an Uber One subscription spend on average almost three times as much as typical user. It seems to me that the new service could form an attractive package, however it will be a big change for Ubers services to become a regular part of customers lives in the same manner as Amazon Prime.

One point I found interesting was Uber’s claims around reducing congestion – which could potentially tempt environmentally conscious consumers.

Overall, after Uber’s share price fell 45% this year a pivot in strategy could be welcome.

[Andrew Spencer]

Interesting question, Hamsi!

I think the issue is that if Meta becomes the preeminent force in the metaverse that is used to access all online services, the idea of little regulation is an alarming proposal.

If I was involved in policy, I would first and foremost focus on discouraging user privacy violations and the potential abuse of data which we have seen is troubling in the current form of the internet. As technology advances, I think that we will risk sharing far greater amounts of data which could potentially be exploited and processed. The issue is that given Meta and Alphabet seem to be quite advanced in their development of a metaverse, it may take policy some time to catch up.

I’d be very interested to hear other thoughts on this!

[Andrew Spencer]

Interesting question! I saw that last month British Lithium produced Lithium Carbonate from granite, marking this first time that this has been done commercially. This method of extraction is considered sustainable, so perhaps a balance can be found with ESG. Moreover, this is apparently the only lithium production facility in the world that will be quarrying and refining on the same site, which is great from an ESG standpoint.

Also, as Lithium Carbonate is a key component of Lithium batteries, and all UK car manufacturing will convert to electric vehicles, I think even less sustainable Lithium production will need to increase to meet targets.

[Andrew Spencer]

My utility bills require taking a keycard and topping it up at a local store before it shuts off without warning. Needless to say that it’s been eye-opening how much faster it runs out at the moment.

I also think that, as noted in the Daily previously, we will see budget supermarkets clawing back market share as consumers try to be more frugal as Hamsi says.

[Andrew Spencer]

Hi Xenia

I think that Nike and Peloton would be a perfect match.

I remember Peter in the subscriber zoom call saying that Peloton’s greatest asset is their community. With Nike’s Run Club app, they have 100 million users. I think a big part of the success involves being able to create leaderboards and join virtual and in-person running events. Additionally, you can send prompts and track your friends’ progress in the app. I think this technology would work perfectly with Peloton’s existing online classes.

I also agree that a deal with gyms would benefit Peloton, especially given the strong return to gyms over the last few months. I think this would be an inexpensive option and Peleton could offer to install equipment for free to boost their profile to regular gym-goers who did not purchase their products during lockdown.

Overall, something is definitely required given Peloton’s struggles even after price reductions.

[Andrew Spencer]

I found this story interesting because a hard block on Visa credit payments appears terrible for both parties. I read that Amazon could lose £1.4 billion, or around 10% of its UK revenues from the move. Importantly, one of Amazon’s biggest draws is convenience, and forcing customers to change their payment methods could also cause them to use unrestricted alternatives like eBay for quick purchases in the short term.

Equally, though, it’s clear that Visa would be losing a significant portion of revenue from the move. Surely it might put it in perspective that reducing their processing fees would be worth it to prevent losing revenue from one of the world’s biggest companies?

Ultimately, I think, as it said in today’s edition, it’s a game of corporate chicken where both companies hope to find a long-term resolution. Unless Amazon demands lower and lower processing fees to the extent that it’s no longer profitable for Visa, I can’t see either company refusing to compromise, given the vast sums at stake. I think it’s also worth noting that Amazon might have hoped the move would drive customers to use their Amazon’s own credit cards, but it seems to have backfired for now, given they caved at the last minute.

[Andrew Spencer]

Hi Xenia,

I think that the convenience of being able to rapidly order essentials and over the counter medications during the pandemic was a huge driver of success for these companies. As a result, post-pandemic it may require a drastic change to consumer habits for people to start making larger orders given the cost required to rapidly deliver products.

That said, I’ve noticed that buying at wholesale and using ‘dark stores’ may allow these companies to make savings compared to traditional stores which could make it viable in the long term.

So, overall I think that a few companies who can crack the right formula to change consumer habits will be able to establish themselves in the long term, but it’ll be interesting to see if people use them for more than forgotten ingredients on a traditional weekly shop etc.

I’d be interested to hear other thoughts on this!

[Andrew Spencer]

Hi all,

This week I’m back with a new question – what’s the best way to navigate: “Why are you interested in working at our company/firm?” or “Why are you interested in this industry?”.

I’ve found this a common way to start an interview, and I’ve always approached it like a story explaining how my interest developed and changed over time. I also think it’s a great place to demonstrate commercial awareness by discussing how sectors you are interested in relate to their business. How do you all approach this question?

[Andrew Spencer]

Hi All, I wondered if you could please help me with a commercial awareness related question. What do you think is the best way to answer: “What does being commercially aware mean?” at an interview?

I think it’s tricky because commercial awareness can be used as a buzzword. I thought a good starting point would be keeping on top of news stories, but I’m interested to hear other thoughts on this.

[Andrew Spencer]

My most bizarre experience was the interviewer holding up various DIY tools and asking me how they worked. Needless to say, my interview preparation did not involve thinking about “how would you describe a wrench to someone who has never seen one before?” but it was an interesting exercise.

The hardest questions I received were:

“You say in your application you have high standards. Doesn’t that mean you will also have unrealistically high expectations of your teammates or become frustrated if you don’t think they are working to the same standards?”

“You mentioned that to manage client expectations it’s best to ‘under-promise and over-deliver’. I hear this a lot, but doesn’t this mean that you are essentially being dishonest to the client about their chances of success? Couldn’t giving a client a negative view of the case prevent them from pursuing a genuine chance of success?”

• This reply was modified 3 years, 4 months ago by Andrew Spencer. Reason: spelling

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