Profitless to Profipoly: A CEO-CMO Dialogue on Marketing’s New Direction (Part 1)

Dialogue

At a recent meeting with a senior leader at a large conglomerate, I shared my concerns about AdWaste – the biggest profits killer in digital business. I pointed out how CMOs are failing to address this issue, while CEOs often accept marketing spending as an inevitable cost of growth, without scrutinising the actual numbers. After hearing my thoughts, the leader suggested I meet with the CEO and CMO of their eCommerce business to discuss the problem in detail.

Reflecting on how such a conversation might unfold, I was reminded of a book I read years ago: “Adam Smith Goes to Moscow: A Dialogue on Radical Reform”. It explores the ideological clash between capitalism and communism during the Cold War era. The book “is a captivating dialogue between the head of a hypothetical, formerly socialist East European country and a fervently market-minded American adviser. Their spirited give-and-take highlights the monumental political as well as economic complexities currently faced by the former Soviet bloc countries as they struggle to transform themselves into free market economies.”

What struck me most about the book was its format. The dialogue-driven narrative allowed readers to actively engage with complex ideas, rather than passively absorbing information. By presenting contrasting viewpoints through a back-and-forth discussion, the book made complex economic concepts more accessible and relatable. It’s this approach that I found particularly valuable, and it made me to think about how I could use a similar dialogue format to explore the challenges and solutions in marketing today.

Here is a sample from the book.

Advisor: It is always tempting to regard one’s problems as unique. This is a mistake. After many years of research on a good number of countries desirous of reform, I have come to the following conclusion: The circumstances of these countries were not entirely the same, and each regarded its own situation as special. But certain common elements existed. For example, the principles of physics apply in all nations; by the same token, the basic principles of economics are applicable in all nations. The most essential of these principles is the relationship between economic prosperity and private property rights.

Prime Minister: You seem to be saying that the same boilerplate advice is relevant to all nations, irrespective of their history, culture, traditions, or stage of development—that there are iron laws of economics, which are universal and eternal. I don’t believe that. I am convinced that we must learn from the experience of other nations—that we must, for example, carefully and attentively study the recommendations of the International Monetary Fund (IMF). But I am also convinced that in order to grow an apple tree in a place with a different climate, you must choose the right kind of tree and not try, as some have already done, to grow apples at the North Pole.

Advisor: Let me draw on our experience in Latin America. Forget geography for a moment and put Poland in the place of Argentina, Hungary in the place of Uruguay. You will see states that are weak as organizations; political parties and other associations that are ineffectual in representing and mobilizing the people; economies that are monopolistic, overprotected, and overregulated; agricultures that are poorly designed to feed the people; public bureaucracies that are overgrown; welfare services that are fragmentary and rudimentary. And will you not conclude that such conditions breed governments vulnerable to pressure from large firms, populist movements of doubtful commitment to democratic institutions, armed forces that sit menacingly on the sidelines, church hierarchies torn between authoritarianism and social justice, and nationalist sentiments vulnerable to xenophobia?

The dialogue format inspired this column. I decided to bring together ideas from several of my writings – particularly my recent essay focused on a new direction for marketing – and craft a mock discussion between a CEO, a CMO, and myself. Through this conversation, we explore how marketing must evolve to meet today’s challenges.

Thinks 1411

ThePrint: “With all of its engines only trundling along and not really hitting high gear, the Indian economy is set to see a new persistent ‘Hindu rate of growth’ of 6.5 – 7 per cent, unless some painful reforms are carried out at the central and state levels. The original ‘Hindu rate of growth’ — a term coined by the late economist Raj Krishna in 1978 — was meant to capture the persistence of a low rate of growth accompanied by low per capita income. At the time, that low rate of growth was pegged at around 3.5 – 4 per cent. The new, current ‘Hindu rate of growth’ is far faster than that, but is still wholly inadequate to cater to the needs of the population. It’s through faster growth that jobs can be created, incomes increased, and standards of living improved. The reason why India is not likely to exceed this new ‘Hindu rate’ is that each of its engines of growth — consumption, investment, exports, and government expenditure — are all running at their basic levels. That is, none of them are outperforming, and aren’t expected to in the medium term.”

Brian Halligan: “Your org will naturally become more risk averse as you scale: When you are in the early stages of your startup, almost by definition, everyone you hire is very risk seeking and is willing to be very bold to create a lot of upside.  After all, there’s very little downside to protect!  As you scale and have something to lose, the organization will protect that.  This is a natural thing that happens to existing employees whose net worth is improving – I don’t blame them.  This is a natural thing that happens to new hires when they look at your brand on their LinkedIn profile as part of the decision to join you – again, I don’t blame them.  In our case, my cofounder is preternaturally risk seeking and was always a very good counterbalance to that trend toward risk aversion…Cultures typically “break” around 150 employees (Dunbar’s number):  Our culture broke around this size and almost every other CEO’s company I talk to did too.  I think it is a combination of the missionary ratio, some risk aversion, the fact the founder didn’t interview everyone, and that there is a new layer of management.  Getting through that in one piece is kind of where you move from a startup to a scaleup, imho.”

FT: “India’s economy is failing to create enough jobs for its young and growing population and train the skilled workers its companies need to harness that demographic dividend. This mismatch is feeding widespread grievances and represents one of the biggest challenges for Modi as he enters his second decade in power. “Every month about a million formal job seekers are being added to the workforce,” says Rituparna Chakraborty, co-founder of Teamlease, which describes itself as India’s biggest staffing company. “Nine out of 10 of them go into the informal sector — jobs where there is no employment contract, no social security benefits, no protection, and no wage guarantees.” “The poorest Indians tend to take on daily wage jobs in things like construction because there aren’t too many alternatives,” says Shruti Rajagopalan, senior research fellow at the Mercatus Center at George Mason University, in Virginia. “The people in the middle are still waiting, and would rather hold out for a government job, or work on the family farm because at least it provides them food security.””

Mint: “The time taken between a crisis being identified and appropriate actions being initiated to deal with it is of utmost importance. In times of crisis, the worst response is usually silence of the top leadership. In this age of social media, not communicating within few hours of a crisis breaking out is a cardinal error. As soon as a crisis happens, communication channels must be opened both to internal teams and the external world. The longer it takes to communicate, higher the chance of unfounded rumours filling a vacuum of information. Such a delay could also be construed as the organization involved being on the backfoot. What you communicate is as important as when you communicate. To decide what you need to say, one should quickly develop an understanding of the crisis.”

A Premiumisation Playbook for ESPs: Commodity to Profipoly

Published November 11, 2024

1

Recent Trends

Over the past few years, premiumisation has emerged as a notable trend in the consumer landscape, with companies increasingly offering upmarket versions of their existing products. This strategy aims to elevate a product’s perceived value by incorporating exclusive features, superior quality, or enhanced experiences. It goes beyond mere functionality to offer a heightened level of appeal, often commanding a higher price point due to the distinctive benefits it provides.

Knowledge@Wharton wrote about this in April 2023: “Premiumization has been around for a long, long time, but the practice has been spreading across more companies lately. No longer the domain of the automobile, alcohol, or travel industries, premiumization is showing up in products as humble as lubricant and doughnuts…Wharton marketing professor John Zhang said companies are motivated to make upscale versions of their products because price tiers help them reach different segments of consumers, including the wealthy and middle-class earners who socked away cash during the pandemic.”

Andrew Glor writes: “Premiumization, a retail megatrend and strategic move by consumer brands to elevate product offerings and charge higher prices, is on the rise. Over the past couple of years, there’s been a growing demand for quality, authenticity and unique experiences. At the same time, inflation has driven companies to become more comfortable with price increases.”

I asked ChatGPT for some recent examples of premiumisation in the consumer industry.

  • Beverages: In the drinks industry, brands like Coca-Cola and PepsiCo have introduced premium versions of their soft drinks, such as Coca-Cola Signature Mixers and Pepsi’s craft soda line, featuring artisanal ingredients and sophisticated packaging to target more discerning consumers.
  • Automobiles: Car manufacturers are embracing premiumisation by adding luxury features to their mid-range vehicles. For instance, brands like Kia and Hyundai have launched models with high-end tech, premium interiors, and advanced safety features, blurring the lines between mainstream and luxury cars.
  • Skincare and Beauty: Beauty brands like Estée Lauder and L’Oréal have expanded into premium skincare lines, offering products with advanced formulations, rare ingredients like caviar extracts or gold-infused serums, and sleek, high-end packaging, catering to consumers willing to pay more for superior results.
  • Subscription Services: Streaming platforms like Netflix and Disney+ offer premium subscription tiers that provide exclusive content, higher video quality, and additional user profiles, targeting viewers seeking enhanced entertainment experiences beyond the standard offerings.
  • Fashion: High-street fashion brands such as Zara and H&M have launched premium collections with more luxurious materials and craftsmanship. These lines appeal to customers looking for elevated style at a slightly higher price point, blending accessibility with sophistication.

A recent story in the Economic Times discussed premiumisation in India:

The premiumisation story in consumption has continued unabated in the first half of calendar 2024, as per latest data from companies and researchers. This is even when there is a growth slowdown in car and smartphone sales, while sales of fast moving consumer goods ( FMCG) is yet to recover fully.

For the first time ever, vehicles priced over Rs 10 lakh accounted for nearly half of all vehicles (about 48%) sold in the country between January to June as compared to 44% in the same period a year earlier, as per top manufacturers. Sales of these vehicles grew at more than twice the rate of the overall industry – by 13% to nearly a million units in this period. Overall, passenger vehicle sales rose 5.5% in the same period.

The share of Rs 30,000-plus smartphones has gone up to its highest ever of 20% of the overall market by number of units sold between January to May as compared to 17% a year back, Counterpoint Research data shows. By value, it’s 49%.

Counterpoint said the share of 50-inch plus televisions went up from 21% to 24% in total TV sales in India in the same period. The researcher said preliminary numbers for June show the contribution remains in a similar range.

In this series, I will explore the concept of premiumisation through a new lens – within the email industry. Can email service providers (ESPs) elevate their offerings from commodity to becoming a “profipoly” (profits monopoly)? By premiumising their services, can ESPs break free from commoditisation and create a unique, high-value position in the digital marketing landscape? This journey encapsulates a vision where ESPs transform email services into strategic assets, commanding both superior profits and a dominant market position.

2

Overview

I asked Claude to provide an overview of premiumisation.

Premiumisation, the practice of elevating a product or service to a higher-quality, more exclusive status, has become increasingly prevalent in today’s consumer landscape. This strategy involves enhancing offerings to justify higher price points and appeal to discerning customers seeking superior experiences. While not a new concept, premiumisation has gained significant traction in recent years across various industries.

Historical Context

The roots of premiumisation can be traced back to luxury goods markets, where brands like Hermès and Cartier have long positioned themselves as purveyors of exclusive, high-quality products. However, the concept has evolved beyond traditional luxury sectors. In the 1980s and 1990s, companies began applying premiumisation strategies more broadly, with notable examples including the rise of premium ice cream brands like Häagen-Dazs and the emergence of specialty coffee chains like Starbucks.

Recent Surge in Popularity

Several factors have contributed to the recent acceleration of premiumisation:

  1. Shifting consumer preferences: Post-recession, many consumers have adopted a ‘fewer but better’ mentality, prioritising quality over quantity.
  2. Rising disposable incomes: In many markets, growing affluence has increased demand for premium products.
  3. Social media influence: Platforms like Instagram have fuelled desire for aspirational lifestyles and products.
  4. Experiential focus: Consumers increasingly value unique experiences over material possessions, driving demand for premium services and products that offer enhanced experiences.

Why Premiumisation Works

Premiumisation taps into several psychological and economic principles:

  1. Perceived value: Higher prices often signal higher quality, influencing consumer perceptions.
  2. Exclusivity: Limited availability or unique features create a sense of prestige and desirability.
  3. Emotional appeal: Premium products often evoke positive emotions, justifying higher spending.
  4. Differentiation: In crowded markets, premiumisation helps brands stand out from competitors.

Advantages for Brands

  1. Higher profit margins: Premium products typically yield better returns than mass-market alternatives.
  2. Brand equity: Successful premiumisation can elevate overall brand perception and value.
  3. Customer loyalty: Premium offerings often foster stronger emotional connections with consumers.
  4. Market expansion: Premiumisation allows brands to target new, higher-value customer segments.
  5. Innovation driver: The pursuit of premium offerings can spur product development and creativity.

Example: Fever-Tree, a UK-based tonic water brand, successfully premiumised a category long dominated by mass-market products. By focusing on high-quality ingredients and sophisticated flavour profiles, Fever-Tree carved out a profitable niche in the premium mixer market.

Disadvantages and Risks

  1. Overextension: Not all products or services are suitable for premiumisation, and attempts may backfire.
  2. Alienation of core customers: Shifting focus to premium offerings might alienate price-sensitive consumers.
  3. Increased competition: Success in premium markets often attracts new competitors, potentially eroding advantages.
  4. Economic sensitivity: Premium products may be more vulnerable during economic downturns.
  5. Authenticity challenges: Consumers may perceive premiumisation efforts as inauthentic or unjustified.

Example: McDonald’s attempt to introduce premium burgers (e.g., the Arch Deluxe in the 1990s) largely failed, as it conflicted with the brand’s core value proposition of affordable, convenient fast food.

Successful Implementation

To effectively implement premiumisation, brands should:

  1. Understand their target market: Identify customer segments willing to pay for premium offerings.
  2. Deliver genuine value: Ensure premium products or services offer tangible benefits over standard alternatives.
  3. Maintain consistency: Align premium offerings with overall brand identity and values.
  4. Invest in marketing: Effectively communicate the unique value proposition of premium offerings.
  5. Balance portfolio: Maintain a range of products or services to cater to different customer segments.

Example: Toyota’s creation of the Lexus brand exemplifies successful premiumisation. By developing a separate luxury marque, Toyota entered the premium automotive market without compromising its core brand identity.

To summarise: Premiumisation remains a powerful strategy for brands seeking to enhance value perception and capture higher-margin market segments. However, its success hinges on a deep understanding of consumer needs, authentic execution, and careful balance with existing product lines. As consumer preferences continue to evolve, premiumisation is likely to remain a key consideration for brands across various industries, driving innovation and shaping market dynamics.

3

B2B and SaaS

This section written with Claude, ChatGPT and Preplexity.

While premiumisation is often associated with consumer goods, it’s equally relevant in the B2B and SaaS sectors. These industries have their own unique approaches to creating and marketing premium offerings, often focusing on enhanced functionality, advanced features, and superior support.

B2B

Companies in industrial manufacturing are increasingly adopting premiumisation-based pricing strategies. This involves creating a tiered pricing structure that offers various product variants at different price points, allowing businesses to cater to a broader range of customer segments while capturing additional value. This approach enhances market share and strengthens competitive positioning

  • Caterpillar Inc.: As a leading manufacturer of heavy equipment, Caterpillar has successfully implemented a premiumisation strategy by offering value-added services alongside their machinery. This includes personalized customer support, training programs, and advanced telematics solutions that optimize machine performance. These supplementary services not only enhance the customer experience but also create additional revenue streams for the company.
  • GE Aviation: GE Aviation offers premiumisation through its “Predictive Maintenance” services, leveraging AI and big data analytics to anticipate and address potential issues in aircraft engines before they cause significant problems. This premium service reduces downtime and operational costs for airlines, offering a compelling value proposition that goes beyond simply selling engines. GE’s ability to provide real-time insights and predictive capabilities justifies its premium pricing and solidifies long-term partnerships with airlines.
  • Siemens: Siemens effectively communicates the quantifiable value of its industrial equipment, particularly energy-efficient solutions that reduce operational costs. By showcasing the financial advantages and operational efficiencies gained from their premium offerings, Siemens justifies higher pricing and builds trust with clients
  • John Deere: Known for its agricultural machinery, John Deere has introduced premiumisation through its precision agriculture technology, which uses GPS, AI, and data analytics to optimise farming operations. The company’s premium offerings include advanced sensors, automated equipment, and cloud-based platforms that enable farmers to increase yields, reduce costs, and manage resources more effectively. By positioning itself as a technology leader in agriculture, John Deere has successfully moved beyond traditional equipment sales into higher-margin digital services.

SaaS

  1. Salesforce: The CRM giant offers multiple tiers, from basic to enterprise-level. Premium offerings include advanced analytics, AI-powered insights, and dedicated support, catering to larger businesses with complex needs.
  2. Slack: This communication platform provides a freemium model with paid tiers offering features like unlimited message history, group video calls, and advanced user management for enterprises.
  3. Adobe Creative Cloud: Adobe transitioned from selling standalone software to a subscription model with various tiers. Premium offerings include industry-specific tools, larger cloud storage, and advanced collaboration features.
  4. Zoom: During the pandemic, Zoom quickly became a household name. They offer premium features for businesses such as longer meeting durations, cloud recording, and advanced team management.
  5. HubSpot: This inbound marketing platform offers different hubs (Marketing, Sales, Service) with tiered pricing. Premium tiers include advanced automation, reporting, and integrations.
  6. Microsoft 365: Formerly Office 365, Microsoft’s productivity suite offers various tiers for businesses. Premium options include advanced security features, device management, and business intelligence tools.
  7. Amazon Web Services (AWS): While AWS offers pay-as-you-go pricing, they also have premium support plans and enterprise-grade services with advanced features and dedicated resources.
  8. Mailchimp: This email marketing platform has successfully implemented a freemium model with premium tiers offering advanced segmentation, multivariate testing, and comparative reporting.

Key Aspects of B2B and SaaS Premiumisation

In the B2B and SaaS world, premiumisation often revolves around:

  1. Increased Functionality and Features: Premium tiers typically offer more advanced tools and capabilities that cater to sophisticated users or larger organisations.
  2. Advanced Analytics and Reporting: Higher-tier offerings often include more detailed insights and data analysis capabilities.
  3. Enhanced Security and Compliance Measures: For businesses handling sensitive data, premium versions may offer advanced security features and compliance certifications.
  4. Dedicated Support and Account Management: Premium customers often receive priority support or dedicated account managers, enhancing the overall service experience.
  5. Customisation and Integration Capabilities: Higher-tier offerings may allow for greater customisation or easier integration with other business systems.
  6. Higher Usage Limits or Unlimited Usage: Premium tiers often remove restrictions on usage, storage, or other quantifiable metrics.
  7. Scalability: Premium offerings are often designed to scale more effectively, catering to growing businesses or enterprises.

Strategic Considerations

B2B and SaaS companies implementing premiumisation strategies must carefully consider several factors:

  • Value Proposition: The premium offering must provide clear, tangible benefits over the standard version to justify the higher price point.
  • Target Market: Understanding which customer segments are willing to pay for premium features is crucial for effective pricing and marketing.
  • Competitive Landscape: Premium offerings should provide a competitive edge in the market, offering features or services that set the company apart.
  • Pricing Strategy: Tiered pricing models need to be structured to encourage upgrades while still providing value at each level.
  • Customer Experience: The transition from standard to premium tiers should be smooth, with excellent onboarding and support to justify the higher cost.

Premiumisation in B2B and SaaS sectors allows companies to cater to a wide range of customers, from small businesses to large enterprises, while maximising revenue from those willing to pay for advanced features and support. By offering tiered services, these companies can capture different market segments and provide scalable solutions that grow with their clients’ needs. As the B2B and SaaS markets continue to evolve, we can expect to see further innovations in premiumisation strategies. Companies will likely focus on creating even more personalised and value-added services, leveraging technologies like AI and ML to offer predictive analytics, automated workflows, and highly customised user experiences in their premium offerings.

4

Email

I asked Claude and ChatGPT to suggest how premiumisation could work in the email industry.

Email has long been a staple of digital communication, yet over time, it has become increasingly commoditised. Most Email Service Providers (ESPs) now offer similar basic functionality such as bulk sending, list management, and simple analytics. This commoditisation has led to downward pressure on pricing, making it difficult for ESPs to differentiate themselves or command higher fees. The result is a market saturated with similar offerings, where price often becomes the primary deciding factor for businesses choosing an ESP.

To reverse this trend and premiumise email, ESPs must rethink their value proposition and introduce innovative features that go beyond the basics. By shifting the perception of email from a basic utility to a powerful, strategic business tool, ESPs can justify higher pricing across different market segments.

Key Strategies for Reversing Commoditisation

  1. Advanced Personalisation:
    • Leverage AI and machine learning for highly targeted content delivery.
    • Offer dynamic content that adapts in real-time based on user behaviour, preferences, and contextual data.
    • For mid-market and enterprise customers, provide robust integration with customer data platforms (CDPs) for sophisticated personalisation strategies.
  2. Interactive and Dynamic Email Content:
    • Implement AMP for Email, enabling users to perform actions without leaving the inbox.
    • For enterprises, integrate complex workflows directly within emails (e.g., approving expense reports, managing projects).
  3. Enhanced Security and Privacy Features:
    • Offer end-to-end encryption, advanced phishing protection, and compliance with industry-specific regulations (e.g., GDPR, HIPAA).
    • Provide audit trails, access controls, and secure email gateways for enterprise clients handling sensitive information.
  4. AI-Driven Campaign Optimisation:
    • Implement predictive send-time optimisation, subject line testing, and content recommendations based on previous campaign data.
    • Offer automated re-engagement campaigns for inactive subscribers.
  5. Comprehensive Analytics and Reporting:
    • Provide insights into customer lifetime value (LTV), attribution modelling, and conversion tracking across multiple touchpoints.
    • Offer AI-powered predictive models for forecasting future campaign performance.
  6. Dedicated Support and Customisation:
    • Offer dedicated account managers, 24/7 premium support, and bespoke onboarding and training services.
    • Provide customisation options for email templates and workflows tailored to specific client needs.
  7. Omnichannel Integration:
    • Enable seamless coordination of email campaigns with other digital channels (SMS, social media, push notifications).
    • Offer advanced automation for creating complex, cross-channel customer journeys.
  8. Premium Content Delivery Features:
    • Guarantee inbox placement, expedited email sending, or priority sending during peak times.
    • Provide scalable infrastructure for high-volume sending with dedicated IP addresses and domain management.
  9. Advanced Deliverability Tools:
    • Offer sophisticated deliverability optimisation with real-time monitoring and alerting.
    • Provide IP warm-up services and advanced email authentication (e.g., BIMI support).
  10. Custom Data Enrichment Services:
    • Offer demographic appending, purchasing behaviour analysis, and integration of third-party data sources.
    • Provide advanced segmentation tools for more accurate targeting and personalisation.

Premium Offerings for Different Market Segments

ESPs can tailor their premium offerings to address the specific needs of SMBs, mid-market, and enterprise customers:

SMB Premium Offerings:

  • AI-powered content generation and optimization
  • Automated customer journey mapping and execution
  • User-friendly design tools with premium templates
  • Basic deliverability monitoring and optimization

Mid-Market Premium Offerings:

  • Advanced marketing automation with multi-channel capabilities
  • Custom integration services with popular CRM and e-commerce platforms
  • A/B testing and multivariate testing capabilities
  • Enhanced deliverability tools with IP warm-up services

Enterprise Premium Offerings:

  • Enterprise-grade security and compliance features
  • Sophisticated workflow automation for complex business processes
  • AI-driven predictive modeling and customer insights
  • Omnichannel orchestration across multiple communication channels
  • 24/7 premium support with guaranteed response times

Innovative Features Across Segments:

  • Real-time content personalization based on open-time data
  • Interactive email capabilities (AMP for Email)
  • Voice-activated email composition and management
  • Blockchain-based email security and verification

5

Past Writings

I have discussed many ideas on how email can be enhanced. I have focused more on marketers and the end customer experience.

Epps: The Next Evolution in Email Engagement: “AMPlets (simple use cases) and Email Apps (Epps, which are more complex creations), enable interactive elements like forms, games, and live content within emails, turning them into two-way communication channels. Epps can revolutionise email engagement by containing all interactions within the inbox, eliminating the need for clickthroughs to external pages, and dynamically updating with each open. This seamless experience enhances user engagement and conversion rates, making email a vital channel for deeper customer relationships and improved brand profitability.”

Email’s New Triad: AMPs, Epps, Ads: “The future of email revolves around three key innovations: AMPs, Epps, and Ads. AMP emails (Email 2.0, as I have termed it) are interactive and dynamic, allowing engagement and conversion to happen within the email itself, eliminating the need for clickthroughs to landing pages or apps and thereby reducing friction. Epp (Email App, which can be thought of as Email 3.0) involves building fully functional apps within the email, serving as an alternative to websites and mobile apps. Action Ads are a new format where the landing page is embedded within the ad, improving outcomes. The foundational technology for all three is AMP, a standard endorsed by Google and Yahoo.”

Upgrading Email Marketing: Epps, ActionAds, and More: If Email 1.0 represented the era of static HTML content, and Email 2.0 ushered in the age of interactive AMP-powered experiences, then Email 3.0 (E3) heralds the transformative fusion of AMP’s interactivity with AI’s predictive power and personalisation capabilities. This convergence promises to redefine email marketing, turning every message into a dynamic, individualised touchpoint in the customer journey. E3 can combat AdWaste and boost profitability for brands by enabling hotlines, addressing the issue of attention recession. [Here are] 10 innovations: AMPlets, Epps, Consumer Epps, ActionAds, Atomic Rewards, Email Footer Containers, Email Minis, E3 Inbox, ELM (Email Language Model), and Email Twins.” The essay also discussed various business models: CPM (Cost Per Thousand), CPA (Cost Per Action), SaaS Platform Fee, Ads Commission, Services, Freemium Model, Revenue Sharing, and Licensing Fees.

Epps Footers: New Frontiers in Email Marketing: “By reimagining the email footer as an engaging and dynamic space, we can significantly enhance the effectiveness of email marketing. Transforming the footer into an “Epp within an Epp” allows marketers to include a variety of interactive elements, from feedback forms and data collection to personalised offers and fun quizzes. This shift not only increases the likelihood of emails being opened but also ensures that recipients find value in each interaction, making them more likely to engage with future emails. The potential of Epps Footers lies in their ability to turn a traditionally overlooked part of the email into a powerful tool for driving continuous engagement, fostering deeper connections with customers, and ultimately transforming email marketing strategies.”

Email Envelope: Eight Elements to Energise Engagement: “Think of…an “email envelope” for the brand message and content, designed to drive more opens and actions. This envelope is an element that email service providers can incorporate into their delivery platforms. While the email body remains the primary focus, the envelope can serve as a powerful engagement driver, enhancing the overall effectiveness of email marketing… The Email Envelope solves the critical issue of attention recession in email marketing. With declining open and click-through rates, marketers have struggled to capture and retain user interest. The Email Envelope turns this paradigm on its head by introducing multiple touchpoints for engagement, creating a multi-layered experience that encourages interaction and habitual email checking… There are eight elements which power it: Mu in Subject, Epps Header, Epps Footer, Action Ads, AMPifier, API Injection, AI+Email, and Performance Pricing.”

I wrote this on Performance Pricing: “Performance Pricing transforms the email marketing cost structure by shifting from traditional volume-based pricing to a model directly aligned with campaign performance. Building on the ZeroCPM concept, this approach changes the dynamics between Email Service Providers (ESPs) and their clients. The ZeroCPM model eliminates upfront costs per thousand emails sent, instead tying compensation to specific outcomes such as conversion-based pricing (fees based on actual sales or sign-ups), engagement-based pricing (costs tied to open rates, click-through rates, or time spent interacting with the email), revenue share models (ESPs receiving a percentage of revenue generated from email campaigns), and action-based pricing (charges based on specific user actions within interactive email elements). This outcomes-based approach offers several benefits: risk sharing between ESPs and clients, incentivising ESPs to improve email performance and deliverability, and encouraging innovation in email engagement strategies.”

Email Envelope: Eight Elements to Energise Engagement: “Atomic Rewards – micro-incentives for actions taken within emails. These rewards, which I call ‘Mu,’ can be earned through various in-email actions such as opening emails, providing zero-party data, and completing specific tasks…By positioning Mu as a key component of the Email Envelope and offering it across multiple brands, Netcore (or any ESP) creates a powerful ecosystem that benefits users, brands, and itself. This approach not only addresses the limitations of single-brand loyalty programs but also leverages the unique position of an ESP to create a more engaging, rewarding, and effective email marketing landscape.”

6

Possibilities

Based on my writings, I asked ChatGPT and Claude to list the possibilities for email premiumisation for ESPs.

  1. Interactive Email Technologies
    • AMPlets: Simple interactive use cases within emails
    • Epps (Email Apps): Creating interactive, fully functional apps within emails, enabling two-way communication and in-email actions without needing external clickthroughs
    • AMP Emails: Incorporating dynamic, interactive content directly within the email to reduce friction and enhance engagement
  2. Advanced Engagement Features
    • Email Envelope: A multi-layered email experience with enhanced elements such as Mu in Subject, Epps Header and Footer, Action Ads, and AMPifier for greater engagement
    • Epps Headers and Footers: Transforming email footers into interactive spaces, adding elements like feedback forms, quizzes, and personalised offers
    • Email Minis: Lightweight, interactive elements that provide engaging experiences within concise email formats
    • In-email forms, games, and live content
  3. AI-Powered Personalization
    • ELM (Email Language Model): AI-driven content generation and optimization
    • AI+Email: Leveraging AI for improved email performance
    • Email Twins: Using AI and digital twins to personalise and automate email content dynamically
  4. Enhanced Advertising Capabilities
    • ActionAds: Embedding landing pages within ads to improve outcomes and streamline user experience
    • API Injection: Real-time content insertion based on external data
  5. Loyalty and Rewards Integration
    • Atomic Rewards (Mu): Offering micro-incentives within emails to boost engagement and create a more rewarding email ecosystem
  6. Innovative Pricing Models
    • Performance Pricing: Tying pricing to performance metrics like conversions, engagement, or specific actions rather than email volume
    • ZeroCPM: Elimination of upfront costs per thousand emails sent
    • Revenue sharing models based on email-generated sales
  7. Email-as-a-Platform Capabilities
    • E3 Inbox: A transformative email experience blending AMP’s interactivity with AI-driven personalisation and predictive capabilities
    • Consumer Epps: Apps within emails designed for end-users

These innovative features and strategies represent a comprehensive approach to email premiumisation. They address key challenges in the email industry such as engagement, personalization, and measurable outcomes, while also introducing new revenue models for ESPs.

By implementing these possibilities, ESPs can:

  1. Transform email from a static, one-way communication channel into an interactive, dynamic platform
  2. Address the issue of attention recession in email marketing
  3. Enhance user engagement through interactive and personalized experiences
  4. Provide measurable business outcomes, justifying higher pricing
  5. Create new revenue streams through performance-based pricing and rewards systems
  6. Offer unique value propositions to both marketers and end-users

This approach to email premiumisation positions email as a central, high-value element in modern digital communication strategies. It allows ESPs to differentiate their offerings, command premium prices, and drive innovation in the email industry.

7

Four Paths

ESPs can consider four paths for creating premium email offerings.

Higher CPM for Enhanced Performance

This approach is straightforward and easily implementable. By improving email engagement and actions, ESPs can justify charging a higher CPM for email delivery. ESPs could offer two solutions: “Email Classic,” a regular email pipe, and “Email Premium,” which incorporates advanced features like the Email Envelope (Mu in Subject, Epps Headers, Epps Footers). This content and gamification wrapper around the brand message enhances outcomes, making higher pricing more justifiable.

To further differentiate Email Premium, ESPs can:

  • Develop pre-built Epps, such as a “magic cart” for eCommerce, tailored to specific industries or use cases. (See The Coming of Inbox Commerce and Email Shops can Transform eCommerce.)
  • Integrate ELMs (Email Language Models) and Email Twins into their core platforms, offering unique AI-driven personalization capabilities.
  • Provide detailed analytics comparing the performance of Email Classic vs Email Premium, showcasing the ROI of the enhanced features.

CPA for New Email Use Cases

This idea focuses on tapping into non-consumption, identifying scenarios where emails are underutilised. One example is reactivation campaigns. ESPs could offer performance-based pricing by delivering emails for free and charging based on outcomes like clicks, add-to-cart actions, or even purchases.

To make this model more attractive, ESPs can provide detailed cost comparisons between their CPA model and traditional reacquisition costs through adtech platforms. They can also develop a sliding scale of fees based on the value of the action (e.g., lower fee for a click, higher fee for a purchase). ESPs can also offer risk-sharing models where the ESP invests in the campaign upfront and shares in the resulting revenue.

ESPs can also develop new categories, such as subscriptions to Email Minis, where they provide both content and delivery in an integrated solution. This could include daily industry news digests, personalized product recommendations, interactive quizzes or polls, and micro-learning courses delivered via email. (See Email 2.0 Progency: eCommerce’s Profit Powerhouse.)

Revenue Sharing from New Streams

ESPs can collaborate with brands to generate revenue through ActionAds embedded in emails. To make this viable, ESPs would need to build email ad networks to create ads that leverage AMP to bring the landing page experience within the email itself. (See Ads in Emails: Some New Ideas.) To enhance this model, ESPs can:

  • Develop partnerships with existing ad networks to expand reach and inventory.
  • Create a self-serve platform for brands to easily create and manage their ActionAds campaigns.
  • Offer advanced targeting options using the rich data available from email interactions.
  • Provide real-time analytics and optimisation tools for ActionAds performance.

This model enables ESPs to share revenue from the ad performance, aligning their interests with those of the brands.

Email Kaizen Services

ESPs can enhance their offerings by adding a “thin” layer of services designed to improve email performance and justify higher pricing. These services could include

  • Bespoke development of Epps tailored to the brand’s specific needs and audience.
  • Fine-tuned monitoring of email analytics beyond the brand’s marketing team’s capabilities, with regular performance reviews and optimization recommendations.
  • Insights generated by AI Twins, providing deep analysis of customer behavior and preferences. (See AI Twins: The Future of Marketing Intelligence.)
  • Continuous A/B testing and optimization of email content, design, and delivery strategies.

Brands would likely pay a premium for expert teams focused on consistently improving email outcomes. This service layer would also increase ESP stickiness, making it harder for brands to switch providers. (See Bundled Kaizen Services: An Advantage for Indian SaaS and New SaaS: Services, AI Agents, Sharing.)

**

In a rapidly evolving digital landscape, premiumisation offers ESPs an opportunity to break free from the constraints of commoditisation and create significant new value for brands, their customers, and for the ESPs themselves. By leveraging advanced features, performance-based pricing models, and strategic service layers, ESPs can transform email marketing from a cost-driven channel into a performance-focused, ROI-generating engine. As email continues to play a central role in customer engagement, those ESPs that embrace innovation and tailor their offerings to meet the diverse needs of brands will be best positioned to capture new revenue streams, foster deeper client relationships, and lead the future of email marketing. The key to success lies in continuous innovation, data-driven decision making, and a relentless focus on delivering measurable value to clients. By positioning email as a strategic asset that can help re-engineer retention and drive profits rather than a commodity service, ESPs can drive growth, remain at the forefront of digital marketing evolution, and craft their own path to becoming a Profipoly.

Thinks 1410

FT: “What makes Balatro so addictive? Put bluntly, the same feedback loop you may recognise from such pastimes as, well, gambling. The game revolves around playing poker hands from cards in a deck — only there are no other players or competing hands to defeat. Instead, different hands and different cards are assigned values, and your aim is to achieve a certain score to progress to the next round. After each round, you visit a shop where you can acquire tools to improve your chances of success: jokers that affect how your cards score and interact with one another; tarot cards that can skew the composition of the deck in your favour. But, most importantly, once you’ve paid your £9.99 for the game, you’re only ever staking theoretical chips, not real money. Instead of reacting to a disappointing result with a groan or a cold sweat, you learn to incorporate it into your long-term strategy.”

Alice Newton-Rex: “WhatsApp has two main revenue streams. One of them is paid messaging, such as the customer service I was just talking about, or maybe an airline sending you a boarding pass. The other is Click to WhatsApp ads, which are run on Facebook and Instagram. When you click on them, it opens up a conversation with the business on WhatsApp. This is popular in some developing countries, where businesses might not have a presence online…Click to WhatsApp ads is the more established business, with revenue in the billions. Paid messaging is a bit earlier in the journey, but it’s also doing well and we’ve passed a $1bn run rate.”

Donald Boudreaux: “Strangers asking for bank-account numbers do differ in some ways from strangers asking for votes. But I’m struck by the similarities. In both cases, individuals who we don’t know and who don’t know us seek to gain our trust so that they can then gain open-ended access to our wealth. In both cases, the strangers seeking our trust proclaim there to be a special, personal connection between them and us. And in both cases there is every reason to distrust these proclamations.”

Microsoft AI CEO Mustafa Suleyman on AI Agents: “The first stage is AI processing the same information that you process—seeing what you see, hearing what you hear, consuming the text that you consume. The second phase is [AI having] a long term, persistent memory that creates a shared understanding over time. And the third stage is AI interacting with third parties by sending instructions and taking actions—to buy things, book things, plan a schedule.”

Life Notes #40: Hacks

After seeing Hacks sweep several awards, including Best Comedy Series, at the recent Emmys, I decided to give it a watch – and was pleasantly surprised.

I asked ChatGPT to provide an overview of Hacks.

Hacks is a critically acclaimed dark comedy web series that revolves around the professional and personal relationship between two women from different generations in the world of stand-up comedy.

The story centers on Deborah Vance (played by Jean Smart), a legendary, sharp-witted comedian in Las Vegas whose career is beginning to decline. She’s a trailblazer in her field but is struggling to stay relevant in the modern entertainment landscape. To revitalize her act, Deborah reluctantly agrees to work with Ava Daniels (played by Hannah Einbinder), a young, down-on-her-luck comedy writer who is struggling after being “canceled” due to a controversial joke.

Initially, the two women clash due to their generational and cultural differences—Deborah is old-school, unapologetic, and set in her ways, while Ava is more progressive, idealistic, and blunt. However, as they work together, they start to learn from each other and form a complicated but meaningful partnership. The show explores themes of ambition, ego, the cost of success, and how two very different people can find common ground and grow both personally and professionally.

Hacks balances sharp humor with emotional depth, delving into the challenges faced by women in comedy and the entertainment industry. The series is lauded for its witty dialogue, strong performances, especially by Jean Smart, and the nuanced portrayal of its characters.

As I watched Hacks and the character of Deborah Vance, I realised how essential it is to keep our passion alive as we grow older, and how crucial it is to continually reinvent ourselves. Deborah’s journey reminded me that staying relevant requires not just experience, but an openness to evolve with the times (and learn from the young!) When I present email innovations in meetings, people are often surprised to see me personally doing the demos. I always tell them: this is what excites me – showing new ideas and exploring how tomorrow’s world can be different.

Learning never stops, and to remain at the forefront, especially in a constantly shifting world, we must embrace that change and adapt alongside it. Deborah’s struggle and eventual adaptation in Hacks mirror the challenges many of us face in our careers. It’s not just about staying current; it’s about finding new ways to apply our wisdom and experience to emerging contexts. This process of reinvention isn’t always comfortable, but it’s necessary for growth and continued relevance. Whether in comedy, technology, or any other field, the willingness to step out of our comfort zones and engage with new ideas is what keeps us vibrant and valuable in our professions. Deborah’s journey in Hacks serves as a powerful reminder that age is no barrier to innovation (I am 57) – in fact, it can be our greatest asset when combined with a willingness to learn and adapt.

Thinks 1409

The Generalist: “Founded in 2023, Avra runs a selective program for the world’s best growth-stage entrepreneurs. It helps the leaders of breakout businesses learn how to build an executive team, maintain shipping speed, and plan for the future. It’s a kind of doctoral program for startup CEOs, albeit one with a well-guarded curriculum and a venture fund on the back end…Avra’s program is taught by some of the startup ecosystem’s most impressive and successful founders. Sessions cover choosing the right metrics, hiring executives, scaling engineering, leveling up financial planning, and preparing for future fundraises. Each one is a tactical masterclass full of detail…Though Avra’s principal mission is to assist founders through targeted education, it monetizes as a venture firm. It is raising a reported $350 million to invest in a small fraction of the startups that pass through its program. It’s a clever strategy that reorders the traditional sequence venture capital follows. Rather than winning a deal and then adding value, Avra does the work upfront, proving its impact and building rapport ahead of a future round.”

FT: “Many economists have argued that encouraging more women to enter the paid workforce is one of the most important steps that India could undertake to turbocharge growth. The World Bank has estimated that if women’s participation in the workforce were to reach 50 per cent, India could boost its annual growth rate by 1.5 percentage points. Christine Lagarde, then IMF managing director, stated in 2015 that India’s GDP would be nearly 30 per cent larger if the participation of women were to match that of men, describing this as an “economic no-brainer”…“Gender is now macro-critical in India,” says Radhicka Kapoor, a senior specialist on employment with the International Labour Organization in New Delhi. “When you have all these targets of becoming a developed economy by 2047, you need additional drivers of growth — and addressing the gender gap is an important part of that.””

NYTimes: “OpenAI recently unveiled a new version of ChatGPT that “reasons” through math, science and computer programming problems. This technology, called OpenAI o1, requires even more computing power than previous versions of ChatGPT. OpenAI o1 did not learn skills just by analyzing internet data. It was built with something called reinforcement learning. Through this process, which can go on for months, the system can learn additional behavior through extensive trial and error. By working through various math problems, for instance, it can learn which methods lead to the right answer and which do not. OpenAI believes this kind of technology could be the future of its business. If it can get its hands on more computing power, its A.I. can learn to do more. At least, that is the theory.” FT: “[OpenAI] claims its GPT-o1 is the first model capable of breaking a complex problem down and reasoning its way to a solution. That could point to a future where AI models themselves take on more of the work in a business application, sucking value out of traditional software as they become more central to working life.”

Alex Tabarrok: “India has some of the worst air pollution in the world. India regulates pollution but it uses a command and control approach with criminal penalties, a system in tension with enforcement given low-state capacity. The result has been widespread corruption, inefficiency, and poor enforcement of pollution controls. In a very important paper, Greenstone, Pande, Ryan and Sudarshan report on an experiment with a market for particulate matter in Surat, India. In fact, this is the first particulate-matter market anywhere in the world.”

Vinod Khosla: “What I’m looking for in a founder, above all, is someone flexible in their tactics but obstinate in their vision.”

Life Notes #39: Tree of Three

I’ve always been a fan of making lists. As I wrote: “I live life through lists. To-Do lists. Key priorities. Ideas. Books to read. What to blog about. Discussion points pre- and post-meetings. And so on. I find lists very helpful. Writing things down in my notebook keeps the mind clear… Lists have helped me keep my mind clear and unencumbered, have more productive days knowing there are some key tasks that just have to be done before I sleep, go into meetings and conversations prepared with a clear plan, and ensure that when others expect me to do something I do not disappoint them with an “Oh, I forgot.””

Lists, of course, are more than just a way to jot down items; they’re a powerful tool for organising thoughts and information. Here’s why lists are so useful:

  1. Clarity: Lists help break down complex ideas into manageable parts, making information easier to understand and process.
  2. Structure: They provide a clear structure to our thoughts, helping us see relationships between different elements.
  3. Memory Aid: The act of creating a list helps reinforce information in our memory, making it easier to recall later.

While lists can have any number of items, I’ve found (like many others) that three is often the ideal number. Here’s why:

  1. Cognitive Sweet Spot: Our brains seem to have a natural affinity for patterns of three. Think of “ready, set, go” or “beginning, middle, end.”
  2. Memorability: We tend to remember three items more easily than five or seven. It’s the smallest number that can form a pattern in our minds.
  3. Balance: Three provides a sense of completeness without overwhelming. It offers a beginning, middle, and end, creating a satisfying structure.

The real power of the “Tree of Three” concept comes from nesting these lists of three, creating a fractal-like structure. Here’s how it works:

  1. Start with a Top-Level List: Begin with three main points or categories.
  2. Expand Each Point: For each of these points, create another list of three sub-points.
  3. Continue as Needed: Keep expanding points with sub-lists of three as necessary.

This approach allows us to organise large amounts of information in a structure that remains manageable and memorable. Like Lego blocks, each list of three can connect to others, building a complex yet coherent structure.

I asked Claude to apply the “Tree of Three” concept to an example: planning a vacation.

  1. Destination Planning
    • Choose Location
      • Research climate
      • Consider budget
      • Check travel advisories
    • Transportation
      • Compare flight options
      • Arrange local transit
      • Consider car rental
    • Accommodation
      • Read hotel reviews
      • Check amenities
      • Compare prices
  1. Itinerary Creation
    • Sightseeing
      • List must-see attractions
      • Book guided tours
      • Plan free exploration time
    • Dining
      • Research local cuisine
      • Make reservations
      • Allow for spontaneous choices
    • Activities
      • Schedule adventure sports
      • Plan relaxation time
      • Arrange cultural experiences
  1. Practical Preparations
    • Documentation
      • Check passport validity
      • Obtain necessary visas
      • Arrange travel insurance
    • Packing
      • Create clothing checklist
      • Prepare toiletries
      • Organise travel documents
    • Home Arrangements
      • Arrange pet care
      • Set up home security
      • Inform trusted neighbours

This simplified “Tree of Three” structure for vacation planning demonstrates how complex tasks can be broken down into manageable, memorable chunks. Each main category has three subcategories, which in turn have three specific action items. This nested structure allows for a comprehensive plan without becoming overwhelming.

So, next time you’re faced with a complex problem or a large amount of information to organise, try applying the “Tree of Three” method. You might find that it not only helps you remember the details but also gives you a clearer understanding of how everything fits together.

Thinks 1408

FT: “CEOs turn to podcasts to control their message…Increasingly popular corporate shows allow bosses to speak out in a less formal setting…Communications specialists say podcasts can encourage executives to speak more openly and on a more personal level. This can offer listeners — who typically include employees, shareholders as well as customers and industry specialists — an unfiltered view of the person running the company. “The open-ended format lets executives bring their commentary to life with all sorts of material that might otherwise get left on the cutting-room floor — anecdotes, book references, you name it,” says Joshua Rosen, at communications firm Prosek Partners. “Detours and rabbit holes aren’t just welcome — they’re encouraged. And so there is more room to show depth and breadth, that you are an authority on your industry, but that you also see the bigger picture.””

Economist: “Two big shifts are under way in the world of software development. Since the launch of Chatgpt in 2022, bosses have been falling over themselves to try to find ways to use generative artificial intelligence (AI) productively. Most efforts have so far yielded little, but one exception is software programming. Surveys suggest that developers around the world find generative ai so useful that already about two-fifths of them use it. The profession is changing in another way, too. A growing share of the world’s engineers come from emerging markets. There is no standard definition of a developer, but around 2020 the number of users of Github, a popular platform for storing and sharing code, living in poorer countries surpassed those from the rich world. On the same measure, in the next few years India is expected to overtake America to become the world’s biggest pool of programming talent.”

Manu Joseph: “Why don’t we see new religions today? Has the time of religion passed? I don’t think that is the case. New religions are all around us, they just don’t look like religion yet. They exist as moral ideas, if not mystical. Many centuries later, dominant religions would probably involve the fierce adoration of nature, or maybe a theological veneration of socialism. Their seeds are already here. And like Buddhism of a time, they do not appear to threaten any incumbent religion.”

Mint: “Hardly 4% of India’s workforce has any certified skills, compared to over 70% in most European countries and over 90% in some East Asian economies. Numerous skilling programmes launched over the years have had little impact on actual employment because potential employers, who know what skill gaps need to be filled, have not been involved at the core of these efforts. A new programme announced in the budget that will subsidize apprenticeship in large companies in the organized sector sounds promising. Whether these companies will register with the government to participate in this programme, however, remains to be seen. Finally, this forward-looking programme should focus on preparing India’s workforce for the three fundamental technological revolutions that will shape the emerging global economy: the energy transformation, bio-technology revolution and the Artificial Intelligence (AI) revolution.”

Life Notes #38: A Month of Travels

From late August to the end of September, I found myself in constant motion, traversing continents and time zones. My journey took me from the bustling streets of New York to the sun-soaked shores of San Diego, with a brief stopover in the San Francisco Bay Area. Then, after a week at home, I was back on the move – to Aerocity, New Delhi, for MPS. While I’ve always embraced the thrill of travel, I must admit that after this whirlwind month, the comfort of home was a welcome respite.

Throughout my life, travel has been more than just a pastime; it’s been an integral part of my personal and professional growth. The anticipation of an international trip still excites me, even after all these years. There’s something magical about those long flights that seem to suspend time, offering a rare opportunity for uninterrupted reflection. The immersion in new environments, with their unique sights, sounds, and energy, never fails to stimulate my mind and spark fresh ideas.

Escaping the confines of my office cabin and the predictable rhythm of the home-office-home routine feels liberating. It’s in these moments of geographical and mental displacement that I find myself pondering more deeply about business strategies and life philosophies. The change of scenery acts as a catalyst, helping me approach challenges from new angles and envision possibilities that might have remained hidden in the familiar surroundings of home. Invariably, I return from these trips feeling reinvigorated and brimming with excitement about implementing new concepts.

However, travel is not without its concerns, particularly when it comes to health. During this recent month-long expedition, I battled an irritatingly persistent dry cough that overstayed its welcome. Moreover, for the second time in recent years, I suffered a minor injury during a US trip – this time, a stubbed toe. These incidents serve as reminders of the importance of self-care, even amidst the exhilaration of travel.

While the adventures of travel are numerous, there are aspects of home life that I sorely miss when I’m away. As someone who follows a Jain diet, finding suitable hot meals can be challenging, especially outside of hubs like New York. While I’m not a very fussy eater, I do prefer one hot meal a day, but adhering to this principle can be particularly tricky when navigating international cuisines and limited options, especially at business dinners.

Perhaps what I miss most are my weekend morning writing sessions. Saturday and Sunday mornings have long been sacred times for crafting essays for my blog. Despite my best efforts, I’ve yet to recreate the perfect writing environment I have at home – the comfort of my familiar chair, the efficiency of my table and desktop setup, and the serene quiet of early mornings. (I do my writing from 5-8 am.) These elements combine to create a flow state that’s hard to replicate in hotel rooms or flights, with my laptop.

In the end, it’s always good to be back home – not just for the physical space, but for the sanctuary of routines that ground and nurture me (and, of course, the food).

Thinks 1407

Ed West: “The fundamental reasons for why Britain has fallen behind are strangely absent in the national debate; indeed, most politicians aren’t even that interested in the subject. Perhaps that will change, with the ground-breaking essay, Foundations, written by Ben Southwood, Samuel Hughes and Sam Bowman…The theme running through the essay is that the British system makes it very hard to invest and extremely expensive and legally difficult to build, making housing and energy costs prohibitive.” [via Arnold Kling]

WSJ: “More companies are trying to get the most out of rising payroll costs by making a part of workers’ pay contingent on completing prescribed goals. Employers say the new way to pay professionals from accountants and human-resource managers to marketing assistants can fuel greater productivity. Plenty of overachievers say they are relishing the often-rich upside potential. Yet some workers say they are making less than they bargained for.”

FT: “In Manhattan, Goldman Sachs and Jane Street are separated by a street, a century, and a 160 per cent average pay gap. Goldman and its rival investment banks were once the titans of trading. Now it is Jane Street that paid an average of over $900,000 per employee last year to Goldman’s $340,000, according to FT calculations. The upstart, founded at the turn of the millennium, is among a handful of highly secretive trading firms — also including Citadel Securities, Susquehanna International Group, XTX Markets and DRW — to have capitalised on the electronification of financial markets to seize market share from less nimble and more heavily regulated banking stalwarts, and reshaped Wall Street’s trading landscape in the process.”

Econlib: “As labor becomes more expensive, employers will tend to find substitutes for that labor. One way they can do this is by substituting workers with machines. This tends to happen over time on its own – as technology advances and becomes less expensive, the relative price of using automation as opposed to hiring workers falls, leading to increases in automation. But artificially increasing the price of labor also lowers the relative price of automation, causing more workers to be substituted with automation.”