Helicopter pilot and cosmetics entrepreneur

Nicole Vandelaar Battjes is the founder, CEO, and Chief Pilot of Novictor Helicopters, a Robinson R44 tour operator in Hawaii. Now she has launched a cosmetics company too! Nicol Cosmetics (pilot/founder is in the middle):

It is rare for me to get excited about cosmetics, but I am hoping this company is a big success.

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How productive are you during this coronplague shutdown?

Happy International Workers’ Day, comrades!

How productive are you and your co-workers now that everyone has gone to work-from-home?

In my small survey of for-profit enterprises that are still up and running, but dispersed, popular answers are in the 75-80 percent range. (Massachusetts public schools, however, are down closer to 10 percent.)

One manager at a “Big Tech” firm said that he expected productivity to fall as new projects were undertaken, but that 75-80 percent was a good number for the current work. He’s in Silicon Valley where hardly anyone has children. A manager at a “Big Tech” coding plantation here in Cambridge, also said that her team was at 80 percent. “Really?” I asked. “What about the people with children.” Her response: “Oh, they’re useless.”

Readers: What are you experiencing? If companies can truly work at 80 percent without an (expensive) office, can this be boosted up to the point where office space can be cut out? And if remote work does become popular, why will people want to stay in high-tax high-cost mediocre-weather states such as Massachusetts, New York (#1 in overall state and local tax burden), and New Jersey? Why not sell the $1 million 2,000 square-foot house in MA and work from home in a $1 million 6,000 square-foot house in Texas or Florida, while paying nothing in state income tax?

Related:

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Coronavirus will breathe life into my two-thirds-full airline idea?

David St. Hubbins: “It’s such a fine line between stupid.”

My idea for an airline that wouldn’t sell its middle seats was greeted with derision back in December 2019. Apparently it was on the “stupid” side of the fine line.

If people won’t support the idea in the name of comfort, speed of boarding/unloading, and overall efficiency, maybe fear of death will make the proposal look better?

A coach seat with a guaranteed empty middle seat provides even more separation from a potentially disease-ridden fellow passenger than a first class seat, right? How is that not worth 50 percent more in the coronavirus age? Set a minimum pitch comparable to JetBlue’s Extra Room seats and everyone can travel again for a reasonable price, with reasonable protection from contagion, a lot faster (total time, including boarding), and with a lot less stress from Fall of Saigon-style lines at the gate. (Throw in a free N95 mask for each passenger as soon as the supply chain returns to normal.)

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Why isn’t hand sanitizer back on store shelves?

Stupid question… Why isn’t hand sanitizer back on store shelves?

I can understand how all of the product in stock as of a week ago got sold. But the production lines are still running. Do stores such as Target, Costco, and CVS have standing orders for hand sanitizer based on demand forecast? Or do they wait for supplies to run low and then zap an order automatically to the wholesalers?

Either way, it is tough for me to understand how hoarders, eBay and Amazon reseller profiteers, etc. could have bought up hand sanitizer that was still in production and/or still in transit. If there are standing orders, shouldn’t retailers now be restocked? Maybe they are, but 20 minutes after opening they’ve sold it all? How is that possible, given that they’re limiting to 2 per customer?

Plainly demand for this product is high, but a lot of businesses that would order it are now shut down. Health clubs, for example, theme parks, a lot of office buildings, etc. Shouldn’t the lack of re-orders from these folks balance out, to some extent, the panic buying from consumers?

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Netflix: American Factory

American Factory won the most recent Oscar for Best Documentary. You’re already paying for it so you might as well watch it on Netflix!

The level of access and candor is comparable to what you would see in The Office, but in a real workplace, mostly the Dayton, Ohio factory opened by Fuyao, a Chinese automotive glass manufacturer.

There are some great scenes in which Chinese and American cultures meet, e.g., an American hosts 13 Chinese guests for Thanksgiving with a huge turkey and ham, plus lots of backyard pistol and shotgun shooting.

The factory had been a unionized GM plant from 1981-2008. Fuyao invested $500 million to re-open it as a glass factory in 2016 (investment eventually totaled $1 billion). The opening ceremony hits a rough patch when Senator Sherrod Brown (D-Ohio) comes to speak about how all of the workers should unionize and take back what is rightfully theirs. This is later echoed by an Ohio state rep. Both of the politicians who appear in the movie are huge advocates for unionization despite the fact that they watched the unionized GM jobs migrate south and/or offshore.

How does it work to hire an older heavier heavily tattooed workforce? Not profitably at first. Chairman Cao: “American workers are not efficient and output is low.” He’s a regular cheerful hard-working guy who founded the company in 1987.

Americans are sent over to China so that they can see how a profitable line runs. At least one is too fat to fit all of his tattoos under the provided safety vests. The Chinese plant is like a ballet compared to the American plant. Workers are young, slender, and don’t object to their 12-hour shifts. If opposite sex workers fall in love, they get married at the big New Year celebration. (Same-sex marriage is not available in China and single parenthood is illegal, but that doesn’t mean they’re not celebrating a rainbow of love. YMCA was played at the factory New Year party. There is also an awesome company song, a hymn to transparency.)

(Can Chinese factories deliver Western quality? See this Car and Driver article on the Volvo XC60.)

How to explain the difference in output and quality? An American fluent in Chinese says to a counterpart in China: “Most American workers are there to make money, not to make glass.”

The biggest disappointment, however, turns out to be in the high paid American managers who proved ineffective and disloyal in the chairman’s view. They are fired and the new Chinese president who spent half his 53 years in US explains to the young Chinese supervisors that Americans shower children with praise and that’s why the resulting grownups are all overconfident. He reminds the Chinese overseers to keep praising the American line workers just for showing up.

Big drama in the film is provided by a United Auto Workers unionization drive and election. There are enough disgruntled workers to generate some negative publicity on unsafe conditions and excessive demands. The company spends $1 million on an anti-union consultant. The chairman comes over, surveys the middle-aged whiners, and tells subordinates to hire some young people. A Chinese furnace expert who is there on a two-year knowledge transfer stint says, regarding the union idea: “one mountain cannot hold two tigers.”

Eventually, the company is able to stop the red ink from flowing. A key part of that seems to be installing robots to do the stuff that Chinese workers can do quickly, but Americans cannot.

If you’re interested in business or China, you should see American Factory!

Presumably reflecting Americans’ lack of interest in numbers, the film never tries to explain why Fuyao wanted a U.S. factory. Why not build an additional factory in China and ship the output wherever in the world it is needed?

Chairman Cao explains in this interview:

First of all, China had a VAT tax, and the United States did not. Secondly, labor costs in the United States are very high, accounting for 40% of the operating cost, whereas in China it only accounts for 20%, but the proportion of insurance paid by Chinese companies was very high. Although labor costs are half as expensive domestically, we calculate that in our case we were nearly 4% more expensive than the United States, plus the VAT for auto glass, which is around 12%. Third, the American energy prices were lower than China’s. The price of natural gas there was one-fifth that of China’s, electricity was only 40% of China’s price, gasoline cost only half of what it did in China, and the cost of transportation and logistics were relatively low. These inputs made the price 4% to 5% cheaper, so the overall calculation made production 16% to 17% cheaper. Moreover, if I shipped the glass from China to the United States, the freight costs would increase by 15% to 20%.

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Brilliant way to upsell airline passengers: renumber the seats

I recently bought a ticket on Virgin Atlantic from BOS to LHR, July 6-15 (meet friends at the Glyndebourne opera and then maybe out to Oslo). The available coach seats are all way in the back of the plane, starting at row 40 and going up into the 60s. Who wants to wait for 40+ rows of people to deplane into the massive queues at Heathrow before getting off? Maybe it is time to pay up for Premium Economy or Business.

But wait… can they really cram that many seats into an Airbus A330? Even an Airbus A380 in high-capacity configuration (suitable for chartering to deliver a daily supply of 840 new migrants to cities and countries where the virtuous claim to want to welcome everyone!) can’t have 65 rows of seats, can it? The seatguru map shows that rows 12-15 don’t exist in Virgin’s A330. And rows 26-39 don’t exist. The “back of the bus” seat numbers actually start in the middle of the wing. The 50s are the new 30s!

Would you pay a 50 percent premium to move from row 22 to row 21? How about from row 40 to row 25? That has to be a better deal, right?

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Why aren’t specialty smartphones available?

The automobile market requires high capital investment, yet we don’t see just a handful of almost-identical models taking the entire market. Starting from Android, building a smartphone shouldn’t require anywhere near the investment that is required to build a sports car or niche SUV, but where are the niche phones?

Example: Pilots would surely appreciate a smartphone, maybe Garmin-brand, with built-in ADS-B receiver and AHRS. Now a full backup panel is available at all times. Frequencies for ADS-B are 0.978 GHz and 1.09 GHz, not too different from the 0.8-1.9 GHz mobile phone bands.

Readers: What other capabilities would make good additions to smartphones for niche users? Why don’t these devices exist in the marketplace?

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How to get rich in China: open a CVS clone

Merry Christmas Eve.

Suppose that you’ve been procrastinating or away on a trip. Your house is not decorated. You have not purchased any gifts. You don’t have any gift wrap. You are out of milk. You need a prescription refilled. You need a toothbrush and some shampoo.

Live in the city? Walk a maximum of 4-8 blocks to the nearest CVS (or Walgreens), likely open 24 hours. Live in the suburbs? Drive your pavement-melting SUV to the CVS that is 10 minutes away (maybe 20 in traffic?).

Suppose that you live in Shanghai, a city within a metro area with 35 million residents. Where’s the CVS or CVS-like store? Nowhere! A local friend said that Watsons was the closest, but it is more like the makeup section of a CVS. Note the lack of density in the photos below. Note also the air pollution mask section. (Also that the cash registers are at the back of the store; China seems to lack most of the anti-shoplifting measures that retailers have applied here in the U.S.)

(Also note the gender binarism in the restroom signage for the neighborhood mall in which this Watsons resides and the pedestrian overpass for the busy adjacent road.)

A Shanghai resident could likely get everything he/she/ze needed within less than an hour via delivery. Yet I think folks there would appreciate the serendipity of shopping in a CVS-style store.

For those who complain that the Chinese are trashing the planet via greenhouse gas emissions: Shanghai is actually saving the planet via government regulation. If you don’t bring your own bag, the merchant is required to charge you 5-10 cents for a plastic bag (as in the U.S., the result seems to be thick high-quality plastic bags, perhaps resulting in more energy use).

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Paul Graham: don’t hire anyone with children

From “Having Kids,” by Paul Graham:

Partly, and I won’t deny it, this is because of serious chemical changes that happened almost instantly when our first child was born. It was like someone flipped a switch. I suddenly felt protective not just toward our child, but toward all children.

You will have chunks of time to work. But you can’t let work spill promiscuously through your whole life, like I used to before I had kids. You’re going to have to work at the same time every day, whether inspiration is flowing or not, and there are going to be times when you have to stop, even if it is.

I’ve been able to adapt to working this way. Work, like love, finds a way. If there are only certain times it can happen, it happens at those times. So while I don’t get as much done as before I had kids, I get enough done.

I hate to say this, because being ambitious has always been a part of my identity, but having kids may make one less ambitious. … The fact is, once you have kids, you’re probably going to care more about them than you do about yourself. And attention is a zero-sum game. Only one idea at a time can be the top idea in your mind. Once you have kids, it will often be your kids, and that means it will less often be some project you’re working on.

In other words, if you’re an employer and want to hire someone ambitious and productive whose first priority is the company’s project… recruit from among the childless and, for long-term employer-employee happiness, the infertile.

Related (tough to find articles comparing productivity of childless men versus fathers, but motherhood is intensively studied):

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Two-thirds full airline idea

If you’re traveling today (at prices way higher in the U.S. than in Europe) on a jam-packed pre-holiday commercial flight, perhaps you’ll appreciate this business idea…

The Hainan Boston to Shanghai flight that I took was two-thirds full. The result was that the B787 loaded and unloaded faster than a full B737 or A320. Almost everyone enjoyed an adjacent empty seat.

Is there is a business idea here? Start an airline called “Two Thirds” with Hainan-style reasonable legroom and a guaranteed empty middle seat (exception: a family group of three that actually wants to use the whole row). Charge 50% more per seat (still a great deal compared to business class, which can be 3-7X the price due to the low density of seating). By paying 1.5X the lowest possible fare, the customer is guaranteed not to sit next to a morbidly obese person, overflowing into one’s space. At fares that are 1.5X what is currently charged, I think an airline could make superior profits. Airplanes will turn around faster at airports, so capital asset utilization will be better. Some flights wouldn’t have had more than two thirds occupancy anyway, so the aggregate revenue from a flight would be higher than the average revenue from an airline pursuing the minimum cost, maximum discomfort/crowding strategy.

Readers: Since nobody has tried this, I am going to assume that it is a bad business idea. But why?

Related:

  • the Europeans do this already just by calling coach with an empty middle seat “business class”; they’ve proven that people will pay extra for this service, but it isn’t directly comparable since the back of the plane may be jammed and therefore take a long time to load and unload
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